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TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 38 APPENDIX A: EMPLOYER SURVEY To better understand local economic and workforce related opportunities and challenges, an online survey was conducted as part of the study. The survey offered employers the opportunity to share their experiences with operating a business and hiring, training, and retaining of workers in the Territory. The survey was distributed by the Virgin Islands’ Bureau of Economic Research (“BER”) through August 2014. A total of 81 firms responded. RESPONDENT PROFILE Figure 25 shows selected characteristics of firms that participated in the survey. Respondents largely described themselves as being in service industries. Tourism and hospitality related industries were the largest category, representing 15 percent of respondents. Other service industries represented in the survey include healthcare, professional services, finance and insurance, retail, and real estate. These six industries made up almost 60 percent of respondents. The share of firms in industrial sectors, such as construction, utilities, and manufacturing industries, was around 10 percent, although two of those firms represented a relatively large number of employees. One manufacturer reported between 26 and 50 employees, and one communications utility had over 400 employees. FIGURE 25. RESPONDENT PROFILE Source: Online employer survey conducted by TIP Strategies, summer 2014 Industry Location # Full-time Workers Time operating in Territory % # St. Croix St. Thomas St. John 10 or fewer 11-25 26-50 51-100 101-400 More than 400 Not indicated 0-2 years 2-5 years 5-10 years 10-20 years 20+ years Not indicated Yes No Not indicated Tourism/Hospitality 15% 12 12 7 4 1 5 7 12 Health Care 10% 8 6 2 7 1 1 1 1 4 1 7 1 Professional Services 10% 8 7 1 6 1 1 1 2 2 1 2 7 1 Finance/Insurance 9% 7 7 6 1 2 1 1 3 7 Retail 9% 7 7 5 2 1 1 2 3 5 2 Real Estate 6% 5 5 4 1 1 4 4 1 Manufacturing 5% 4 3 1 3 1 2 2 2 2 Construction 3% 2 2 2 1 1 2 Agriculture 3% 2 2 2 2 2 IT (Hard & Software) 3% 2 1 1 2 1 1 2 Utilities 3% 2 2 1 1 1 1 2 Wholesale Trade 3% 2 2 1 1 2 2 Cultural/Recreation 1% 1 1 1 1 1 Shipping/Storage 1% 1 1 1 1 1 Support Services 1% 1 1 1 1 1 Other/Not indicated 19% 17 15 2 12 4 1 3 1 2 4 6 1 13 3 1 Total 81 72 9 0 61 14 3 0 1 1 1 8 8 9 20 34 2 70 9 2 HQ TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 39 Of respondents who provided a location, more than 80 percent (72 firms) were located in St. Croix. The remaining nine firms were located in St. Thomas, including the previously mentioned utility. There were no respondents from St. John. Businesses with less than 10 employees represented just over three-quarters of respondents. Firms with between 11 and 50 employees represented 21 percent of respondents. In addition to the utility, only one firm employed more than 50 workers—a firm in the tourism/hospitality sector that employed between 101 and 400 staff. More than 40 percent of respondents (34 firms) reported having operated in the Territory for over 20 years and another 25 percent for 10 to 20 years. All but six firms reported that their headquarters were based in the Territory. Of those six, two were manufacturers, and the remainder were in service industries (retail, finance/insurance, health care, and professional services.) Responses concerning the composition of the workforce (Figure 26) revealed that management and professional/ technical occupations were the most common groups employed by the 79 firms who completed the question. As would be expected, managers accounted for a relatively small share of employment (less than 10 percent) for most respondents. For a few firms, this occupational category comprised more than 50 percent of the workforce. However, these tended to be very small firms with only a handful of workers. Unskilled labor was the least common reported occupation, with only around one-half of responding firms employing workers from that category. Respondents were also less likely to employ skilled workers—a category including skilled production, craft workers, machinists, welders— reflecting the predominance of service firms among the participants. RECRUITING & HIRING Responses to the two questions concerning hiring plans (Figure 27) were mixed. One third (33 percent) of firms indicated plans to hire additional employees within the Territory in the next two years. The remaining respondents were either not sure (36 percent) or not planning to make any hires (30 percent). Among the 37 participants that provided detail on hiring plans, a total of roughly 220 hires were projected. Approximately 40 percent of firms that planned to hire were anticipating the need for administrative support and professional/technical staff. In terms of the number of planned hires, skilled labor was the largest group, representing about one-quarter of the 220 positions anticipated. Unskilled labor and professional/technical workers were the next largest group in numeric terms representing about 16 percent each of the 220 jobs. FIGURE 26. COMPOSITION OF WORKFORCE Approximate share of workforce by broad category 49% 43% 26% 25% 19% 13% 14% 19% 30% 34% 23% 46% 10% 17% 10% 21% 8% 17% 8% 6% 14% 9% 23% 16% 6% 6% 6% 4% 13% 1% 12% 9% 14% 8% 13% 6% 0% 20% 40% 60% 80% 100% Unskilled/Laborers Skilled Labor Sales/Marketing Clerical/Administrative Professional/Technical Management None Less than 10% 10 to 24% 24% to 49% 50 to 74% 75% or more TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 40 Of the 64 participants