An in-depth analysis of regional strengths, weaknesses, opportunities and threats
A SWOT analysis of the regional economy should answer the question, “Where are we now?” by using the relevant data (see above) and background information to help identify the critical internal and external factors that speak to the region’s unique assets and competitive positioning. The SWOT is a strategic planning tool used by organizations to ensure that there is a clear objective informed by a comprehensive understanding of a region’s capabilities and capacity. A SWOT analysis identifies the region’s competitive advantages—those indigenous assets that make the region special or competitive in the national and global economies—juxtaposed against those internal or external factors that can keep a region from realizing its potential. Determining and analyzing what the region already possesses that could be leveraged better to build the capacity for growth, including competitive cultural, economic, technological, intellectual and physical assets, is critical to developing the strategic direction and implementation plan to promote regional economic vitality. Leveraging assets refers to using the activities and engagement of business, government leaders and other stakeholders to maximize the economic potential of a region.
It should be noted that, while a SWOT analysis is critical, there are various “SWOT-like” frameworks (other than a SWOT) that may be employed successfully. In fact, some of these other frameworks (e.g., “SOAR” [Strengths, Opportunities, Assets, and Risks] and “NOISE” [Needs, Opportunities, Improvements, Strengths and Exceptions]) may work better for your regions and for the stakeholders you are trying to engage. Consider employing whichever SWOT-like analysis allows for the broadest and most diverse group of stakeholders and community members to contribute their inputs (see the Equity section for more information on conducting an inclusive and equitable SWOT (or SWOT-like) analysis).
In addition, the SWOT analysis (or equivalent, as noted above) should consider economic resiliency. Specifically, what factors and/or elements are in place (or need to be put in place) to ensure the long-term success, viability, and durability of the regional economy?
See NADO’s 2011 report Mobilize Maine: Asset-Based Regional Economic Development (PDF) at http://www.knowyourregion.org/wp-content/uploads/2011/09/NADO_MM_FINALlores.pdf (PDF) for an example of an asset-based strategy.
SWOT analysis elements are commonly understood in the following terms:
- Strengths are a region’s relative competitive advantages (e.g., industry supply chains and clusters, extensive port, rail, and broadband assets, specialized workforce skills, higher education levels, collaboration among stakeholders) and often are internal in nature;
- Weaknesses are a region’s relative competitive disadvantages (e.g., a risk-averse or change-resistant regional culture), also often internal in nature;
- Opportunities are chances or occasions for regional improvement or progress (e.g., expansion of a biosciences research lab in the region), often external in nature; and
- Threats are chances or occasions for negative impacts on the region or regional decline (e.g., several companies in the region considering moving to lower-cost areas of the state), also often are external in nature.
The SWOT should assess a wide-variety of regional attributes and dynamics. Specific areas and potential tools to facilitate their analysis are identified below:
- State of the regional economy. What are the strengths and weaknesses? What are the strong existing and growth sectors? Which areas are most distressed? What is driving job creation or loss and the state of economy in general? What are the region’s assets? See the Regional Innovation Accelerator Network (RIAN) at http://www.regionalinnovation.org/assets.cfm for more information on identifying and measuring asset categories (i.e., tangible, intangible, and business climate assets).
- Regional clusters. Which clusters, and industries and occupations within the cluster, are growing and declining, and why? EDA defines clusters as a geographic concentration of firms, workers and industries that do business with each other and have common needs for talent, technology, and infrastructure. See the U.S. Cluster Mapping Tool (http://www.clustermapping.us/) for more information on clusters and the promotion of clusters.
- External trends and forces. What are the opportunities and threats? How is the region positioned to succeed in the national and global economies? What sources of exports and tourism, as well as foreign direct investment, can bring new wealth to the region? What industry sectors and clusters have growth potential through international trade and investment, and what are the region’s target foreign markets based on these industries? What local public, private and nonprofit partnerships have been developed to promote exports and increase the region’s export base? What are the strategic needs or gaps to fully implement an export promotion and investment attraction program (e.g., foreign outreach events, marketing materials, and research; and regional transportation infrastructure or regulatory issues)?
Helpful resources for information on global competitiveness and positioning include the U.S. Department of Commerce’s International Trade Administration’s (ITA) program for investment attraction, SelectUSA (http://www.SelectUSA.gov), and local export promotion contacts, U.S. Export Assistance Centers/U.S. Commercial Service (http://export.gov/eac/index.asp). The following web resources also provide useful tools for analyzing a region’s export trends: a) the U.S. Census Bureau’s USA Trade Online (https://usatrade.census.gov/) provides monthly and annual trade statistics for goods at the district and port level, as well as state exports and imports; b) ITA develops state-level (http://www.trade.gov/mas/ian/statereports/index.asp) and metropolitan statistical area-level factsheets (http://www.trade.gov/mas/ian/Metroreport/index.asp) and TradeStats Express state (http://tse.export.gov/TSE/TSEhome.aspx) and metro (http://tse.export.gov/metro/SelectReports.aspx?DATA=Metro) databases with information on exported products, the number of exporting companies by state, and jobs supported by exports by state.
