A Local Economic Development Action Plan for

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A Local Economic Development Action Plan for Pennington County South Dakota November 19, 2018.

A Local Economic Development Action Plan for Pennington County, South Dakota

Prepared For: Rapid City Economic Development Partnership Pennington, South Dakota, USA Prepared By:

Ejiro Osiobe Department of Economics, Applied Statistics, and International Business New Mexico State University MSC 3CQ P. O. BOX 30001 Las Cruces, NM 88003-8001, USA

November 19, 2018.

Pennington County, SD Comprehensive LEDAP

Table of Contents: Executive Summary:................................................................................................................................................................ ii Introduction: ............................................................................................................................................................................ 1 Overview: ........................................................................................................................................................................... 1 Pennington County History: .................................................................................................................................................... 2 Pennington County’s Economy: ......................................................................................................................................... 2 Median Household Income and Poverty Rate:................................................................................................................... 3 Labor Force:....................................................................................................................................................................... 4 Rapid City: ......................................................................................................................................................................... 4 Pennington County Population Size: ................................................................................................................................. 5 Demographics: ....................................................................................................................................................................... 6 Population Projection: ........................................................................................................................................................ 6 Educational Attainment: ................................................................................................................................................... 10 Empirical Analysis: ............................................................................................................................................................... 11 Location Quotient: ............................................................................................................................................................ 11 Porter Analysis: ................................................................................................................................................................ 13 Shift-Share Analysis:........................................................................................................................................................ 13 The National Growth Effect or The National Share: .................................................................................................... 16 The Industrial Mix Effect or Industry Mix: .................................................................................................................... 16 Regional Competitiveness or Local Share: ................................................................................................................. 17 The Role Pennington County Plays with the Broader Regional Economy: .......................................................................... 20 Rapid City Regional Airport.............................................................................................................................................. 22 University: ........................................................................................................................................................................ 22 Tourism ............................................................................................................................................................................ 22 SWOT Analysis of Pennington County, South Dakota: ........................................................................................................ 25 Action Plan: .......................................................................................................................................................................... 26 Policy Implication: ................................................................................................................................................................. 28 Conclusion: ........................................................................................................................................................................... 29 References ........................................................................................................................................................................... 30

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP Executive Summary: A Local Economic Development Action Plan (LEDAP) is an approach to economically develop a region by creating a structured, systematic path by the identification, development, and utilization of a community’s economic opportunity, to benefit local businesses and citizen while trying to mitigate the threats. As a region becomes more open to its neighbors in terms of trade, that community starts to grow, the private sectors become more inclusive, the poverty rate in the region starts to reduce substantially, and the aggregate net disposable income in that region starts to increase for both the public and the private labor force earners. Pennington County is endowed with natural capital; to maximize this natural capital, an inclusive LEDAP will be needed to promote sustainable economic growth and development pathways. A community doesn’t just depend on the factors inside the community, but also on external forces such as market demand, market competition, supply conditions, and the local business environmental conditions of its neighboring communities. A community’s business ecosystem plays a significant role in the survival and thriving of local entrepreneurs. Hence, a healthy business environment is essential for the reduction of poverty, growth, and development of any community. Like many communities in the United States, Pennington County is in the midst of an economic transition. This transition aims to move the county from a resource, retail trade, tourism, and military-dependent past to a more diverse economic base industry county. The LEDAP is intended to address Pennington County’s current economic development prospects and prospects over the longer, 20-year planning horizon. The study also serves as a resource for the Rapid City Economic Development Partnership Department, as it proceeds with planning in compliance with the state’s goal(s) and objectives, particularly in determining its industrial and commercial land needs. To maximize the prospects of Pennington County, a sustained economic growth and development plan must be aligned with stakeholders’ needs and within areas that the community has the greatest comparative advantage over neighboring communities. A more systematic, pragmatic, and data-driven approach promises reliable results in the execution of the LEDAP, and without a commitment from our stakeholder, the LEDAP will fail. The LEDAP process aims to identify opportunities that will: • • • • •

Increase the size of the economy. Create a business-friendly environment. Improve the response and action planning process of the public sector. Increase economic opportunity by expanding both public and private job training and skills development. Implement smart growth coordination and the redevelopment business.