who responded to the question concerning time require to fill workforce vacancies (Figure 28), almost 40 percent indicated that professional/technical positions required four months or more to fill. Skilled labor, management, and sales/marketing occupations faced similar recruitment challenges, with each category taking four months or more to fill for roughly 25 to 30 percent of responding firms. Hiring times for clerical/administrative positions were more moderate, with over 60 percent of respondents reporting vacancy periods of three months or less. Unskilled labor was reported as the easiest category to fill, with nearly 55 percent of firms reporting vacancies lasting no longer than three months. Most of the respondents who provided “Other” responses did not specify a worker classification. The three firms that did elaborate specified restaurant workers, driver/runners, and independent direct marketers. Respondents were given the opportunity to identify specific occupations and skills they found difficult to recruit in their industry, as well as those they anticipate needing in the future. The resulting responses were too disparate to categorize without sacrificing an important level of detail. The wide array of responses is likely a reflection of the individualized nature of hiring needs of very small businesses, which comprised the vast majority of participating firms. For this reason, the responses to these two questions are included, in their entirety, at the end of this section as Figure 35 and Figure 36. FIGURE 27. HIRING PLANS Plans to hire next 2 years? If yes, what types of workers do you anticipate adding? Source: Online employer survey conducted by TIP Strategies, summer 2014. Responses about anticipated hiring were provided by the 23 firms that indicated hiring plans. Responses under “# of firms planning to hire in specified category” do not total 23, as a single firm could indicate hiring plans across multiple occupational categories. FIGURE 28. TIME TO FILL WORKFORCE VACANCIES Source: Online employer survey conducted by TIP Strategies, summer 2014 No 21 firms 30% Yes 23 firms 33% Not sure 25 firms 36% Broad category # of firms planning to hire in specified category # of hires ancitipated in specified category Management 9 25 Professional/Technical 16 36 Sales/Marketing 11 21 Skilled Labor 12 57 Clerical/Administrative 15 24 Unskilled/Laborer 7 36 Other 6 21 74% 48% 46% 42% 38% 31% 30% 13% 7% 31% 4% 8% 4% 11% 9% 5% 13% 8% 13% 8% 27% 4% 12% 10% 18% 15% 18% 23% 2% 10% 8% 14% 2% 26% 18% 18% 24% 7% 0% 20% 40% 60% 80% 100% Other Sales/Marketing Unskilled/Laborer Management Skilled Labor Professional/Technical Clerical/Administrative Not applicable Less than 2 weeks 2 to 4 weeks 1 to 3 months 4 to 6 months More than 6 months TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 41 Despite the wide range of responses received, there were some commonalities. Sales and marketing occupations were mentioned most frequently named, followed closely by management positions, and occupations related to medical and healthcare and tourism/hospitality. The remaining occupations were a broad array, ranging from slot technologists to archaeology. Of the skills identified as difficult to find, IT and computer-related expertise were the most frequently reported. The next greatest area of concern was related to communication and customer service skills and basic employability. The remaining skills noted cut across a variety of industries from management to jewelers. BUSINESS VIEWS Almost 60 respondents rated business climate factors Figure 30 and provided information about the importance of those factors to their business Figure 29. Two of the business climate factors considered most important to respondents—government efficiency and effectiveness and cost of utilities—received the lowest ratings. For those two categories, almost 75 percent of participants considered the factors extremely important to their success, while over 80 percent (98 percent in the case of cost of utilities) rated the Territory’s performance on them as extremely poor. This trend of ranking the Territory poorly on important business climate factors is continued in the next four factors: cost of taxes; access to customers; ability to attract and retain staff; and cost of labor. Over 85 percent of respondents considered those items to be, at minimum, important, if not very or extremely important. Yet the Territory’s rating for those factors was perceived as average to below average (between 1.9 and 2.4 out of five). Forty-percent of respondents considered other business incentives (a category including loans, real estate rates, etc.) as very or extremely important, while more than one-half (55 percent) of respondents perceived performance on this factor to be below average or extremely poor. When asked to rate the Territory on each of the business climate factors, over three-quarters of respondents rated every factor between average and extremely poor. Along with cost of utilities and government performance, a number of key factors (rated over 4.0 out of five in terms of importance) were not well perceived. At least 60 percent of respondents found that access to customers, ability to attract and retain staff, cost of taxes, and other business incentives, were rated either extremely poor or below average. Over 80 percent of respondents rated transportation infrastructure as either extremely poor or below average, however views on the importance of that factor varied. One-quarter of respondents considered transportation