Different regions are known for different things. Using job counts from DEED’s Quarterly Census of Employment and Wages program, location quotients can help identify industry subsectors that are more strongly concentrated in a regional economy than the rest of the state. A location quotient is a ratio that compares the percentage of employment in a specific industry subsector in a regional economy to the percentage that same subsector comprises in the reference economy, in this case the state of Minnesota.

Put simply, a location quotient analysis indicates which subsectors have a comparatively larger or smaller presence in the regional economy. A location quotient of 1.0 means that the share of employment in a particular subsector is exactly the same as the share of employment in the same subsector statewide. If a location quotient is greater than 1.0, the local share of employment in a particular subsector exceeds the statewide share of employment in the same subsector.

Not surprisingly, the industry subsector with the highest location quotient in Northeast Minnesota was Metal Ore Mining, which was nearly 20 times more concentrated locally than statewide. This included 4,002 jobs at 13 firms in the region. Support Activities for Mining was the third highest location quotient in the region, at 14.7.

The region also has a large share of the state’s forest land, and as such, the Arrowhead also has a notable specialization in Pulp, Paper, and Paperboard Mills, and Logging. DEED’s Regional Analysis team created an interactive web tool to examine location quotients by industry subsector in the second quarter of 2018.

For More Information

Contact Cameron Macht at 320-441-6596 or cameron.macht@state.mn.us.