The Peer Regions

Nine peer regions were chosen based on geographic location, distribution, and similarities. It was capped at nine to keep the entire analysis effort limited to a total of ten regions, including Greater Philadelphia.

Since Greater Philadelphia only shares a state with one other major US city, Pittsburgh, that region was included in order to capture this unique intra-state dynamic. Given Greater Philadelphia’s central location along the Northeast Corridor, four peer cities were selected from that region as well: Baltimore, Boston, New York City, and Washington D.C. The remaining four regions were chosen based on their distribution across the US: the Midwest (Chicago), Southeast (Atlanta), West (Dallas), and West Coast (Los Angeles).

High-Performance Industries

The North American Industry Classification System (NAICS) identifies 20 distinct industry sectors that comprise the national and regional economies, and assigns them a unique NAICS code. Of those, 19 are included in this analysis:

• 11: Agriculture, Forestry, Fishing and Hunting
• 12: Mining, Quarrying, and Oil and Gas Extraction
• 22: Utilities
• 23: Construction
• 31-33: Manufacturing
• 42: Wholesale Trade
• 44-45: Retail Trade
• 48-49: Transportation and Warehousing
• 51: Information
• 52: Finance and Insurance
• 53: Real Estate and Rental and Leasing
• 54: Professional, Scientific, and Technical Services
• 55: Management of Companies and Enterprises
• 56: Administrative and Support and Waste Management and Remediation Services
• 61: Educational Services
• 62: Health Care and Social Assistance
• 71: Arts, Entertainment, and Recreation
• 72: Accommodation and Food Services
• 81: Other Services (except Public Administration)

Please note that NAICS code 92: Public Administration was not included as this analysis focuses entirely on the private sector.

For the purposes of this analysis, HPIs are those industries for which the location quotient (LQ), in terms of total employment, is 1.25 or higher. The formula used to calculate the LQ for each industry is:

LQ = ((Total Regional Employment in Industry X / Total Regional Employment) / (Total National Employment in Industry X / Total National Employment))

An LQ of 1.0 indicates that a specific industry is equally represented in the region as it is nationally, and an LQ less than 1.0 indicates that the industry is less represented regionally than nationally. Conversely, an LQ greater than 1.0 indicates that an industry has a greater share of total employment at the regional level than the national level.

Automation Risk Methodology

The Oxford Martin School’s publication, The Future of Employment, sought to quantify the degree to which specific occupations are susceptible to computerization. The analysis was done utilizing data from the U.S. Department of Labor’s online platform, O*NET Resource Center which assigns an automation score to every occupation. However, not all occupations had a raw automation score, but every occupation was placed into one of three automation categories: high, medium, low. For occupations that did not have a raw score, an automation score was imputed by using the average automation score for the Standard Occupational Classification category that the occupation belonged to.

Sector-level risk was then calculated by determining the occupational employment composition of each sector, and then multiplying each occupation’s automation risk by its percentage of total employment within each subsector. The values were then summed to calculate its automation risk by sector.

Telework Capacity Methodology

Released in November 2022, the U.S. Bureau of Labor Statistics’ (BLS) Occupational Requirements Survey (ORS) provides estimates on a range of requirements at the occupational level. Each requirement falls within one of seven categories: physical demands, environmental conditions, education, training, and experience, as well as cognitive and mental requirements. Due to gaps in the ORS, the BLS’ Business Response Survey (BRS) was used to determine telework capacity at the sector-level. However, since the BRS defines telework capacity as establishments with employees teleworking either all the time, some of the time, and or rarely or never, the following formula was developed to quantify telework capacity:

Telework Score = ((Percent of establishments with employees teleworking all the time * 10) + (Percent of establishments with employees teleworking some of the time * 5) + (Percent of establishments with employees teleworking rarely or never * 1))/1000

For More Information:

Spencer Gober | Manager, Office of Community and Economic Development sgober@dvrpc.org