Supporting “Traded Industries”
This topic addresses three important questions: What drives economic development, generally? Which industries are important in my region, specifically? And, how do those industries relate to or rely on my airport?
What drives economic development? Broadly speaking, economic activity within a region can be separated into two major categories: population-serving industries and traded or export industries. Airports are of particular importance for a subset of the trade industries, a subset commonly referred to as aviation- or airport-reliant industries.
Population-serving industries grow along with population and serve local markets. While indispensable for serving a community and contributing to local quality of life, these industries for the most part do not compete with other regions and are not responsible for bringing dollars into a region by selling goods and services to customers outside its borders.
Traded industries drive a region’s economic growth by selling goods and services to other regions. These sales generate a flow of dollars back into the airport region, which support additional business growth and local jobs.
Traditionally, traded industries have included manufacturing, agriculture and extraction sectors, and tourism. But, with the growth of knowledge-based industries over recent decades, traded industries in a region may include nationally or internationally regarded medical, business and educational services, financial institutions and insurance companies, specialized technology services, and other service sectors.
Traded industries participate in national or even global trade markets that extend beyond the boundaries of a single region. Therefore, traded industries are particularly reliant on all modes of transportation, for access to inputs, collaborators, and customers.
Airport-reliant industries are a particular subset of traded industries that, broadly defined, have a higher than average reliance on air service for core economic functions. This reliance can occur in the form of aviation used for goods movement, business travel, delivery of services, and to bring in visiting tourists. For airport-reliant industries, airports play a critical role in business attraction and retention because they have mobility needs that can be best met by air service.
What are the major industries in my region? The U.S. Census Bureau County Business Patterns and Zip Code Business Patterns data set provides data on employment and payroll by industry that can serve as a good starting point for characterizing your region’s major industries. Data are available by State, County, Zip Code, and Metropolitan and Micropolitan Statistical Area. Summary level data are provided at the 2-digit NAICS level. However, to truly understand your region’s economic specialization, it is important to also “drill down” and look at detail data.
How do industries in my region rely on my airport? Identification of major industries in your region by either employment or payroll will not tell you directly whether or not industries are traded industries that export their goods or services outside your region, nor will it describe the extent and form of airport reliance by those industries. The self-assessment guide under tools, below, is designed to help you think through which of your region’s major industries may be particularly reliant on air transportation for the movement of goods or people.
In addition, speaking to people from the economic development and business community can also be of value. Many state and local entities may have publications or websites that explicitly address the topics of key industries or major tourist attractions. Combined with knowledge from the self-assessment guide, these resources can help you identify your region’s major industries and develop a preliminary assessment of their likely reliance on airport services.