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InRoads Research: Peninsula Technology's Emerging and Star Industries

The Hampton Roads Peninsula is leaving its mark on high-tech employment. Hampton Roads’ Peninsula cities, Hampton, Newport News, and Poquoson account for nearly 6,000 jobs, almost a quarter of the Tech Industry cluster jobs for the region. With nationally competitive wages and close to a 20% surplus of regional tech program graduates, the Peninsula’s tech workforce has become an alluring point of attraction for future employers. In this brief industry cluster analysis, we highlight tech industry clusters that are classified as Star or Emerging and provide context for industries that are Mature or Transforming. As the tech industry and whole region shake off lingering effects of recession and sequestration, the Peninsula will continue to move towards a brighter and more prosperous future in Hampton Roads.

Industries are classified as either Star, Emerging, Mature or Transforming by analyzing their Location Quotient (LQ) in conjunction with their Competitive Effect. In order to level out industry fluctuations and identify industries with a reasonable degree of specialization, industries are considered in the upper quadrants when their LQ, or industry concentrations as compared to the nation, are greater than 1.25, rather than 1. Regional specific growth or contraction is captured in the Competitive Effect at the point of origin, indicating whether the source of change in employment is within the region or can be attributed to national trends. Accordingly, Star industries are at least 25% more concentrated in the region and are growing. Emerging industries are also growing, but can generally be less concentrated regionally compared to the national average. Mature and Transforming industries are those that have witnessed contracting employment and hold either an employment concentration higher or lower, respectively, than 25% of the national average. 


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The top three industries in terms of employment hold almost 4,800 Peninsula tech jobs: Research & Development in the Physical, Engineering, & Life Sciences, Engineering Services, and Computer Systems Design Services. Although employment may have tapered slightly in these, as is common with many mature industries, the overall base has remained strong amid recessional winds and tides of sequestration. This same strength is seen across the top seven tech industries who have employment concentrations greater than the nation, helping the Peninsula to stand out from competition. The top three of these have concentrations which have more than doubled national levels; Irradiation Apparatus Manufacturing, Research & Development in the Physical, Engineering, & Life Sciences, and Search, Detection, et al., have LQs of 6.01, 3.63, and 2.38 respectively.

The Peninsula holds six specific industries within the technology cluster that have proven themselves to be Emerging or Star industries. Together these industries have grown by 156% in employment over the past five years and have employment that is 25% more concentrated than the nation. Two of these industries stand out as Star industries, Irradiation Apparatus Manufacturing, as well as, Search, Detection, et al., with Location Quotients of 6.01 and 2.38, and competitive effects of 62 and 207, respectively. These two industries are strong and are projected to increase employment concentrations, correspondingly, to 8.8 and 4.07 over the next five years. 

The four industries classified as Emerging are All Other Telecommunications, Computer Facilities Management Services, Computer & Computer Peripheral Equipment & Software Merchant Wholesalers, and Research & Development in Biotechnology. These industries are all expanding within the region and are worth keeping an eye on for future expansions. They may not currently outpace the nation in employment concentration, but each has shown promising gains over the past five years and are poised for future prominence. If growth trends continue, they will become more dominant industries and move into the “Star” quadrant.

With positive initiatives, the Peninsula is building a strong technology cluster. This is seen most recently in the development of Virginia Tech’s research park, which is a part of a 100-acre, $450 million Tech Center mixed-use development that is being constructed nearby Jefferson Lab. Also, NASA’s public-private partnerships continue to be a staple of the Peninsula. With great initiatives, competitive wages, and a strong workforce, the Peninsula is ready to meet the demand of an increasingly technological world.

 
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