This study seeks to minimize the impact of economic cycles and maximize its abilities to seize new economic opportunities. The LEDAP lays out a set of economic indicators that will help Pennington County identify key industries to track. The LEDAP also lays out specific tactical objectives and actions for several industries. These strategies focus on three primary areas: • • • •

The diversification of the local economy, which will create a regional advantage. create a longer value-chain that promotes and utilized the backward and forward linkages. An aggressive capital deepening into the local economy. Increase the built capital in the region, which will promote the establishment of more industry clusters in the local economy.

The utilization of a varity economic development tools, such as tax abatement and state-funded incentive programs, will be used to implement these strategies. Financial market opportunities and other taxing options available to the county will be explored to see this LEDAP come to fruition.

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP

Table

Heading

Page

1 2 3 4

3 4 4 7

6 7 8 9 10 11 12 13 14

Pennington County, South Dakota employment Count and Share by Industries (2016) Pennington County Poverty Rate by Age and Gender (2016) Pennington County Labor Force Distribution by Race Count and Share (2016) Population Projection for the United States, South Dakota, and Pennington County (2016 – 2015) Rapid City (MSA), Pennington County, South Dakota, and the United States Employment Count and Share by Sectors (2016) Interpretation Guide for the location Quotient Location Quotient for Pennington County (US Base) (2001 – 2016) Porter Cluster Analysis for Pennington County (US Base) (2001 – 2016) Pennington County Shift-Share Analysis (2001 – 2016) Pennington County Basic Employment and Employment Multiplier (2016) The Pros and Cons of I – 90 on Pennington County South Dakota Tourism Statistic for the year 2017 The Economic Advantages, Disadvantages, and Proposed Solutions to the Tourism Industry A Comprehensive SWOT Analysis of Pennington County

Figure

Heading

5

1 2 3 4 5 6 7 8 9 10 11 12

Pennington County Location, South Dakota on the Contiguous United States Map Pennington County Land to Water Ration Pennington County Location on South Dakota Map Rapid City (MSA) Location on Pennington County Map Rapid City on South Dakota Map Pennington County Percentage Change in Population growth (1970 – 2017) United States, Midwest Region, South Dakota, Pennington County, Rapid City (MSA) Percentage Change in Population (2010 – 2017) Population Cohort Pyramid Structure of Pennington County, South Dakota, and the United States (2012 – 2016) Pennington County Cohort Pyramid Projection 2025 and 2030 Pennington County, South Dakota, and the United States Educational Attainment. Porter Cluster Analysis for Pennington County Pennington County Regional Connective to Neighboring Communities

Pennington County, SD LEDAP November 19th, 2018

12 13 14 15 19 20 20 23 24 25

Page 1 2 2 5 5 6 7 8 9 10 15 21

Page | iii

Pennington County, SD Comprehensive LEDAP Introduction: The LEDAP of Pennington County, South Dakota complements the already existing economic goals, objects, and programs of the Rapid City Economic Development Partnership (RCEDP), the Hill City Area Chamber of Commerce (HCACC), and the Rapid City Area Chamber of Commerce (RCACC). The goal of this document is to identify, develop, and utilize Pennington County’s economic strengths and opportunities and to benefit local businesses in the area. The LEDAP is used by economic development practitioners and policymakers to create and promote a sustainable businessfriendly environment in specific localities or regions that foster economic growth and development in the Pennington County region. Overview: Located in the Midwestern region of the United States (US), South Dakota became a state on November 2, 1889. South Dakota is the fifth least-densely populated, and the seventeenth largest state by land size, among the 50 states and the District of Columbia. South Dakota borders the state of Montana at its northwestern border; North Dakota at the north; Minnesota at the east; Iowa at the southeast; Nebraska at the south; and Wyoming at the west. South Dakota is split into two uneven parts by the Missouri River (see Figure 3), which resulted in the creation of two distinct geographical and social regions, known as the East River Region and West River Region of South Dakota. The eastern side of the Missouri River is known for its fertile soil and is home to many farmers, while the western side of the Missouri River is known for ranching and tourist attractions, such as Mount Rushmore and the Black Hills.

Figure 1: Pennington County Location, South Dakota Location on the Contiguous United States Map

Source: U.S. Census Bureau on the maps https://onthemap.ces.census.gov/

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP

Pennington County History: The county is named after John L. Pennington, the fifth governor of the Dakota Territory from January 1, 1874 – April 18781 under the Ulysses S. Grant administration2. Pennington County was founded in 1875. Located at the western side of the Missouri River (see figure 3), Pennington County is the second most populated county in South Dakota. The county borders Custer and Shannon county at the south; Haakon and Jackson at the east; Lawrence and Meade at the north; and Weston County, WY at the western border3. Pennington County has a land mass of 2,784 square miles/7,210 km2, of which 2,777 or square miles/7,190 km2/99.72% is land, while the remaining 7.7 square miles/20 km2/0.28% is water (see figure 2). Pennington County is the third-largest county in South Dakota and home to Mount Rushmore and the Black Elk Wilderness4.

