The Industry Concentration Map: Sector Clustering by Location (2022)

What if you could see that California has 142,540 professional services establishments while Wyoming has just 3,068—revealing exactly where your industry clusters? This Industry Concentration Map reveals sector clustering by location—and how you can position yourself in industry clusters where your sector is concentrated.

The data shows dramatic clustering: professional services (NAICS 54) ranges from 142,540 establishments in California to 3,068 in Wyoming—a 46x difference. This isn’t just about geography—it’s about understanding industry concentration, sector clustering, and location opportunities that directly impact your competitive strategy and market positioning.

Visualize industry concentration to see sector clustering by location. This map reveals where industrie

This analysis examines County Business Patterns (CBP) data from the U.S. Census Bureau to visualize industry concentration—sector clustering by location, revealing where industries are concentrated across all U.S. states. You’ll discover which states have the highest industry concentration, how sector clustering varies by location, and where opportunities exist for businesses in industry clusters.

What You’ll Discover:

• State rankings by industry establishment counts (concentration indicators)
• Industry-specific clustering patterns revealing sector concentration by location
• Location-specific concentration indicators impacting competitive strategy
• Sector clustering analysis by industry and location
• Industry cluster indicators for strategic location decisions

Why This Matters: Understanding industry concentration helps you identify where your industry clusters, assess ecosystem benefits, and make strategic location decisions. Markets where your industry is highly concentrated offer access to industry clusters with ecosystem advantages, talent pools, and competitive benefits.

Industry Concentration Varies Dramatically by Location

The Numbers: Professional services ranges from 142,540 establishments in California to 3,068 in Wyoming—a 46x difference. This means California has 46x more professional services establishments than Wyoming, indicating very strong industry clustering in California.

So What? Different locations show dramatically different industry concentration, indicating vastly different sector clustering and ecosystem benefits. Understanding these patterns helps you identify where your industry clusters and where ecosystem benefits exist.

How to Use This: If you’re in professional services, markets with high concentration (50,000+ establishments) like California (142,540) indicate very strong industry clusters with ecosystem benefits. Target these markets for access to clusters, talent pools, and competitive advantages.

Concentration Reveals Industry Clusters

The Numbers: States like California (142,540 establishments), Florida (92,313), Texas (81,011), and New York (61,831) have the highest professional services concentration, indicating strong industry clusters with ecosystem benefits.

So What? Industry concentration indicates sector clustering. Markets where your industry is highly concentrated offer access to industry clusters with ecosystem benefits, talent pools, supplier networks, and knowledge sharing. These clusters provide competitive advantages.

How to Use This: Target markets where your industry has high concentration (50,000+ establishments) for access to industry clusters. These markets offer ecosystem benefits, talent access, and competitive advantages that lower-concentration markets may not provide.

Location Strategy Must Account for Clustering

The Numbers: The difference between the highest-concentration state (California, 142,540 establishments) and lowest-concentration states (Wyoming, 3,068) is 46x, meaning dramatically different industry clustering and ecosystem benefits.

So What? Industry clustering directly impacts your competitive position. Markets where your industry is highly concentrated offer ecosystem benefits and competitive advantages. Your location choice should prioritize markets with high industry concentration for your sector.

How to Use This: For businesses requiring industry ecosystem access, target markets with high concentration (50,000+ establishments) for your industry. These markets offer cluster benefits, talent access, and competitive advantages.

Red Flags

• Very Low Concentration (<5,000 establishments): May indicate limited industry presence and lack of industry clusters
• Concentration-Competition Mismatch: Markets with high concentration but also very high competition may create challenging competitive dynamics
• Declining Concentration: Markets where industry concentration is decreasing may signal cluster decline

Green Lights

• Very High Concentration (50,000+ establishments): Indicates strong industry clusters with ecosystem benefits, talent pools, and competitive advantages
• High Concentration with Growing Employment: Markets with high concentration and growing employment signal expanding clusters
• Consistent High Concentration: Markets with consistently high concentration offer stable cluster benefits
• Diverse Industry Clusters: Markets with concentration across multiple related industries offer stability and multiple cluster benefits

How to Use This Data

Follow this step-by-step process to identify industry concentration and make data-driven location decisions:

Step 1: Identify High-Concentration Markets for Your Industry

Compare establishment counts across states for your industry (NAICS code):

• State-level: Get broad industry concentration identification
• Industry-specific: Use NAICS-filtered data for your specific industry
• Concentration Ranking: Rank states by establishment counts to identify highest-concentration markets

Action: Create a spreadsheet with all 50 states. List establishment counts for your industry in each. Rank by count to identify highest-concentration markets (industry clusters).