infrastructure extremely important, and 18 percent considered it not important. Respondents were also provided with an opportunity to specify “other” replies. Additional factors, that were considered important, included visitors to the Territory with funds to spend, internet services, access to contracts, and reduced red tape. One additional area of concern was the need for duty-free exporting to the US. TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 42 FIGURE 29. IMPORTANCE OF GIVEN FACTORS TO THE SUCCESS OF BUSINESS Based on your experience, please rate the importance of the following factors to the success of your business on a scale of 1 to 5. Source: Online employer survey conducted by TIP Strategies, summer 2014. Ratings of perception represent a weighted average of the scale used by respondents to rate the Territory’s performance on each factor, where Extremely Poor = 1 and Excellent = 5. 2.7 1.9 1.8 2.3 2.7 2.2 1.9 2.1 1.3 2.6 2.5 2.3 1.9 2.4 2.1 1.1 1.3 0 3 Perception 51% 18% 18% 17% 16% 21% 15% 26% 19% 12% 23% 5% 16% 18% 23% 33% 16% 18% 25% 11% 20% 5% 13% 11% 11% 11% 7% 7% 24% 25% 9% 20% 14% 15% 19% 20% 28% 13% 16% 7% 21% 9% 7% 7% 20% 11% 15% 20% 18% 15% 13% 7% 21% 11% 25% 34% 19% 21% 12% 19% 20% 20% 25% 26% 29% 29% 31% 31% 33% 33% 40% 46% 48% 52% 56% 73% 74% 0% 20% 40% 60% 80% 100% Duty free exporting to the US mainland Presence of suppliers and partners Transportation infrastructure Cost of real estate Entrepreneur and small business support system Quality of higher education Programs to enhance skills of existing workforce Quality of K-12 schools Other business incentives Quality of life offerings Tax incentive programs Cost of labor Ability to attract and retain qualified employees Access to customers Cost of taxes Cost of utilities Government efficiency and effectiveness Not Important Somewhat Important Important Very Important Extremely Important out of five TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 43 FIGURE 30. PERCEPTION OF TERRITORY PERFORMANCE ON BUSINESS CLIMATE FACTORS Please rate the Territory on each of these business climate factors. Source: Online employer survey conducted by TIP Strategies, summer 2014. Ratings of importance represent a weighted average of the scale used by respondents to rate the importance of each factor, where Not Important = 1 and Extremely Important = 5. 4.1 3.6 3.0 4.0 3.1 2.3 3.3 4.2 3.1 3.1 3.1 2.3 4.2 4.6 3.0 4.6 4.5 0 3 6 Importance 16% 17% 23% 25% 29% 30% 33% 33% 34% 37% 37% 39% 42% 42% 48% 82% 98% 45% 32% 28% 30% 33% 7% 17% 45% 42% 48% 31% 26% 18% 23% 33% 15% 25% 34% 42% 39% 31% 41% 27% 22% 22% 13% 22% 30% 25% 29% 13% 14% 15% 8% 5% 20% 15% 6% 13% 6% 6% 8% 0% 20% 40% 60% 80% 100% Access to customers Quality of life offerings Cost of real estate Cost of labor Quality of higher education Duty free exporting to the US mainland Tax incentive programs Ability to attract and retain qualified employees Presence of suppliers and partners Programs to enhance skills of existing workforce Quality of K-12 schools Entrepreneur and small biz. support system Cost of taxes Other business incentives Transportation infrastructure Government efficiency and effectiveness Cost of utilities Extremely Poor Below Average Average Very Good Excellent out of five TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 44 Attitudes toward the Territory’s workforce were largely negative (Figure 31). For every category, more than 85 percent of respondents found the workforce either fair or poor, with no respondents finding any of the categories worthy of an excellent rating. Areas which received less negative ratings included trainability and teamwork, with 50 percent of firms ranking the workforce fair or good in these skills. Of the 57 firms that weighed in on the Territory’s training programs (Figure 32), only two respondents viewed the training offered by local providers as “sufficient.” Over 60 percent of firms perceived gaps in the available training. Of those, 14 firms indicated training gaps did not have a critical impact; while 21 firms viewed them has having a negative effect on operations. An additional 20 firms (35 percent) did not identify any critical training gaps because they conduct all training in-house or through vendors and suppliers, or their work requires little or no formal training. There is no way to know from this question, however, whether these in-house training and vendor relationships were established to address a perceived gap at some point in the past. FIGURE 31. PERCEPTIONS OF WORKFORCE Share of firms rating workers on indicated characteristics Source: Online employer survey conducted by TIP Strategies, summer 2014 FIGURE 32. AVAILABILITY OF WORKFORCE TRAINING PROGRAMS Source: Online employer survey conducted by TIP Strategies, summer 2014 79% 76% 75% 75% 70% 67% 67% 65% 63% 60% 50% 41% 17% 22% 19% 20% 28% 31% 27% 31% 29% 36% 48% 45% 4% 2% 6% 5% 2% 2% 5% 4% 8% 4% 2% 14% 0% 20% 40% 60% 80% 100% Math skills Communication skills Entry-­level skills Professionalism Adaptibility Job readiness Employee attitudes Productivity Computer skills Reliability Teamwork skills Trainability Poor Fair Good Excellent 4% 5% 30% 37% 25% Are there critical training programs lacking in the area? 0% 100% Yes, there are gaps in training available in the region but they do not have a critical impact on operations. Yes, there are critical gaps in training that negatively impact our operations. No, we conduct all training in-house or through existing supplier/vendor relationships. No, our work requires little or no formal training No, the