Figure 2 Pennington County Land to Water Ratio

Figure 3 Pennington County Location on South Dakota Map

water 0.28%

Land 99.72% Land

water

Source: Created by author

Source: U.S. Census Bureau on the maps https://onthemap.ces.census.gov/

Pennington County’s Economy: As of 2016, the Pennington County active labor force was 53,696 people5. Pennington County’s main economic drivers are the Health Care and Social Assistance industries, employing 18.90% of the labor force; 15.90% retail trade; 11.60% accommodation and food service; 8.30% education; 7.40% construction; 5.40% finance and insurance; and employing 4.90% in the manufacturing industry (see Table 1). Although the mining, quarrying, oil, and gas extraction industry employs only about 0.10% of Pennington County’s labor force, it is the highest pay industry with an annual median income of

1

http://www.history.nd.gov/exhibits/governors/tgovernors5.html

2 https://www.whitehouse.gov/about-the-white-house/presidents/ulysses-s-grant/

https://onthemap.ces.census.gov/ https://explorer.naco.org/# 5 https://datausa.io/profile/geo/pennington-county-South Dakota/#intro 3 4

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP approximately $57,386; followed by the utility industry, employing 0.60% with an annual income of $50,625; and the transportation & warehousing industry, employing 1.90% with an annual income of $45,4806 (see Table 1). The color grey indicates industries hiring a high percentage of the labor force and the yellow otherwise.

Table 1 Pennington County, South Dakota Employment Count & Share 2016 Industry

NAICS Code

Count

Share

105

0.20%

11

Agriculture, Forestry, Fishing, and Hunting

21

Mining, Quarrying, and Oil and Gas Extraction

32

0.10%

22

Utilities

296

0.60%

23

Construction

3,761

7.40%

Manufacturing

2,494

4.90%

Wholesale Trade

2,080

4.10%

44-45

Retail Trade

8,089

15.90%

48-49

Transportation and Warehousing

964

1.90%

51

Information

828

1.60%

52

Finance and Insurance

2,754

5.40%

53

Real Estate and Rental and Leasing

644

1.30%

54

Professional, Scientific, and Technical Services

1,980

3.90%

55

Management of Companies and Enterprises

672

1.30%

56

Administration & Support, Waste Management and Remediation

1,536

3.00%

61

Educational Services

4,247

8.30%

62

Health Care and Social Assistance

9,640

18.90%

71

Arts, Entertainment, and Recreation

758

1.50%

72

Accommodation and Food Services

5,899

11.60%

81

Other Services (excluding Public Administration)

1,862

3.70%

92

Public Administration

2,346

4.60%

31-33 42

Source: U.S. Census Bureau https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml

Median Household Income and Poverty Rate: The median household income in Pennington County is $51,084 as of 2016, which is less than the nation’s median household, earning $55,322. Pennington County has a poverty rate of 13.8%, which means 15,199 of the population is living below the national poverty line. Table 2 shows the age cohort and gender distribution of people living in poverty, with the 16 – 17 cohort having the lowest rate of 1.5% and the 25 – 34 cohort having the highest rate of 10.2%.

6 https://datausa.io/profile/geo/pennington-county-South Dakota/

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP

Labor Force: The Labor force of a society is the total number of people who are employed or actively seeking work. Pennington County’s highest working-age distribution is between the age group of 30 – 54 and its lowest is between the age of 29 and below. Table 3 shows Pennington County’s racial labor force distribution.

