Economic base analysis was created by Robert Murray Haig in 1928. Briefly, it assumes that activities in an area split into two categories: basic and non-basic. Basic industries are those that export from the area and bring wealth from outside; non-basic industries provide the support to basic industries. The concepts of basic and non-basic operations are studied through the application of employment data.
An economic base represents all the exporting activities of a certain economy. This is something that is produced in the local economy, but is sold outside of its borders as an export. A strong economic base is very important for the provision of the growth of a certain area, because the quantity of exports defines the total level of local economic activity. MSA, Metropolitan Statistical Area’s economy, sometimes can be analyzed to see what exactly makes up the base and non-base industries of the economy. Economic base analysis focuses on the essence of exports to the local economy. A local area doesn’t have much impact on the demand for the goods and services it exports. This demand is defined outside the local area by economic terms in the region and the entire state. The variability of a local economy may also be defined by an economic base analysis. A healthy economy is a variable one. It is necessary to have a variable economic base in order to provide a more stable economic system for a MSA. If total export employment is distributed over different industries, then it is better equipped to deal with a few of them having decreased economic activity.
The MSA is especially interested in the analysis of San Francisco, California. The analysis after examination helps to define the economic base of this MSA and show, among other things, if San Francisco has a strong and healthy local economy. The seven industries in the city with the largest location quotients are described in the analysis as well as the seven biggest industries in terms of their total employment. The analysis gives a good picture of what really builds the local economic base of San Francisco and provides a forecast of this economy’s potential in the near future.
The city and county of San Francisco is the fourth-largest city in California. The region’s economic base is defined by some of the fastest growing industries in the state, including foreign trade, high technology, entertainment and tourism, and professional services. The concentration of firms at the Bay Area serves as the rapidly growing market of digital media and internet tools, which will provide rapid growth in the region for many years to come.
Economic base analysis was created by Robert Murray Haig in 1928. Briefly, it assumes that activities in an area split into two categories: basic and non-basic. Basic industries are those that export from the area and bring wealth from outside; non-basic industries provide the support to basic industries.