training offered by regional providers is sufficient. TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 45 Respondents were provided with an opportunity to contribute additional thoughts regarding workforce training programs. Their responses are categorized in Figure 33. One of the most frequently mentioned concerns was basic skills, such as mathematics, computer skills, written skills, and reliability. Training and education gaps ranged from technical skills to jobs such as dive instructors, law enforcement, CDL drivers, and HAZMAT operators, to workforce preparedness training in high school. The final survey question asked respondents to provide additional thoughts that would be helpful to the planning processes efforts to strengthen and grow the Territory’s economy. A total of 27 respondents provided answers that were categorized in Figure 34. The most common area of concern was government policy, efficiency, and effectiveness and related comments largely referred to tax policy, corruption, regulation, leadership, and lack of interagency co-operation. While utility costs could fit under the infrastructure category, this topic was mentioned so frequently that it has been provided separately. The concern surrounding the costs of utilities is one example of participants repeating certain topics in their responses to multiple questions, including those covering business climate and workforce. Another example is the lack of basic job skills, job readiness, and general workforce and education concerns. In addition, the lack of direct flights and affordable airfares was mentioned by three respondents and categorized under transportation/infrastructure. FIGURE 33. OTHER THOUGHTS ON TRAINING Summary of comments by broad topic Source: Online employer survey conducted by TIP Strategies, summer 2014 FIGURE 34. GENERAL COMMENTS BY BROAD TOPIC ADDRESSED Please provide any additional thoughts that would be helpful in our efforts to strengthen and grow the US Virgin Islands economy. Source: Online employer survey conducted by TIP Strategies, summer 2014 1 1 1 1 2 2 4 4 7 8 9 Job gaps Customer attitude Technical expertise Management skills Ethics Prob. solving skills Customer service skills Technical skills Attitude Training/education gaps Basic skills 1 1 2 5 6 12 15 Tourism Taxes Law & safety Transportation/Infrastructure Utility costs Workforce quality/education/training Govt. policy, efficiency & effectiveness TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 46 FIGURE 35. DIFFICULT OCCUPATIONS TO RECRUIT Which occupations are difficult to recruit in your industry? [Responses shown as entered]  Account managers  IT  All  Line cooks  All!  Managers/management (4 responses)  Archaeologist  Marketing  Assist. GM  Medical billers  Athletic trainers  MIS  Attorneys  Organic farmer  Bartender  Paralegals  Bookkeeper  Physical therapist  Certified diesel mechanics  Physical therapists  Chefs  Professional  Clerical with the skills to run specific programs  Professionals  Community outreach specialist  Programmers  Community outreach specialists  Qualified administrative support  Competent accounting  Sales people  Computer literate  Sales people  Court watch coordinators  Sales/marketing  Dental hygienist  Sales/marketing  Dentist  Salesperson  Dive instructors  Senior management / executives  Engineers  Skilled drivers  Environmental technicians  Skilled labor  Excellent sales  Skilled professionals  Experienced administrative assistants  Slot technicians  Experienced livestock producer  Table games dealers  Farm manager  Technical  Financial analysts  Technical  Goldsmith  Technical sales  Health related  Training coordinators  House cleaning  Utility regulatory consulting expertise  Investment analysts  Veterinary technicians General comments included with responses to this question:  People with experience  It’s almost like culturally accepted to be not show up, quit  Those that need to travel away to be certified or trained in programs  The kind that will show up on time and not quit after first pay check TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 47 FIGURE 36. DIFFICULT SKILLS TO FIND Which skills are difficult to find in your industry? [Responses shown as entered]  A sense of Urgency  Accounting  Advanced computer programs  Analytics  Basic customer service!  Basic math skills  Cad drawing  Certified diesel mechanics  Clerical with the skills to run specific programs  Common sense  Communication  Computer  Computer skills all programs including outlook  Creative problem solving  Critical thinking / analytics  Customer service  Customer service  Being nice to customers  Engineering  Estimating  Experience with Microsoft Excel  Financial analyst  Generator service and repair  Good report writing skills and interviewing skills  Hard workers  Hazardous Materials and Hazardous Operations trained  Heavy Equipment or CDL drivers  Honest people  Insurance claims processing  It is difficult to find people who can demonstrate good and consistent customer service skills  IT programming, analysis  IT skills  Jewelers  Just be nice  Law degrees  Legal  Licensed and qualified customer service reps  Managerial TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 48 FIGURE 36. DIFFICULT SKILLS TO FIND Which skills are difficult to find in your industry? [Responses shown as entered]  Line cook  Mathematics  Motivation to excel  Motivation to get the work done  NOP adherence  Organizational development  Physical therapy  Problem solving  Professional acting  Professional conduct  Professional