Age cohort

Table 2 Pennington County Poverty Rate by Age & Gender 2016 Gender Share M F M

F

0–5

883

912

6.3%

6.6%

6-11

807

1088

5.8%

7.8%

12-14

378

355

2.7%

2.6%

16-17

212

204

1.5%

1.5%

18-24

879

1082

6.3%

7.8%

25-34

911

1416

6.5%

10.2%

35-44

468

841

3.4%

6%

45-54

530

511

3.8%

3.7%

55-64

598

641

4.3%

4.6%

65-74

323

348

2.3%

2.5%

75 +

117

414

0.8%

3%

Source: U.S. Census Bureau. https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml

Table 3 Pennington County Labor Force Distribution by Race 2016 White Alone Black or African American Alone American Indian or Alaska Native Alone Asian Alone Native Hawaiian or other Pacific Islander Alone Two or More Race Groups

Count

Share

45,745 584 3,136 550 40 932

89.70% 1.10% 6.20% 1.10% 0.10% 1.80%

Source: U.S. Census Bureau, https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml

Rapid City: Rapid City is the major city in Pennington County and home to the major Central Business District (CBD) of the county. RC, Metro Statistical Area (RC—MSA), is located at the western side of Rapid City and has a population of 142,585 people with a median age of 38.1 and a median household income of $51,486. The population of RC—MSA grew by Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP 1.22%, from 140,860 to 142,585, between 2015 and 2016. The racial distribution of RC—MSA is 82.7% White, 6.51% Native American, and 4.55% Hispanic. RC—MSA borders Perkins and Butte county at the north; Ziebach, Haakon, and Jackson at the east; Fall River and Shannon at the south; and Lawrence and Weston, WY at the west. The RC—MSA active labor force is approximately 71,071 people, and the main driving industries are the agriculture, forestry, fishing, hunting, mining, quarrying, oil, gas extraction, and the construction industry. The largest employing industries in RC—MSA are the healthcare and social assistance industry, employing 10,950 people; the retail trade industry, employing 8,717 people; and the accommodation and food service industry, employing 6,937 people. Figures 4 and 5 show the layout of RC—MSA.

Figure 4 Rapid City, South Dakota Metro Area location on Pennington County Map

Figure 5 Rapid City MSA, on South Dakota Map

Source: U.S. Census Bureau on the maps https://onthemap.ces.census.gov/

Pennington County Population Size: With a population size of 110,141 and a median age of 37.5 (FRED), the county has shown a trend of slow population growth at a decreasing percentage change growth rate (see Figure 6). According to the US Census Bureau's population clock, the 2018 United States population as of February 2018 is 327.16 million people, compared to that of the United Nations, which is estimated to be 326.77 million people. Based on several forecasted estimations, South Dakota’s rate of population growth has continued to outpace the national average. In recent years, the state’s population grew by 6.8% from 2010-2017, while the national growth rate was just 5.5% (US Census Bureau). Before 2010, the national rate of population growth exceeded that of South Dakota, but in recent years, South Dakota’s population has grown faster than the nation’s. The same trend can be seen when we compare Pennington County to South Dakota. The most recent national census conducted in the US took place in 2010, and it was confirmed at the time that South Dakota had 816,227 people, which is an 8% growth from 2000.

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP Demographics: Pennington County’s demographic indicators are essential to review its economic prospects, including but not limited to the age of residents, race/ethnicity, household size, the age of householder, householder growth, educational attainment, and household income. As of 2016, distinct factors have contributed to the growth in population in Pennington County that has characterized the region. Figure 8 shows the change in population growth in Pennington County as it compares to RC— MSA, South Dakota, and the US (2011 – 2017). Pennington County has experienced growth in population since 2015 (see Figure 7), however RC—MSA, Pennington County, and South Dakota suffered a decline in population growth in 2015 while the US and the Midwest Region remained flat over the years. Overall, Pennington County has experienced a sustained level of growth. In the last four decades, the population in the county has quadrupled in size.

Figure 6 Pennington County Percentage Change in Population Growth (1970 – 2017) 6.00

4.00

percentage Change

2.00

0.00

-2.00

-4.00

-6.00

Years

Source: U.S. Census Bureau, https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml

Population Projection: The annual population growth has been slow but steady, resulting in a substantial increase from 2010 to 2017. As of 2017, the estimated population of South Dakota was 869,666 people, up less than 1.0% from the population of 861,542 in 2016 (U.S. Census). In 2018, South Dakota was ranked No. 17 in the nation, with a 0.93% population growth rate, falling three spots from 2016 (author’s calculation). By population, the US ranks third in the world, falling behind China (1.4 billion) and India (1.25 billion). Within the US, the most populous states are California, with 39.5 million people; followed by Texas, with 27 million people, and New York, with 8.5 million people.

