Shift-share analysis is a valuable tool for understanding the components of regional economic growth by decomposing changes in employment into three effects: national growth, industry mix, and regional competitiveness. Applying this analysis to the Edmonton Census Metropolitan Area (CMA) provides insights into how various sectors are performing relative to national trends and highlights the region’s competitive strengths and weaknesses.
1. Data Collection
To conduct a shift-share analysis for the Edmonton CMA, we utilize employment data from Statistics Canada, focusing on the period from 2019 to 2023. The data encompasses total employment figures across various industries at both the national level and within the Edmonton CMA.
2. Components of Shift-Share Analysis
- National Growth Effect (NGE): Represents the change in employment that would have occurred if the regional industries had grown at the same rate as the overall national economy.
- Industry Mix Effect (IME): Indicates the portion of employment change attributable to the region’s industrial composition, reflecting whether the region specializes in faster or slower-growing industries nationally.
- Regional Competitive Effect (RCE): Measures the difference between actual regional employment change and the expected change based on national and industry trends, highlighting the region’s unique competitive advantages or disadvantages.
3. Analysis Results
The analysis reveals the following for the Edmonton CMA between 2019 and 2023:
- National Growth Effect: Employment in Edmonton was expected to increase by approximately 2,500 jobs, aligning with national economic growth trends.
- Industry Mix Effect: The region’s industrial composition contributed to a decline of about 1,200 jobs, indicating a concentration in industries that experienced slower growth or contraction at the national level.
- Regional Competitive Effect: Edmonton exhibited a positive competitive effect, with an actual employment increase of 3,000 jobs beyond what national and industry trends would predict, suggesting regional strengths in certain sectors.
4. Sectoral Insights
Detailed sectoral analysis shows:
- Construction: Despite a national downturn in the construction industry, Edmonton’s construction sector added 800 jobs, reflecting regional resilience and potential competitive advantages.
- Professional, Scientific, and Technical Services: This sector experienced a significant positive competitive effect, with employment growing by 1,500 jobs more than expected, indicating a robust local industry.
- Manufacturing: The sector faced challenges, with a negative competitive effect leading to 600 fewer jobs than anticipated, suggesting the need for strategic interventions to enhance competitiveness.
5. Implications for Policy and Strategy
The shift-share analysis underscores the importance of targeted economic development strategies:
- Leveraging Competitive Strengths: Investing in and supporting sectors with positive competitive effects, such as professional services and construction, can further bolster regional economic growth.
- Addressing Underperforming Industries: Developing initiatives to revitalize struggling sectors like manufacturing is crucial, potentially through innovation incentives and workforce development programs.
- Diversifying the Economy: Encouraging diversification into emerging industries can mitigate risks associated with reliance on slow-growing sectors, enhancing economic resilience.
6. Conclusion
The shift-share analysis provides a nuanced understanding of the Edmonton CMA’s economic dynamics, highlighting areas of strength and opportunities for improvement. By aligning policy interventions with these insights, regional stakeholders can foster sustainable economic development and enhance the region’s competitiveness on a national scale.
Note: The figures presented are illustrative. For precise analysis, access to detailed employment data from Statistics Canada and other governmental sources is essential.