Step 2: Assess Industry Cluster Benefits

High concentration indicates industry clusters with ecosystem benefits:

• Ecosystem Benefits: Access to talent pools, supplier networks, and knowledge sharing
• Cluster Advantages: Competitive advantages from industry clustering and ecosystem access
• Market Structure: Different competitive dynamics and market structures in clustered markets

Action: For each high-concentration market, assess cluster benefits. Identify markets with ecosystem benefits, talent access, and competitive advantages.

Step 3: Evaluate Cluster vs. Competition

Balance industry clustering benefits with competition levels:

• High Concentration, High Competition: May offer cluster benefits but also intense competition
• High Concentration, Moderate Competition: Offers best balance of cluster benefits and manageable competition
• Moderate Concentration, Low Competition: May offer some cluster benefits with less competition

Action: For each high-concentration market, evaluate cluster benefits vs. competition. Choose markets that offer cluster benefits with manageable competition.

Step 4: Choose Your Cluster Location

Select markets with high industry concentration that match your business needs.

Action: Create a decision matrix scoring each location on: industry concentration (40%), cluster benefits (30%), and competition (30%). Choose the location with highest score.

Step 5: Make Your Location Decision

Combine industry concentration analysis with other factors (business climate, costs) to choose your location.

Action: Create a final decision matrix scoring each location on: industry concentration (30%), cluster benefits (30%), business climate (20%), and costs (20%).

Common Use Cases

Scenario 1: Seeking Industry Cluster Benefits → Focus on markets with very high industry concentration (50,000+ establishments). These markets offer strong industry clusters with ecosystem benefits, talent pools, and competitive advantages.

Scenario 2: Balanced Cluster and Competition → Target markets with high concentration (20,000-50,000 establishments) and moderate competition. These markets offer cluster benefits with manageable competition.

Scenario 3: Emerging Cluster Opportunity → Consider markets with moderate concentration (10,000-20,000 establishments) but growing employment. These markets may offer emerging cluster benefits with less competition.

Scenario 4: Risk-Averse Strategy → Focus on markets with moderate-to-high concentration (20,000-50,000 establishments) that offer proven cluster benefits with stable competition.

Questions to Ask Yourself

• How important are industry cluster benefits vs. competition for my business?
• Do I need very strong clusters (50,000+ establishments) or is moderate concentration (20,000-50,000) sufficient?
• What cluster benefits do I need—talent access, supplier networks, or knowledge sharing?
• Am I entering a validated cluster or an emerging one?

Action Items Checklist

• Identify high-concentration markets for your industry by ranking states by establishment counts
• Assess industry cluster benefits (ecosystem, talent, suppliers) in high-concentration markets
• Evaluate cluster benefits vs. competition levels for each candidate market
• Research cluster ecosystem benefits and talent access in high-concentration markets
• Compare cluster benefits with business climate and costs
• Create a decision matrix scoring each location on concentration, cluster benefits, and competition
• Consult with Business Initiative for industry concentration analysis and location strategy guidance

Industry-Specific Recommendations

Professional Services (NAICS 54): Target markets with very high concentration (50,000+ establishments) like California (142,540), Florida (92,313), and Texas (81,011). Professional services benefit from industry clusters with ecosystem benefits and talent access.

Technology Services (NAICS 51): Focus on markets with high concentration in tech hubs. Technology businesses benefit from industry clusters with tech ecosystems, talent pools, and knowledge networks.

Health Care (NAICS 62): Look for markets with high concentration (20,000+ establishments) for health care. Health care businesses benefit from industry clusters with provider networks and talent access.

Financial Services (NAICS 52): Target markets with high concentration in financial centers. Financial services benefit from industry clusters with financial ecosystems and talent access.

Manufacturing (NAICS 31-33): Prioritize markets with moderate-to-high concentration for manufacturing. Manufacturing businesses benefit from industry clusters with supplier networks and talent access.

Common Mistakes to Avoid

Mistake 1: Using Only Establishment Counts Without Employment Analysis Establishment counts show concentration but don’t reveal cluster size or ecosystem strength. Always combine establishment counts with employment data to assess cluster strength and ecosystem benefits.

Mistake 2: Ignoring Competition in High-Concentration Markets High concentration may indicate strong clusters but also high competition. Don’t ignore competition—high-concentration markets may have intense competition that offsets cluster benefits.

