AQUA BOOK 2014 II - Page 8

H DIVERSITY AND SPECIALIZATION ow diversified is our economy? Diversification is a popular economic development objective. Other things being equal, a more diverse economy tends to be more stable over time because it is less dependent on the performance of individual industries or businesses. Decline in one particular local industry can be offset by growth in others. However, diversity typically does not translate into rapid economic growth. llllllllllll llllllllllll The opposite of economic diversity is specialization. According to standard economic theory, specialization raises labor productivity and thus a higher standard of living among households. In the short run, an economy can grow more rapidly if it relies more heavily on a particular industry that is also thriving. However, such dependence is also a source of vulnerability to an overall economic downturn when that industry suffers a downfall. In the Coastal Bend, the closure of Naval Station Ingleside in 2011, which previously made up more than onetenth of San Patricio County’s workforce, has generated a tremendous adverse impact on its local economy. Coastal Bend Employment by Industry, 2014 Two Economic Pies The accompanying pie charts provide two alternative representations regarding the concentration of our regional industries. The first chart shows the distribution of employment across industries, and the second chart shows the distribution of business sales instead of employment across industries. In terms of the number of jobs, health care and social services, accommodation and food services, and retail trade are major employers, each accounting for more than 10 percent of the regional workforce. Source: EMSI Analyst Online Coastal Bend Business Sales by Industry ($ mil), 2013 In terms of the sales volume, however, the distribution of economic activity across industries differs drastically from the patterns by employment. Manufacturing, which generates only 5 percent of total employment regionally, contributes nearly 60 percent of all sales in the Coastal Bend. The health care and social assistance sector, on the contrary, comprises 15 percent of the regional workforce, but generates less than 1 percent of the region’s total sales volume. Different industries in the Coastal Bend have experienced vastly different growth patterns over time in their numbers of self-employed. Source: Texas Comptroller of Public Accounts 6 Review of South Texas Business Conditions