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP

Year

USA

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

323,128,000 325,511,000 327,892,000 330,269,000 332,639,000 334,998,000 337,342,000 339,665,000 341,963,000 344,234,000

Table 4 Population Projection (2018 – 2025) Projected Projected Growth Rate South Dakota Growth Rate

Pennington County

Projected Growth Rate

861,542 869,666 877,790 885,914 894,038 920,859 948,485 976,939 1,006,248 1,036,435

108,903 110,141 113,445 116,849 120,354 123,965 127,684 131,514 135,460 139,523

2.65% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

0.74% 0.73% 0.72% 0.72% 0.71% 0.70% 0.69% 0.68% 0.66%

2.19% 0.93% 0.93% 0.92% 3.00% 3.00% 3.00% 3.00% 3.00%

Source: (1) South Dakota Dept. of Labor and regulation http://dlr.South Dakota.gov/lmic/menu_demographics.aspx (2) US Census Bureau at www.census.gov (3) Bureau of Economic Analysis at www.bea.gov table CA30 Preliminary Population Projections for South Dakota and Counties, 2010-2035 Figure 7 Percentage Change in Population Growth (2011 – 2017) 2.00%

PERCENTAGE CHANGE IN POPULATION GROWTH

1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 2011

2012

2013

2014

2015

2016

2017

YEAR

United States

Midwest Region

South Dakota

Pennington County

Rapid City city

US Census Bureau https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP Population Pyramid Projection: Figure 9 shows the projected population pyramid for Pennington County for the years 2025 and 2030. The demographic condition of Pennington County, based on our analysis and projection, seem to be in very good shape, but policymakers need to create more opportunity for its younger-aged cohort, so they can start contributing to the local economy and not migrate to another region.

Figure 8 Population Cohort Pyramid Structure of Pennington County, South Dakota and the United States (2012 – 2016) South Dakota

Pennington County

85 years +

1.6% 2.6%

85 years +

80 - 84 years

1.5% 2.6%

80 - 84 years

1.8% 2.5%

75 - 79 years

2.5% 2.7%

75 - 79 years

2.3% 2.8%

70 - 74 years 65 - 69 years 60 - 64 years 55 - 59 years 50 - 54 years 45 - 49 years 40 - 44 years 35 - 39 years 30 - 34 years

