AQUA BOOK 2014 II - Page 6

The chart shows that self-employment in Coastal Bend Self-Employment Dynamics the oil and gas extraction industry today has a concentration ratio more than ten times (12.2) that of the national average. ENTREPRENEURSHIP IN THE COASTAL BEND The location quotients capture the current llllllllllll llllllllllll 4 role of self-employment across industries. Location Quotient and Shift Share Analysis Some patterns of self-employment in the Coastal Bend appear quite unique. According to the location quotients using the U.S. as the benchmark, the following regional industries stand out in terms of the relative role of self-employment: Oil and gas extraction, construction, administration, and accommodation and food services. Oil and gas extraction has an exceptionally high location quotient of 12.2, meaning that the share of self-employment is 12 times the share of selfemployment in that industry nationwide. Similarly, the location quotient is 1.4 for construction, meaning that self-employment in the construction industry is 40 percent higher in the Coastal Bend than the rest of the nation. An accompanying chart illustrates the dynamics of self-employment conditions in the Coastal Bend by plotting location quotient and shift-share data for different industries. Those two measures are standard indicators of a region’s comparative advantages. The size of a bubble reflects the relative size of self-employment. Clearly, as shown in the previous pie chart, construction, business administration and other services witness relatively high self-employment. The vertical axis of the bubble chart is the location quotient, which equals the share of self-employment in the workforce of a specific industry over the corresponding self-employment share in that industry nationwide. The higher is the reading for a given industry, the greater is the extent of self-employment in that industry. The chart shows that self-employment in the oil and gas extraction industry today has a concentration ratio more than ten times (12.2) that of the national average. The location quotients capture the current role of self-employment across industries. The horizontal axis is the shift-share ratios, which equals the ratio of the percent change of self-employment in a local industry between 2001 and 2014 over the corresponding percent change of self-employment in that industry nationally. In contrast to the location quotient, which is static in nature, the shift-share ratio reflects a change in the relative role of self-employment over time. The higher is the ratio, the faster is the growth of self-employment in the Coastal Bend relative to the U.S. The chart indicates that self-employment in administrative and support services (6.23), and other services (5.85) have grown at a relatively faster pace than that in the rest of the U.S. Review of South Texas Business Conditions Source: EMSI Analyst Online Self-Employment Population Another characteristic of the regional self-employment population is the dominance of male workers. The majority of the selfemployed are men, who make up 68 percent of this population. For the entire regional labor force, 53 percent of the workers are male. The distribution of self-employment by gender, however, varies widely by industry. While 95 percent of the self-employed in construction are male, women make up more than 70 percent of industries in private educational services, and health care and social services. Which occupations are popular for self-employment? Nationally, self-employment is highly concentrated in the fields of professional services, such as accounting, legal and consulting services and scientific services, where high-level education or certification is required. This also shows up in the high concentration of self-employment in the “other service” sector. In the Coastal Bend, more than one-third of its lawyers are self-employed. Likewise, in the arts and entertainment industry, about one in three arts workers, designers and entertainers are self-employed. Construction is another industry where self-employment is popular within the region. One in five construction trades workers are self-employed, and so is one in three carpenters. The concentration of self-employment in those craft occupations is less for the rest of the U.S. According to the location quotients in comparison with national averages, the occupations with exceptionally high shares of self-employment can be found in construction trades, oil and gas extraction, and food preparing and catering. Those occupations contribute much to the high concentration of self-employment in the construction, oil and gas, and hospitality industries.