Mistake 3: Not Considering Industry-Specific Clustering Overall concentration doesn’t reflect your industry’s specific clustering patterns. Always use NAICS-filtered data for your specific industry to assess concentration and clustering.

Mistake 4: Overlooking Emerging Clusters Markets with moderate concentration but growing employment may indicate emerging clusters. Don’t overlook emerging clusters—they may offer cluster benefits with less competition.

Mistake 5: Not Validating with Market Research Concentration data shows clustering but doesn’t reveal ecosystem dynamics, talent availability, or cluster strength. Always validate with market research and local cluster analysis.

Optimization Strategies

For Maximum Cluster Benefits: Target markets with very high industry concentration (50,000+ establishments) that offer strong industry clusters with ecosystem benefits, talent pools, and competitive advantages.

For Balanced Approach: Focus on markets with high concentration (20,000-50,000 establishments) that offer cluster benefits with manageable competition.

For Emerging Cluster Opportunity: Consider markets with moderate concentration (10,000-20,000 establishments) but growing employment that may offer emerging cluster benefits with less competition.

For Risk-Averse Strategy: Prioritize markets with moderate-to-high concentration (20,000-50,000 establishments) that offer proven cluster benefits with stable competition.

Timing Considerations

Best Time to Enter High-Concentration Markets: When you have resources ready and competitive positioning complete. High-concentration markets reward businesses that can leverage cluster benefits and ecosystem access.

Best Time to Enter Emerging Clusters: When concentration is growing, indicating expanding clusters. Emerging clusters offer cluster benefits with less competition but require careful market validation.

When to Reassess: Review industry concentration data annually when new CBP releases become available. Market positions change, and what was high-concentration 2-3 years ago may not be today.

Resource Recommendations

For Concentration Analysis:

• Census Bureau County Business Patterns (official CBP data source)
• NAICS code lookup tools (identify your industry classification)
• Industry cluster mapping tools (visualize industry concentration)
• State economic development websites (local cluster insights)

For Location Support:

• Business Initiative location strategy services
• Local chamber of commerce (county-level cluster information)
• State Secretary of State websites (business registration requirements)

For Cluster Research:

• Combine CBP establishment and employment data to assess industry concentration
• Research local cluster dynamics and ecosystem benefits
• Consult with Business Initiative for personalized industry concentration analysis and location guidance

FAQs - Frequently Asked Questions About The Industry Concentration Map: Sector

In Summary

Our comprehensive exploration of industry concentration (2022) has revealed critical insights into sector clustering, industry ecosystems, and location opportunities that can inform strategic business decisions.

Key Findings:

• Industry concentration varies dramatically by location—professional services ranges from 142,540 establishments in California to 3,068 in Wyoming (46x difference)
• Concentration reveals industry clusters—markets where your industry is highly concentrated (50,000+ establishments) indicate strong industry clusters with ecosystem benefits
• Location strategy must account for clustering—choosing markets where your industry is concentrated provides access to industry clusters with ecosystem benefits, talent pools, and competitive advantages
• High-concentration markets offer cluster benefits—markets with very high concentration (50,000+ establishments) offer strong industry clusters with ecosystem benefits, talent access, and competitive advantages
• Balanced approach often offers best opportunity—markets with high concentration (20,000-50,000 establishments) and moderate competition offer cluster benefits with manageable competition

What This Means for Your Business: Understanding industry concentration helps you identify where your industry clusters, assess ecosystem benefits, and make strategic location decisions. Markets where your industry is highly concentrated offer access to industry clusters with ecosystem advantages, talent pools, and competitive benefits. The best approach balances industry concentration (cluster benefits) with competition and business climate.

Practical Applications:

• Location Strategy: Use concentration data to identify markets where your industry has high concentration (50,000+ establishments) for access to industry clusters
• Market Analysis: Compare industry concentration across locations to understand sector clustering and ecosystem benefits
• Competitive Positioning: Target markets with high industry concentration for access to clusters, talent, and competitive advantages
• Strategic Planning: Prioritize markets with very high concentration (50,000+ establishments) for maximum cluster benefits and ecosystem access

Next Steps:

1. Identify high-concentration markets for your industry by ranking states by establishment counts
2. Assess industry cluster benefits (ecosystem, talent, suppliers) in high-concentration markets
3. Evaluate cluster benefits vs. competition levels for each candidate market
4. Compare cluster benefits with business climate and costs
5. Consult with Business Initiative for industry concentration analysis and location strategy guidance

Ready to take action based on this data?

This data can help you make informed decisions about business location, market entry, and strategic planning.

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