3.5% 5.1% 6.2% 7.6% 6.7% 5.5% 5.3% 6.7% 6.7%

4%

70 - 74 years

4.7%

65 - 69 years

6.6% 7.8% 6.8%

1.6% 3.2%

3.2% 4.8%

3.5% 4.7%

6.1%

55 - 59 years

7%

6.9%

50 - 54 years

6.8%

6.8%

6.3%

5.6%

45 - 49 years

5.8%

5.7%

5.4%

40 - 44 years

5.6%

5.4% 5.7%

6.1%

35 - 39 years

6%

6.7%

30 - 34 years

6.7%

6.4%

6.8%

6.3%

7.4%

7.1%

25 - 29 years

20 - 24 years

6.8%

6%

20 - 24 years

15 - 19 years

6.5%

5.7%

15 - 19 years

6.9%

6.6%

5.6%

10 -14 years

6.8%

5 - 9 years 0 - 4 years

6.1% 7.5% 6.9%

1.3% 1.5% 2.2%

70 - 74 years

25 - 29 years

10 -14 years

85 years + 80 - 84 years 75 - 79 years

60 - 64 years

7.4%

United States

6.9%

3.2%

65 - 69 years 60 - 64 years

4.6% 5.7%

2.5% 2.1% 2.7% 3.7% 5% 6%

55 - 59 years

6.6%

50 - 54 years

7%

45 - 49 years

6.7%

40 - 44 years

6.5%

6.4%

35 - 39 years

6.4%

6.2%

6.8% 7% 6.6%

30 - 34 years

6.9%

6.6%

25 - 29 years

7.1%

6.7%

20 - 24 years

7.4%

6.8%

15 - 19 years

6.9%

6.4%

10 -14 years

6.7%

6.3%

6.7%

6.2%

6.5%

6%

7.2%

5 - 9 years

7.2%

6.9%

5 - 9 years

6.9%

0 - 4 years

7.2%

7%

0 - 4 years

6.4%

US Census Bureau https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP

Figure 9: Pennington County Cohort Pyramid Population Projection 2025 and 2030

2025 85+

1.24%

80-84

2.57%

1.02% 1.31%

75-79

1.76%

70-74

85+

1.43%

80-84

1.33%

75-79

1.96%

2.44%

2030

2.73%

2.94%

2.03%

70-74

2.53% 2.69%

1.63% 2.41% 2.90%

65-69

2.88%

3.19%

65-69

60-64

2.93%

2.99%

60-64

2.32%

2.38%

2.38%

2.54%

55-59 50-54 45-49

2.48%

2.48%

55-59

2.50%

2.64%

50-54

2.80%

45-49

3.13%

2.81%

40-44

3.25%

35-39

3.27%

3.19%

2.82%

2.69%

2.70% 3.08%

40-44

3.16%

2.80%

2.88%

35-39

2.93%

2.68%

30-34

3.02%

2.76%

30-34

2.91%

2.76%

25-29

3.01%

2.84%

25-29

3.01%

2.82%

20-24

3.11%

2.90%

20-24

3.18%

15-19

3.28%

3.17%

3.08%

15-19

3.44%

3.31%

10-14

3.54%

3.41%

10-14

3.41%

3.28%

5-9

3.50%

3.37%

5-9

3.36%

3.23%

0-4

3.46%

3.32%

0-4

3.14%

3.28%

8%

6%

4%

2%

0%

2%

4%

6%

8%

8%

6%

4%

2%

0%

2%

4%

6%

Source: South Dakota Dept. of Labor and regulation http://dlr.South Dakota.gov/lmic/menu_demographics.aspx Preliminary Population Projections for South Dakota and Counties, 2010-2035

Pennington County, SD LEDAP November 19th, 2018

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8%

Pennington County, SD Comprehensive LEDAP Educational Attainment: Educational attainment refers to the most recent level of education completed by members of a community. Figure 10 shows the educational attainment between the United States, South Dakota, and Pennington County between the years (2007 – 2011) and (2011 – 2016), while Table 8 shows the Pennington County labor force educational attainment in 2016. Figure 10 Educational Attainment

American Community Survey 5-Year Estimates (2007-2011) 35.00%

35.00%

30.00%

30.00%

25.00%

25.00%

20.00%

20.00%

15.00%

15.00%

10.00%

10.00%

5.00%

5.00%

0.00%

American Community Survey 5-Year Estimates (2011-2016)

0.00% Less than 9th grade

9th to 12th grade, no diploma

High school graduate (includes equivalency) Pennington County

Some college, no degree

Associate's degree

South Dakota

USA

Bachelor's degree

Graduate or professional degree

Less than 9th grade

9th to 12th grade, no diploma

High school Some college, graduate no degree (includes equivalency)

Pennington County

Associate's degree

South Dakota

Bachelor's degree

Graduate or professional degree

USA

Source: US Census Bureau https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP Empirical Analysis: To better understand our stated study area’s industrial comparative and comparative advantage, the following economic development analytical tools were used: Location Quotient analysis, Porter’s Cluster analysis, Shift-Share analysis, Basic employment analysis, and employment multiplier analysis. With the information from our empirical analysis, these will help policymakers and economic development practitioners make empirical data-driven decisions that will foster growth and development in the studied regions. Location Quotient: Location quotient (𝐿𝑄𝑖 ) is an economic development analytical tool that shows how concentrated an industry, cluster, occupation, or demographic group is in a region as compared to the nation. It identifies which industry is basic, and which ones are non-basic. A basic industry is an industry that creates new incomes and additional spending power in an economy, while a non-basic industry is an industry that provides support services to a basic industry. 𝐿𝑄𝑖 of an industry is a ratio that compares a region to a larger reference region. For this study, our equations are as follows:

𝐶𝑜𝑢𝑛𝑡𝑦⁄ 𝑃𝑒𝑛𝑛𝑖𝑛𝑔𝑡𝑜𝑛 𝐶𝑜𝑢𝑛𝑡𝑦 ⁄𝑈𝑛𝑖𝑡𝑒𝑑 𝑆𝑡𝑎𝑡𝑒𝑠 … … … … … … … … … … … … … … … … . . . 𝑒𝑞𝑢𝑎𝑡𝑖𝑜𝑛 1 𝑁𝑎𝑡𝑖𝑜𝑛 =

