What analysis is used to compare the concentration of a specific industry in a locality to the national average?

Location quotient analysis is a method used to determine the concentration of a specific industry within a geographical area compared to a larger reference area, usually at the national or state level. This analysis allows for the identification of industries that are more or less prevalent in a locality than the national average.

By calculating the location quotient, analysts can assess how concentrated a particular industry is in that area. A location quotient greater than 1 indicates that the industry is more concentrated than the national average, suggesting a specialization or competitive advantage within the local economy. Conversely, a location quotient less than 1 indicates that the industry is less concentrated.

This analytical approach is particularly useful for economic development and planning, as it helps local governments and organizations understand their economic landscape and identify sectors for potential investment or support.