- Broadband. Do communities, institutions, and businesses agree on the broadband and telecommunications needs of the region? Has the region discussed ways to leverage high-speed broadband infrastructure to support economic growth and development, business retention, and expansion, as well as its applicability to advancing equity, health, education, public safety, energy, and civic life? With the passage of recent legislation, including the Bipartisan Infrastructure Law (BIL), how do local and community needs intersect with state-level plans to promote greater broadband infrastructure access, expansion, affordable services, and digital equity in vulnerable communities? The National Telecommunications and Information Administration (NTIA) provides high-speed internet-related resources, including federal grant programs, such as; the State Broadband Leaders Network and Digital Equity Leaders Network (multi-stakeholder groups comprised of state and local-level government practitioners who work on addressing community broadband needs); broadband data and mapping; and additional tools and resources to support planning activities. For funding opportunities made available through the BIL, please visit the website for the Internet For All initiative at https://www.InternetForAll.gov/. For technical assistance, information about additional programs and funding opportunities, and planning support, visit the BroadbandUSA website at https://broadbandusa.ntia.gov. Check with your state economic development office, broadband office, and state broadband leader(s) to learn about planning efforts underway, how to coordinate with their work, and whether your state has recently collected data on broadband infrastructure, availability, and use.
- Institutions of Higher Education/HBCUs. What institutions of higher education exist in the region? What resources are available within those institutions that can support regional resilience and economic development? Does the region have any EDA-funded University Centers and, if so, what services are provided by those institutions that can be leveraged? Are there Minority Serving Institutions (MSIs), such as Historically Black Colleges and Universities (HBCUs), that can assist in the planning process with resources related to economic development decision-making, workforce development and training, entrepreneurial and innovation efforts, and research and business assistance? How can these institutions help in the planning process, including assisting with data and analytics? Are there existing relationships between these institutions and other economic development partners in the region that can be strengthened to further support regional economic development objectives?
EDA-funded University Centers are focused on using university assets to build regional economic ecosystems that support innovation and high-growth entrepreneurship, resiliency, and inclusiveness. Specifically, they provide expertise and technical assistance to develop, implement, and support regional strategies. Expertise and technical assistance can be focused on workforce training programs, applied research centers, technology commercialization, feasibility studies, market research and data analysis, and economic impact analyses training among many other types of activities. The following web resources provide some examples of ways in which University Centers have supported regional economic development goals: (a) EDA’s University Center Program webpage (https://www.eda.gov/programs/university-centers/), (b) NCGrowth, a University Center at UNC-Chapel Hill, helps businesses and communities create jobs and equitable opportunities through applied research and technical assistance (https://ncgrowth.unc.edu/index.php/what-we-do/), and (c) Purdue Center for Regional Development, a University Center at Purdue University, develops and improves online data tools, produces regional economic profiles and other informational resources, engages key stakeholders in mapping regional assets and opportunities, and strengthens regional collaboration and innovation networks (https://www.pcrd.purdue.edu/signature-programs/eda-university-center.php).
HBCUs invest strategically in institutions and individuals at the local level to actively pursue innovation and entrepreneurship that can help more Americans improve their connectivity to and productivity within the 21st century. HBCUs have made significant contributions to the general welfare and prosperity of the United States while producing many leaders in business, government, academia, and the military. The most visible example of EDA’s ongoing partnership with the HBCU community consists of those that have been designated as EDA University Centers (https://www.eda.gov/programs/university-centers/hbcu/).
HBCUs working with local ecosystems and communities can build processes by which innovators, students, current and prospective employees and employers, and entrepreneurs can better develop and launch solutions to solve real-world problems and maximize real-world opportunities. Today, there are 101 accredited HBCUs, public and private, concentrated in 19 states, the District of Columbia and the U.S. Virgin Islands. The economic returns produced by HBCUs are particularly evident at the state level, generating billions in total economic impact and thousands of jobs for their local and regional economies (https://uncf.org/programs/hbcu-impact). Across the states and territories where HBCUs are located, they annually provide an average of 6,385 jobs in each state and generate an average of $704.7 million in total economic impact (https://uncf.org/pages/hbcus-punching-above-their-weight).