Industry 𝐿𝑄𝑖 is a way of quantifying how concentrated an industry is in a region compared to a larger geographic area (see this post for an illustration), such as the state or nation. The basic uses of industry 𝐿𝑄𝑖 (and, by extension, for clusters and occupations as well) include these: to identify industries that are export orientated; to identify emerging export-oriented industries; to identify emerging export industries bringing money into the region; and to identify endangered export industries that could erode the region’s economic base. Industry 𝐿𝑄𝑖 is calculated by comparing the industry’s share of regional employment with its share of a larger economy employment. 𝐿𝑄𝑖 tells a much different story than merely job numbers, job growth, and percentage of employment by industry. Industries with high 𝐿𝑄𝑖 , greater than one, are typically (but not always) export-oriented industries, which are important to an economy because they bring in money into the economy rather than circulating already exciting ones. Industries which have both high 𝐿𝑄𝑖 and relatively high total job numbers typically form a region’s economic base. 𝐿𝑄𝑖 analyzes the size of industry/cluster/occupation in terms of jobs, and percent change in 𝐿𝑄𝑖 over a given time. An industry with a high 𝐿𝑄𝑖 with a small number of jobs may be an exportoriented industry but is not vital to the region’s economy. A large, high 𝐿𝑄𝑖 industry with declining 𝐿𝑄𝑖 over time, however, should get more attention from local economic development practitioners and policymakers because these industries are endangering the regional economy. Sometimes, 𝐿𝑄𝑖 is used as a workforce- oriented way of examining industry trends overtime. 𝐿𝑄𝑖 is useful in demographic analysis because it shows what makes the region’s demographics unique in comparison to other local neighboring communities, the state, and the nation.

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP

Description Farm employment Forestry, fishing, and related activities Mining, quarrying, and oil and gas extraction Utilities Construction Manufacturing Wholesale trade Retail trade Transportation and warehousing Information Finance and insurance Real estate and rental and leasing Professional, scientific, and technical services Management of companies and enterprises The administrative, support, and waste management and remediation services Educational services Health care and social assistance Arts, entertainment, and recreation Accommodation and food services Other services (except government and government enterprises) Federal civilian Military State government Local government Total employment (number of jobs)

Table 5 A Comparison of the Actual Figures & Percentage of Employment by Sectors (2016) US, South Dakota, Pennington County, and Rapid City (MSA) US South Dakota # % # %

Pennington County # %

2644000

1.37%

31666

5.28%

572

0.73%

916300

0.47%

5418

0.90%

321

0.41%

1416500

0.73%

2883

0.48%

324

0.41%

605300

0.31%

2154

0.36%

258

0.33%

10096300

5.21%

34578

5.77%

5289

13103700

6.77%

44490

7.42%

2779

6935800

3.58%

23756

3.96%

2544

3.23%

19390100

10.01%

69037

11.51%

10448

7169400

3.70%

16643

2.78%

1659

3357900

1.73%

6906

1.15%

9871600

5.10%

38967

8983500

4.64%

13712200

7.08%

2499300 11877800

Rapid City (MSA) # % 1840

1.93%

6.71%

6834

7.17%

3.53%

3199

3.35%

13.26%

11976

12.56%

2.11%

2252

2.36%

962

1.22%

1056

1.11%

6.50%

4407

5.59%

4931

5.17%

24988

4.17%

3846

4.88%

4813

5.05%

22017

3.67%

3539

4.49%

1.29%

5686

0.95%

842

1.07%

6.13%

18421

3.07%

2520

3.20%

3010

3.16%

4716600

2.44%

10788

1.80%

1624

2.06%

21944300

11.33%

69162

11.53%

10651

13.52%

4323300

2.23%

11453

1.91%

1805

2.29%

2205

2.31%

14415800

7.44%

44488

7.42%

8185

10.39%

9714

10.19%

11388700

5.88%

30837

5.14%

4620

5.86%

5778

6.06%

2852000

1.47%

11362

1.89%

1480

1.88%

3105

3.26%

1927000

0.99%

7888

1.32%

3669

4.66%

3876

4.06%

5301000

2.74%

18822

3.14%

1642

2.08%

1851

1.94%

14220000

7.34%

47177

7.87%

4799

6.09%

6378

6.69%

193668400

100%

599587

100%

78785

100%

95373

100%

Source: Author’s calculations based on the information from the U.S. Bureau of Economic Analysis (BEA)

Pennington County, SD LEDAP November 19th, 2018

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Pennington County, SD Comprehensive LEDAP Table 6 𝑳𝑸𝒊

𝑳𝑸𝒊 Interpretation

Greater-than (>) 1 Equal to (=) 1 Less-than (

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