Location Quotient Analysis of Bostons Creative Economy Prepared by: Yolanda Perez Martina Kukin Paul Leonard Key Findings: Fourteen of the fifteen largest creative industries had an LQ higher than 1.0, meaning that these industries were more concentrated in Boston compared to the nation. Fourteen of the fifteen largest creative industries had an LQ higher than 1.0, meaning that these industries were more concentrated in Boston compared to the nation. Of the fifteen largest creative industries only cable and other program distribution had an LQ lower than 1. Of the fifteen largest creative industries only cable and other program distribution had an LQ lower than 1. Ten of the fifteen largest industries had an LQ higher than 2.0, meaning that these industries were more than twice as likely to be located in Boston compared with the nation. Ten of the fifteen largest industries had an LQ higher than 2.0, meaning that these industries were more than twice as likely to be located in Boston compared with the nation. Six industries had LQs higher than 3.0. Six industries had LQs higher than 3.0.

Location Quotients A useful step in the economic analysis of a locality is to determine the industry structure of the area, and how this may differ from the nations industry structure. Using the Location Quotient (LQ), we are able to determine what industries are more concentrated or less concentrated in Boston when compared with the nation. To determine the LQ of an industry we first determine what percentage the local industrys employment is compared to the total local employment. Next, taking the same industry nationally we determine what percentage the industrys employment is compared to the total national employment. The location quotient is simply the ratio of these two values with the local share as the numerator and the national share as the denominator. If the industry has a location quotient greater than 1.0, it is more concentrated in the local economy compared to the nation. An LQ less than 1.0 means that the industry is less concentrated in the local economy. An LQ equal to 1.0 means that the local economy has the same share of its total employment in that industry as the nation. Some industries may have very high location quotients; a locality relies more on these industries than the nation in the size and structure of its economy..For example, an industry that has an LQ of 3.0 has an employment share three times greater in the local economy compared to the national economy, while an industry with an LQ of 0.5 has an employment share half the size locally compared to the nation. It would be advantageous if the industries with large location quotients are also the same exact industries that are experiencing significant employment growth. If this is so, the economy is healthy. Location quotient analysis is a powerful analysis tool

Low LQHigh LQ Eployment Share Equal to U.S. Direct Mail Advertising Advertising Agencies Museums Cable Networks Musical Groups Periodical Publishers Book Stores and News Dealers Cable and Other Program Distribution Radio Broadcasting Newspaper Publishers Architectural ServicesBook Publishers Television Broadcasting Promoters of Entertainment Events w/o Facility Nearly all the largest creative industries have very high LQs