writing  Public speaking  Qualified social networkers  Real estate software  Scientist  Software skills  Spreadsheet analyst  Surgical assistants  Utility generation dispatch and production modeling software  Website designers  Work ethic  Write properly  Writing and communication  Written and verbal communication skills needed TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 49 APPENDIX B: LQ AND SHIFT-SHARE ANALYSIS To document the Territory’s existing industrial base, we conducted an analysis of USVI employment using data prepared by EMSI. An analysis of employment data helps to identify industries already present in the Territory that may represent an opportunity to attract suppliers and/or customers. In addition, an industry concentration may indicate that vital location factors for that industry exist in the region, making it attractive for additional companies in that sector. This section provides an overview of the two primary employment analyses conducted: location quotients and shift-share. A location quotient is calculated as a local industry’s share of total local employment divided by the same industry’s share of employment at the national level. If the local industry and national industry are perfectly proportional, the LQ will be 1.00. LQs greater than 1.25 are presumed to indicate a comparative advantage. Figure 37, page 50, shows the 39 industries employing 100 or more workers in 2013 with LQs of 1.10 or greater. Not surprisingly, the Territory is highly specialized in tourism-related industries, including retail, personal transportation, and attractions. Of the 39 industries, only one-third added jobs between 2008 and 2013, with many falling into these same categories. In addition to tourism-related activities, a number of industries with above-average LQs are population- driven. Examples include residential construction, department stores, and grocery stores. Industries that are independent of these forces and represent potential targets beyond tourism include manufacturing (petroleum products, beverages), telecommunications, and financial services. Industry sectors were also assessed for their overall performance and growth potential using a shift-share analysis. Shift-share is a comparative tool used to measure changes in the structure of a local economy against the US economy, or to broad changes in an industry at the national level. This statistical technique identifies the source of changes in a given industry in the local economy by allocating shifts in employment among three components: national, industry mix, and regional competitive share:  The national share looks at the change in local employment resulting from growth or decline in the parent economy. If the local industry in question had grown at exactly the same rate as the national economy, how many jobs would have been added?  The industry mix share shows the degree of change within a local industry resulting from changes in the same industry on a national basis. How did the industry’s national growth rate differ from the overall US economic growth rate? The difference between the two is attributed to the industry’s relative performance on a national scale.  The regional competitive share measures the extent to which the unique economic circumstances of a locale contribute to employment growth or decline in a specific industry. How did the industry’s local growth rate differ from its national growth rate? The difference between the two is attributed to local or regional factors. Factors can include a range of issues, such as the availability of natural resources or other materials, the quality of the local workforce, business climate issues, cost considerations, or infrastructure. Results of the analysis are highlighted in Figure 38 (page 51) and Figure 39 (page 52). TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 50 FIGURE 37. LOCATION QUOTIENT (LQ) ANALYAIS: MOST CONCENTRATED INDUSTRIES Based on analysis of industries at the 4-digit level with LQs of 1.10 or greater and 100 or more jobs in 2013 Source: EMSI Covered Employment 2014.1; TIP Strategies Note: Analysis was conducted on all industries (4-digit NAICS level) with 100 or more jobs in 2013. Results exclude public sector (government) and private household employment. NAICS Code Description 2013 Jobs Chg. from 2008 2013 LQs (US = 1.00) 2013 Avg. Earnings Per Job 2013 Est. 4483 Jewelry, Luggage, and Leather Goods Stores 959  25.46 $35,925 134 4831 Deep Sea, Coastal, and Great Lakes Water Transportation 229  21.14 $43,373 16 7211 Traveler Accommodation 3,411  6.95 $31,639 52 8113 Comm./Ind. Mach. & Equip. Repair & Maint. (exc. Auto/Electronic) 344  6.47 $46,354 24 7132 Gambling Industries 233  6.23 $25,230 6 3241 Petroleum and Coal Products Manufacturing 178  5.73 $243,144 2 7121 Museums, Historical Sites, and Similar Institutions 190  4.93 $19,923 12 3121 Beverage Manufacturing 230  4.60 $56,306 13 5321 Automotive Equipment Rental and Leasing 209  4.17 $30,704 30 4247 Petroleum and Petroleum Products Merchant Wholesalers 110  4.14 $194,529 6 4881 Support Activities for Air Transportation 172  3.79 $18,695 7 5171 Wired Telecommunications Carriers 556  3.44 $60,187 10 4532 Office Supplies, Stationery, and Gift Stores 283  3.43 $23,578 38 3273 Cement and Concrete Product Manufacturing 156  3.30 $50,577 6 5616 Investigation and Security Services 710  3.03 $15,965 30 6111 Elementary and Secondary Schools (Private) 773  2.90 $27,417 35 5311 Lessors of Real Estate 438  2.69 $44,925 79 4248 Beer, Wine, and Distilled Alcoholic Beverage Wholesalers 