Economic Development Organizations (EDOs) face a complex task in pinpointing new viable target sectors for foreign direct investment (FDI) or business retention & expansion (BR&E).
Depending solely on well-established industries poses risks, limitations, and hampers potential job creation. This approach can eventually hinder a region's ability to future-proof its economy.
However, by proactively identifying and investing in emerging sectors, EDOs can position their region for future success. Emerging sectors often demand specialized knowledge, and neglecting them may curb the growth of a skilled workforce fit for future demands.
When identifying sectors, it's important for EDOs not to cast their nets too wide, as doing so can make it difficult to zero in on prospective companies. For instance, simply aiming for “technology” or “AI” isn't precise enough.
The true magic unfolds as you delve into specialized subsectors, substituting the generic "tech sector" with distinct categories like Agtech or Medtech. Getting specific is where the potential goldmine lies.
So, here's the big question: How can EDOs find new opportunities that match their workforce?
Emerging Tech Sectors
By employing research tools like Gazelle, EDOs can explore opportunities in emerging markets with unprecedented precision. Below are emerging tech sectors that are experiencing rapid growth on a global scale.
The Compound Annual Growth Rate (CAGR) is a formula used to measure how an investment, business, or industry has grown over a specific period of time. It is used to predict industry growth by analyzing historical revenue growth and the average annual growth rate of an industry over a specific period.
The chart below highlights the most rapidly expanding subsectors within these emerging markets. These subsectors not only showcase innovation but also represent potential areas to target for investment opportunities.
Beyond NAICS Codes: Using Advanced Research Strategies with Gazelle
As a research platform, Gazelle is unique in that it does not exclusively rely on North American Industry Classification System (NAICS) codes, which struggle to capture emerging markets.
NAICS codes, while comprehensive and reliable, are not regularly updated making it difficult to conduct granular searches in up-and-coming sectors.
To tackle this, Gazelle integrates NAICS codes with keyword searches, offering a solution to the limitations of traditional classification systems.
3 Steps to Uncovering FDI & BR&E Opportunities
Choose from our curated keyword categories or select your own; in addition to NAICS searches
As an example, simply search for “FinTech” companies with a growth score of 5 or 6. Narrow down your results even further by viewing growing FinTech companies that have received funding. Research funding by stage e.g. Series C funding signifies a company firmly established on its growth trajectory, often poised for global expansion.
Further refine your search by targeting companies that are not in your area. For instance, find “FinTech” companies with “headquarters in Europe” but with “no current presence in the United States”.
3. Further refine your search by targeting companies that are not in your area. For instance, find “FinTech” companies with “headquarters in Germany,” but with “no current presence in the United States”.
The ability to perform such advanced research allows EDOs to find promising prospects with a high chance of expanding into your region. This approach condenses the research from potentially thousands of low-quality prospects to a manageable list of top-tier candidates.
Navigating Tomorrow's Opportunities
Embracing emerging sectors that fuel employment is the new driver of economic development. To ensure long-term growth, it is no longer enough to target traditional industries. By adopting advanced research tools like Gazelle, EDOs can keep their pulse on emerging opportunities.
Data tools like Gazelle stand as indispensable companions on an EDOs journey to achieve prosperity for their community. For further insights into trending market sectors, reach out to us and read Top 10 Industries to Target.