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Target Industry Analysis the Choctaw Nation of Oklahoma Choctaw Nation of Oklahoma

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Target Industry Analysis the Choctaw Nation of Oklahoma Choctaw Nation of Oklahoma NOVEMBER 2018 TARGET INDUSTRY ANALYSIS THE CHOCTAW NATION OF OKLAHOMA CHOCTAW NATION OF OKLAHOMA CONTENTS INTRODUCTION ...................................................................................................................................... 1 FOOD PROCESSING .............................................................................................................................. 14 DISTRIBUTION AND LOGISTICS ............................................................................................................... 18 NATURAL RESOURCES VALUE CHAIN ....................................................................................................... 22 TOURISM ............................................................................................................................................... 26 AEROSPACE AND DEFENSE .................................................................................................................... 30 UNMANNED AIRCRAFT SYSTEMS ........................................................................................................ 35 MATERIALS PROCESSING AND REMANUFACTURING ................................................................................ 37 STRATEGIC CONSIDERATIONS ................................................................................................................ 41 Cover image credits: (top row, left to right) TIP Strategies staff photo, TIP Strategies staff photo, TIP Strategies staff photo, TIP Strategies staff photo, and Cypress Reflections by Lane Pearman via Flickr (CC BY 2.0); (far left middle) IMG_9439 by Jack Gray via Flickr (CC BY 2.0); (bottom row, left to right) TIP Strategies staff photo; Talimena Scenic Drive by Alex Butterfield via Flickr (CC BY 2.0), TIP Strategies staff photo, and TIP Strategies staff photo. TARGET INDUSTRY ANALYSIS PAGE | ii CHOCTAW NATION OF OKLAHOMA INTRODUCTION Communities select target industries to narrow the THE TARGETING APPROACH focus of their economic development marketing efforts to generate leads and attract new business. Target QUANTITATIVE industries are chosen because they represent the best What do the data tell us? opportunities for new investment and job growth. A three-pronged approach was used to select the + target industries for the Choctaw Nation of Oklahoma QUALITATIVE (CNO) and southeast Oklahoma. This includes a What have we learned about the region’s quantitative analysis of industry trends both regionally assets and challenges? and nationally; qualitative input about the region’s unique assets and key challenges; and strategic + STRATEGIC factors that will influence industry growth regionally, nationally, and globally. What trends, relationships, etc. will influence opportunities going forward? The process of identifying target industries is outlined on the following page. This process incorporates all In identifying target sectors, our team examined three elements of the targeting approach and results in detailed data to identify which industries are well- a strong strategic framework to guide CNO’s established in the region, how they performed in economic development marketing activities. recent years, and how they are expected to perform in the near term. For this analysis we Through this process, six target industries were looked at factors including strategic assets, identified: existing initiatives, critical mass, competitive advantage, growth prospects, and cross-sector • Food processing synergies. • Logistics and distribution • Natural resources value chain In the first phase of this project ― the economic • Tourism assessment ― we reviewed employment using • Aerospace and defense standard NAICS industry classifications. For the • Materials processing and remanufacturing targeting analysis, we take this a step further by filtering employment within an industry “cluster” On the following pages, we present the findings from framework developed by the US Economic the steps of the targeting process. Following the Development Administration in conjunction with findings are industry profiles that include industry the Institute for Strategy and Competitiveness at descriptions and trends, market opportunities, staffing Harvard Business School. patterns, and resources for industry intelligence and In addition, an analysis of capital investments networking. relies on categories defined by fDi Markets, an operating subsidiary of the Financial Times. Next, the analysis of entrepreneurial investment relies on categories of venture capital investment defined by PricewaterhouseCoopers. TARGET INDUSTRY ANALYSIS PAGE | 1 CHOCTAW NATION OF OKLAHOMA THE GEOGRAPHY