132  2.66 $39,179 10 8139 Business, Professional, Labor, Political, and Similar Orgs. 312  2.65 $28,020 61 5322 Consumer Goods Rental 113  2.46 $24,321 17 2361 Residential Building Construction 419  2.42 $34,335 92 4811 Scheduled Air Transportation 278  2.41 $32,906 15 4521 Department Stores 893  2.09 $15,227 6 4441 Building Material and Supplies Dealers 593  2.02 $26,645 40 2362 Nonresidential Building Construction 385  2.00 $38,593 35 4482 Shoe Stores 104  1.96 $13,583 18 7224 Drinking Places (Alcoholic Beverages) 174  1.75 $19,405 22 4451 Grocery Stores 1,181  1.66 $18,957 49 2373 Highway, Street, and Bridge Construction 137  1.65 $41,761 7 5313 Activities Related to Real Estate 268  1.59 $28,663 51 4244 Grocery and Related Product Merchant Wholesalers 304  1.51 $37,943 23 5221 Depository Credit Intermediation 691  1.46 $42,066 40 4481 Clothing Stores 422  1.45 $16,358 92 8123 Drycleaning and Laundry Services 115  1.38 $16,289 31 4413 Automotive Parts, Accessories, and Tire Stores 199  1.37 $27,482 22 4842 Specialized Freight Trucking 160  1.34 $28,093 34 5411 Legal Services 406  1.30 $58,391 106 4461 Health and Personal Care Stores 340  1.20 $25,239 49 7139 Other Amusement and Recreation Industries 363  1.14 $24,891 40 TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 51 The idea of shift-share analysis is simply that if local industry growth exceeds that of its peers around the country, it is likely some competitive advantage is being reflected. If it lags, there is likely a negative pattern. A negative regional competitive share would indicate the local industry has not kept pace with growth in the industry at the macro level. For example, Wired Telecommunications Carriers (NAICS 5171) is among the top industries in terms of the number of jobs added on the strength of local or regional factors from 2010 to 2013, with a competitive effect of 48 jobs. This figure represents the culmination of the shift-share analysis which can be described as follows:  If employment in this industry had grown at the same pace as the national economy, 23 jobs would have been added in the industry since 2010.  If employment in the industry had followed national industry patterns, 36 jobs would have been lost during this period. FIGURE 38. SHIFT-SHARE ANALYSIS: MOST COMPETITVE INDUSTRIES, 2010-2013 Based on analysis of industries at the 4-digit level with 25 or more jobs in 2013 Source: EMSI Covered Employment 2014.1; TIP Strategies Note: Analysis was conducted on all industries (4-digit NAICS level) with 10 or more jobs in 2013. Results exclude public sector (government) and private household employment. NAICS Code Description Actual change National share Industry mix Expected change Regional competitve share 4521 Department Stores 117 34 -14 20 97 7121 Museums, Historical Sites, and Similar Institutions 81 5 5 10 71 4247 Petroleum and Petroleum Products Merchant Wholesalers 69 2 -1 1 68 4441 Building Material and Supplies Dealers 90 22 1 23 67 5171 Wired Telecommunications Carriers 35 23 -36 -13 48 6211 Offices of Physicians 61 17 2 19 42 5611 Office Administrative Services 46 4 4 8 38 7224 Drinking Places (Alcoholic Beverages) 39 6 0 6 33 3121 Beverage Manufacturing 46 8 7 15 31 4481 Clothing Stores 25 18 -23 -6 31 5313 Activities Related to Real Estate 51 10 12 21 30 6233 Community Care Facilities for the Elderly 37 6 7 13 24 5322 Consumer Goods Rental 9 5 -20 -15 24 5223 Activities Related to Credit Intermediation 24 0 0 0 24 5415 Computer Systems Design and Related Services 31 2 6 8 23 6213 Offices of Other Health Practitioners 27 3 3 6 21 4872 Scenic and Sightseeing Transportation, Water 14 3 -5 -2 16 5172 Wireless Telecommunications Carriers (except Satellite) 11 2 -6 -3 14 5619 Other Support Services 13 1 0 1 12 3273 Cement and Concrete Product Manufacturing 12 6 -6 1 11 4881 Support Activities for Air Transportation 20 7 2 9 11 4239 Miscellaneous Durable Goods Merchant Wholesalers 12 1 1 1 11 4452 Specialty Food Stores 15 3 2 4 11 TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 52  Therefore the “expected change,” based on industry trends and overall growth of the national economy, would have been a loss of 13 jobs. Yet, in the USVI, an estimated 35 jobs were added in the Wired Telecommunications Industry during the period analyzed. This translates to a competitive effect of 48 jobs (the number that would be required to offset the expected loss of 13 jobs and arrive at the actual change of 35). A high competitive share suggests a comparative advantage in a given industry. Figure 38 shows the industries with the largest competitive effect. Figure 39 shows those where the regional competitive share was negative, suggesting that local factors may be contributing to job losses in the industry. FIGURE 39. SHIFT-SHARE ANALYSIS: LEAST COMPETITVE INDUSTRIES, 2010-2013 Based on analysis of industries at the 4-digit level with 25 or more jobs in 2013 Source: EMSI Covered Employment 2014.1; TIP Strategies Note: Analysis was conducted on all industries (4-digit NAICS level) with 10 or more jobs in 2013. Results exclude public sector (government) and private household employment. NAICS Code Description Actual change National share Industry mix Expected change Regional competitve share 3241 Petroleum and Coal Products Manufacturing -1,219 62 -48 14 -1,233 8113 Commercial and Industrial Machinery and Equipment (excep -1,007 60 85 145 -1,152 7211 Traveler Accommodation -93 156 25 181 -274 7221 Full-Service Restaurants -74 63 62 125 -199 6111 Elementary and Secondary Schools (Private) -124 40 20 60 -184 5613 Employment Services -38 16 69 85 -123 7222 Limited-Service Eating Places -5 48 69 117 -122 5616 Investigation and Security Services -54 34 32 66 -120 2381 Foundation, Structure, and Building Exterior Contractors -105 11 -6 5 -110 2383 Building Finishing Contractors -96 6 -3 3 -99 2373 Highway, Street, and Bridge Construction -86 10 -8 2 -88 2361 Residential Building Construction -68 22 -4 18 -86 5311 Lessors of Real Estate -79 23 -18 5 -84 4483 Jewelry, Luggage, and Leather Goods Stores -52 45 -13 32 -84 7139 Other Amusement and Recreation Industries -49 18 6 24 -73 5617 Services to Buildings and Dwellings -34 21 16 38 -72 7223 Special Food Services -53 7 12 19 -72 4411 Automobile Dealers -43 10 15 25 -68 4842 Specialized Freight Trucking -41 9 17 26 -67 6214 Outpatient Care Centers -39 6 14 20 -59 6241 Individual and Family Services -30 8 13 21 -51 2362 Nonresidential Building Construction -39 19 -7 12 -51 4831 Deep Sea, Coastal, and Great Lakes Water Transportation -37 12 1 13 -50 4471 Gasoline Stations -37 7 2 9 -46 5413 Architectural, Engineering, and Related Services -34 9 3 12 -46 TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 53 APPENDIX C: US EMPLOYMENT TRENDS FIGURE 40. FASTEST-GROWING US INDUSTRIES, 2013 Ranked by net numeric change, 2008 to 2013 Source: EMSI Covered Employment 2014.1; TIP Strategies (%) 7222 Limited-Service Eating Places 4,446,826 +329,608 8% 7221 Full-Service Restaurants 4,861,541 +310,508 7% 6216 Home Health Care Services 1,260,270 +302,359 32% 5613 Employment Services 3,364,753 +265,729 9% 6241 Individual and Family Services 1,473,301 +262,072 22% 5415 Computer Systems Design and Related Services 1,705,917 +220,825 15% 6113 Colleges, Universities, and Prof. Schools (Private) 1,860,668 +207,597 13% 6211 Offices of Physicians 2,435,934 +181,404 8% 4529 Other General Merchandise Stores 1,655,814 +173,912 12% 5416 Mgmt., Scientific, and Technical Consulting Services 1,206,836 +165,877 16% 6214 Outpatient Care Centers 686,834 +155,884 29% 5511 Management of Companies and Enterprises 2,039,655 +144,238 8% 6221 General Medical and Surgical Hospitals (Private) 4,432,401 +137,814 3% 6233 Community Care Facilities for the Elderly 808,617 +125,802 18% 6213 Offices of Other Health Practitioners 736,627 +111,714 18% 5242 Agencies, Brokerages, and Other Insurance Related 1,120,294 +105,647 10% 9026 Education and Hospitals (State Government) 2,900,975 +88,074 3% 2131 Support Activities for Mining 413,990 +83,822 25% 6111 Elementary and Secondary Schools (Private) 961,592 +70,362 8% 4451 Grocery Stores 2,565,747 +64,192 3% 7223 Special Food Services 596,734 +56,652 10% 5313 Activities Related to Real Estate 609,721 +50,846 9% 4251 Wholesale Electronic Markets and Agents and Brokers 898,962 +49,397 6% 6232 Residential Mental Health/Substance Abuse Facilities 591,436 +48,544 9% 5191 Other Information Services 183,877 +48,342 36% 6116 Other Schools and Instruction (Private) 341,757 +47,557 16% 4511 Sporting Goods, Hobby, and Musical Instrument Stores 519,051 +45,104 10% 6212 Offices of Dentists 858,840 +42,202 5% 5611 Office Administrative Services 446,163 +42,084 10% 4541 Electronic Shopping and Mail-Order Houses 287,306 +39,343 16% 2111 Oil and Gas Extraction 198,287 +38,207 24% 5616 Investigation and Security Services 844,751 +37,066 5% 5617 Services to Buildings and Dwellings 1,866,683 +36,460 2% 1151 Support Activities for Crop Production 429,686 +36,306 9% 9011 Federal Government, Civilian 2,865,541 +35,586 1% 4413 Automotive Parts, Accessories, and Tire Stores 523,402 +34,248 7% 6231 Nursing Care Facilities 1,649,570 +32,914 2% 4533 Used Merchandise Stores 150,532 +31,774 27% 6219 Other Ambulatory Health Care Services 269,818 +30,711 13% 5112 Software Publishers 290,928 +29,276 11% 5239 Other Financial Investment Activities 376,901 +29,139 8% 6223 Private Specialty Hospitals (except Psych./Substance Abuse) 213,224 +28,474 15% 8129 Other Personal Services 265,981 +27,389 11% 5614 Business Support Services 854,576 +25,970 3% 6215 Medical and Diagnostic Laboratories 240,547 +25,219 12% NAICS Code Description 2013 Jobs (#) Net Change in Jobs from 2008 TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 54 FIGURE 41. FASTEST-GROWING US INDUSTRIES, 2013 Ranked by percentage change, 2008 to 2013 Source: EMSI Covered Employment 2014.1; TIP Strategies (#) 5191 Other Information Services 183,877 +48,342 35.7% 6216 Home Health Care Services 1,260,270 +302,359 31.6% 6214 Outpatient Care Centers 686,834 +155,884 29.4% 4911 Postal Service (Private Sector) 5,276 +1,144 27.7% 4533 Used Merchandise Stores 150,532 +31,774 26.8% 4859 Other Transit and Ground Passenger Transportation 91,628 +18,774 25.8% 2131 Support Activities for Mining 413,990 +83,822 25.4% 6117 Educational Support Services (Private) 116,728 +22,530 23.9% 2111 Oil and Gas Extraction 198,287 +38,207 23.9% 6241 Individual and Family Services 1,473,301 +262,072 21.6% 4861 Pipeline Transportation of Crude Oil 10,037 +1,668 19.9% 6233 Community Care Facilities for the Elderly 808,617 +125,802 18.4% 6213 Offices of Other Health Practitioners 736,627 +111,714 17.9% 7113 Promoters of Performing Arts, Sports, and Similar Events 104,744 +15,270 17.1% 6116 Other Schools and Instruction (Private) 341,757 +47,557 16.2% 5416 Management, Scientific, and Technical Consulting Services 1,206,836 +165,877 15.9% 4541 Electronic Shopping and Mail-Order Houses 287,306 +39,343 15.9% 6223 Private Specialty Hospitals (except Psych./Substance Abuse) 213,224 +28,474 15.4% 5415 Computer Systems Design and Related Services 