Business and Industry | Job Centers

This goal of this research project was to conduct a spatial analysis of the business climate in the Inland Empire, using business data and GIS to define job centers and determine areas of industry specialization.

Following an economic definition of the Inland Empire (see “Defining the IE: An Economic Approach” in Where is the IE?), we used Census data to calculate the ratio of employment to resident workers (E/R Ratio = # of workers working in an area / # of workers residing in that area) for Census tracts in the region. Job centers were defined as groups of adjacent tracts with a high E/R ratio (>1.0). These areas have more jobs than residents, with a net commuter inflow. Determining the area and boundaries of job centers is both an art and a science. In general, job centers were made of tracts with E/R ≥ 1.25, and/or tracts with E/R between 1.0 and 1.25 that connect higher E/R tracts. We mapped high E/R tracts and then used our knowledge of the region to inform decisions about where and how to delineate job centers. The result was a map and a ranking of job centers in the Inland Empire based on employment density.

The next step was to determine how industry types vary across local geography, and identify areas where industry specialization (and the potential for competitive advantage) occurs. We used publicly available data from the U.S. Census Bureau’s Zip Code Business Patterns dataset. These data include total number of establishments, employment and payroll for more than 40,000 5-digit zip code areas nationwide. In addition, the number of establishments for nine employment-size categories is provided by detailed industry for each zip code. A measurement of industry specialization, Location Quotient (LQ), was calculated for each industry. An LQ value > 100 indicates industry specialization (see maps).

We next combined the business zip code data to the job center database to produce a typology of Inland Empire submarkets. Since job centers are aggregations of Census tracts, they do not correspond exactly with zip codes. A spatial cross-walk between these two units of geography allowed us to aggregate the business zip code data up to the job center geography. The result is an assignment of business establishments to job centers according to the proportion of the original zip code’s area that intersected the job center. A series of maps were created to show how specialized each job center in our region is for various industry types.

This project provides information about job centers and industry specialization in the Inland Empire. It can help businesses to understand what areas within the region may have a competitive advantage in a given industry, and to visualize the industrial landscape of Southern California.

Contributors: Richard Greene is Professor of Business at Northern Illinois University. Jerry Platt is Professor of Business at the University of Redlands.