The Target Industry Analysis was completed for the 11-County Area that most closely aligns with the boundaries of the Choctaw Nation (see map below). Note: parts of Hughes County, Coal County, and Bryan County lie outside the boundaries of the Choctaw Nation; however, these counties were included in the analysis. Conversely, the Choctaw Nation does include small portions of Ponotoc and Johnston Counties, but these counties were not included in the analysis. Counties included in 11-County Study Area Choctaw Nation of Oklahoma TARGET INDUSTRY ANALYSIS PAGE | 2 CHOCTAW NATION OF OKLAHOMA THE TARGETING PROCESS THE TARGETING What STRATEGIC ASSETS do we have to give us a competitive edge? PROCESS What does the RELATIVE SIZE of our employment sectors tell us about the local economy? In which sectors can we anticipate the strongest JOB GROWTH? What do we know about local employers’ HIRING NEEDS? How have local CAPITAL INVESTMENT patterns differed from national patterns? How does this help us shape and focus our TARGET FRAMEWORK? Source: TIP Strategies TARGET INDUSTRY ANALYSIS PAGE | 3 CHOCTAW NATION OF OKLAHOMA KEY FINDINGS FROM THE TARGETING PROCESS Note: tribal employment is classified under Local Government, which is considered a local cluster. While we acknowledge that many of the Choctaw business lines would be considered traded sectors, it is not possible to break tribal employment out by business line to make adjustment to the sector totals. As a result, Hospitality & Tourism, Business Services, and Aerospace and Defense are understated in this analysis. Fewer jobs in the 11-County Area are in traded sectors compared to the US (66 percent versus. 73 percent), demonstrating a higher dependency on local spending in the economy. Livestock Processing, Oil & Gas Production & Transportation, and Federal Government are the largest traded clusters in the 11-County Area. Livestock Processing and Forestry have the largest location quotients (LQs), which signals a high concentration of these industries in the region compared to the US. Other traded clusters with significant LQs include Oil & Gas Production & Transportation, Wood Products, and Nonmetal Mining. The total growth rate for all traded sectors in southeast Oklahoma is expected to be slightly lower than the US over the next five years (4.4 percent versus 5.5 percent). This is largely due to projected job losses in the Education and Knowledge Creation sector and in Livestock Processing. However, the projected growth rates of the region’s top traded clusters outpace the national projected growth rate for the clusters, which means the relative concentration of the clusters will likely increase in the region over the near- term. Downstream Chemical Products and Upstream Chemical Products stand out as growing close to 50 percent over the next five years. The top three occupations by postings in 2017 are Heavy and Tractor-Trailer Truck Drivers, Telecommunication Equipment Installers and Repairers, and Merchandise Displayers and Window Trimmers. These occupations also have LQs above 1.25, demonstrating a unique advantage. Optimization Software, IDSC Expert Fuel and Utility Trailers were the top three skills requested by job postings in 2017. The 11-County Area also has many high- demand skills related to trucking and transportation. Foreign and out-of-state investment into the 11-County Area was largely directed into the Coal, Oil and Natural Gas sector and the Metals sector. Other destinations for investment included Automotive OEM, Plastics, and Wood Products. Investment in Metals and Wood Products also had high LQs, showing that the 11-County Area had proportionally more investment in these areas than the US as a whole. Inbound investment into the 11-County Area came from across the US. The largest number of deals came from Texas and Oklahoma. TARGET INDUSTRY ANALYSIS PAGE | 4 CHOCTAW NATION OF OKLAHOMA COMPETITIVE POSITIONING MARKET ACCESS SITES & BUILDINGS TRANSPORTATION • 28 million US households • Ample inventory of raw land; • Highway 75/69 within a one-day drive favorable cost • Indian Nation Turnpike • 63 million US households • Few new buildings • Class I Railroads: UP, BNSF, KC within one-and-a-half day drive • Shortlines: KRR, AOK, TO & E • Navigable Waterway: MKARN System, Ports of Keota and Carl Albert UTILITIES WORKFORCE EDUCATION • Affordable electricity rates – • Laborforce over 100,000 • Full range of post-secondary lower than the national opportunities at KTC, • Strengths: middle skill/ average Southeastern Oklahoma State, industrial Carl Albert, Eastern Oklahoma • Natural gas availability State • Ample water sources • Proximity to University of • 100 Gb/s fiber Oklahoma and Oklahoma State University Source: TIP Strategies TARGET INDUSTRY ANALYSIS PAGE | 5 CHOCTAW NATION OF OKLAHOMA EMPLOYMENT CLUSTERS: TRADED VS LOCAL EMPLOYMENT IN 2017 BASED ON CLUSTER TYPE
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