Of the many contributions that HBCUs make to the communities and regions in which they operate, one of the most compelling is workforce development. HBCUs often leverage specialized degree programs and students to support local business needs – including the increasing number of companies looking to diversify their workforces. Local economies are positioned to succeed in the global economy by possessing a highly trained, technically skilled workforce, and HBCUs generate talent that regularly feeds these local ecosystems. In particular, HBCUs have implemented proven practices to assist students in STEM (i.e., science, technology, engineering and mathematics) fields to obtain significant professional experiences, research opportunities, and mentorships. It is estimated that the United States will need nearly 1 million STEM professionals in the next few years, and HBCUs are leading the charge by producing 27% of African American students with bachelor's degrees in STEM fields. In addition, 21 of the top 50 institutions for educating African American graduates who go on to receive their doctorates in science, math, and engineering, are HBCUs (https://www.edi.nih.gov/blog/communities/top-10-stem-historically-black-colleges-and-universities).
Current examples of workforce-focused partnerships between regional planning organizations and HBCUs include a collaboration between Triangle J Council of Governments (TJCOG) and North Carolina Central University to research law enforcement recruitment, training gaps, and potential candidates in the region and provide departments with data-driven recommendations to improve their local recruitment efforts. For more information, see https://www.tjcog.org/partnerships/regional-recruitment-partnership. In addition, the Gulf Coast Economic Development District (GCEDD) partnered with Prairie View A&M University to establish the Rural Workforce Academy that provides skilled trades training certification and job placement to rural counties impacted by disasters. For more information, check out https://www.pvamu.edu/cahs/rural-workforce-academy/.
In addition to workforce-related collaborations between EDDs and institutions of higher education/HBCUs, there are other ways certain EDDs have acknowledged and leveraged these institutions as key regional assets and contributors to a regional planning process that is innovative, competitive and inclusive of all interests who stand to benefit from strong local economies . EDDs that include university/HBCU administrators on their CEDS Strategy Committees and/or EDD boards are benefiting from the local insights and community knowledge that these institutions bring to the planning process for economic development capacity building (see the Piedmont Triad Regional Council at https://www.ptrc.org/services/economic-development and the Capital Region Planning Commission at https://crpcla.org/economic-development).
- Environmental Sustainability/Climate. How can economic development be pursued, with an eye towards environmental sustainability and climate resilience? What unique environmental/climate risks face the regional community? How could future climate shifts alter or amplify these risks? What regional assets are at particular risk to future climate-related uncertainty? Are the existing infrastructure and workforce adaptable in the face of climate-related industrial shifts? How can land use, housing, economic development, transportation, and infrastructure planning be better integrated to support regional prosperity, while remaining conscious of regional/local climate challenges and environmental sustainability goals? Are there specific sustainability or climate plans or efforts that can be aligned or integrated with the CEDS? Are there opportunities to redevelop brownfields and vacant industrial space in an environmentally conscious way? What specific projects or efforts related to renewable energy, energy efficiency and reuse/recycling/restoration/preservation can be pursued as economic development drivers? What specific efforts, practices or policies have been established to lessen the negative environmental impacts of development, especially with regards to traditionally disadvantaged, disproportionately affected populations (environmental justice). (See the US Climate Resilience Toolkit and Climate Explorer Tool (https://toolkit.climate.gov and https://crt-climate-explorer.nemac.org) for more information on general climate resilience and existing climate risks. Also see Argonne National Lab’s National Economic Resilience Data Explorer (https://www.anl.gov/dis/nerde-county-dashboard for information on county or EDD-level natural hazard risk and information on historical disaster declarations. For more specific resources, please see the Resilience subsection on Climate Resilience.
- Energy needs. Are the energy needs of the region – and the importance of reliable energy security – understood? Have the methods of production, transmission, and distribution been analyzed in relation to regional economic development efforts (e.g., utility siting)? In particular, have opportunities for distributed and advanced energy been considered and addressed? Have utility companies been consulted and included in discussions about economic resilience and overall regional development? Have future energy needs been considered and planned for in light of changes in demand and climate? For information on Smart Grid see http://energy.gov/oe/articles/economic-impact-recovery-act-investments-….
- Partners for economic development. Who are the influential actors in the region? These may include organizations, businesses, or individuals that represent important issues, including those that may be less familiar to the economic development organization such as social service delivery and natural resource organizations.
- Resources for economic development. What relevant groups, organizations or individuals are located in the region? Who – including other federal agencies beyond EDA – can provide support and funding to build capacity for economic development activities? How can the CEDS leverage federal, state, and private sector funding resources in pursuit of its economic development objectives?
Also, for an example of a relevant SWOT section of a strategy, see http://arcreativealliance.com/resources/Southeast+Arkansas+Growth+Initiative+-+Regional+Plan+for+Economic+Development+-+Draft.pdf. (PDF)