1,705,917 +220,825 14.9% 7213 Rooming and Boarding Houses 11,871 +1,464 14.1% 7131 Amusement Parks and Arcades 190,245 +23,082 13.8% 6219 Other Ambulatory Health Care Services 269,818 +30,711 12.8% 6113 Colleges, Universities, and Professional Schools (Private) 1,860,668 +207,597 12.6% 4529 Other General Merchandise Stores 1,655,814 +173,912 11.7% 6215 Medical and Diagnostic Laboratories 240,547 +25,219 11.7% 8129 Other Personal Services 265,981 +27,389 11.5% 4882 Support Activities for Rail Transportation 27,128 +2,761 11.3% 5112 Software Publishers 290,928 +29,276 11.2% 2122 Metal Ore Mining 44,574 +4,418 11.0% 4248 Beer, Wine, and Distilled Alcoholic Beverage Wholesalers 179,102 +17,206 10.6% 7223 Special Food Services 596,734 +56,652 10.5% 5611 Office Administrative Services 446,163 +42,084 10.4% 5242 Agencies, Brokerages, and Other Insurance Related 1,120,294 +105,647 10.4% 6112 Junior Colleges (Private) 83,007 +7,322 9.7% 4922 Local Messengers and Local Delivery 50,914 +4,475 9.6% 4511 Sporting Goods, Hobby, and Musical Instrument Stores 519,051 +45,104 9.5% 1151 Support Activities for Crop Production 429,686 +36,306 9.2% 2121 Coal Mining 88,475 +7,380 9.1% 5313 Activities Related to Real Estate 609,721 +50,846 9.1% 6232 Residential Mental Health/Substance Abuse Facilities 591,436 +48,544 8.9% 1132 Forest Nurseries and Gathering of Forest Products 2,704 +218 8.8% 3119 Other Food Manufacturing 177,094 +14,203 8.7% 5621 Waste Collection 150,322 +11,934 8.6% 5613 Employment Services 3,364,753 +265,729 8.6% 5239 Other Financial Investment Activities 376,901 +29,139 8.4% NAICS Code Description 2013 Jobs (%) Net Change in Jobs from 2008 TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 55 APPENDIX D: ADDITIONAL UNDERSEA CABLES The following information was obtained using the Submarine Cable Map (http://www.submarinecablemap.com/) Data are compiled by TeleGeography from their Global Bandwidth Research Service and updated on a regular basis. The seven cable systems with USVI landing points identified by TeleGeography are listed below in order of their “ready-for-service” date (newest to oldest). PERSEID Ready-for-Service: Q2 2016 Cable Length: 115 km Owners: LinkBermuda URL: http://www.linkbermuda.com/ Landing Points St. Croix, Virgin Islands, United States Tortola, Virgin Islands (U.K.) ST. THOMAS-ST. CROIX SYSTEM Ready-for-Service: July 2013 Cable Length: 183 km Owners: Virgin Islands Next Generation Networks, Inc. URL: http://www.vingn.com Landing Points Banana Bay, VI, United States Brewer's Bay, VI, United States Christiansted, VI, United States Flamingo Bay, VI, United States Frederiksted, VI, United States Great Bay, VI, United States Vila Olga, VI, United States TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 56 GLOBAL CARIBBEAN NETWORK (GCN) Ready-for-Service: Sept. 2006 Cable Length: 3,068 km Owners: Leucadia National Corporation, Loret Group URL: http://www.globalcaribbean.net Landing Points Baillif, Guadeloupe Basseterre, Saint Kitts and Nevis Canefield, Dominica Chaguaramas, Trinidad and Tobago Jarry, Guadeloupe Kingstown, Saint Vincent and the Grenadines Le Lamentin, Martinique Needham’s Point, Barbados Rodney Bay, Saint Lucia Saint Barthelemy, Guadeloupe Saint Martin, Guadeloupe San Juan, Puerto Rico, United States St. Croix, Virgin Islands, United States St. George’s, Grenada St. John’s, Antigua and Barbuda SOUTH AMERICAN CROSSING (SAC)/LATIN AMERICAN NAUTILUS (LAN) Ready-for-Service: September 2000 Cable Length: 20,000 km Owners: Level 3 URL: http://www.level3.com Notes: Level 3 owns three fiber pairs on the systems, which it calls South American Crossing. Telecom Italia owns one fiber that it refers to as Latin American Nautilus. Only Level 3 has capacity on the branch to Colombia. Landing Points Buenaventura, Colombia Colón, Panama Fort Amador, Panama Fortaleza, Brazil Las Toninas, Argentina Lurin, Peru Puerto Viejo, Venezuela Rio de Janeiro, Brazil Santos, Brazil St. Croix, Virgin Islands, United States Valparaíso, Chile TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 57 AMERICAS-II Ready-for-Service: August 2000 Cable Length: 8,373 km Owners: Embratel, AT&T, Verizon, Sprint, CANTV, Tata Communications, Level 3, Centennial of Puerto Rico, Corporacion Nacional de Telecommunicaciones, Telecom Argentina, Orange, Portugal Telecom, Cable & Wireless Communications, Columbus Networks, Telecom Italia Sparkle URL: n.a. Landing Points Camuri, Venezuela Cayenne, French Guiana Fortaleza, Brazil Hollywood, Florida, United States Le Lamentin, Martinique Miramar, Puerto Rico, United States Port of Spain, Trinidad and Tobago St. Croix, Virgin Islands, United States Willemstad, Curaçao MID-ATLANTIC CROSSING (MAC) Ready-for-Service: June 2000 Cable Length: 7,500 km Owners: Level 3 URL: http://www.level3.com Landing Points Brookhaven, New York, United States Hollywood, Florida, United States St. Croix, Virgin Islands, United States TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 58 PAN AMERICAN (PAN-AM) Ready-for-Service: February 1999 Cable Length: 7,050 km Owners: AT&T, Telefonica del Peru, Softbank Telecom, Telecom Italia Sparkle, Sprint, CANTV, Tata Communications, Telefónica de Argentina, Telstra, Verizon, Telecom Argentina, Telconet, Cable & Wireless Communications, Corporacion Nacional de Telecommunicaciones, Columbus Networks URL: n.a. Landing Points Arica, Chile Baby Beach, Aruba Barranquilla, Colombia Colón, Panama Lurin, Peru Panama City, Panama Punta Carnero, Ecuador Punto Fijo, Venezuela St. Croix, Virgin Islands, United States St. Thomas, Virgin Islands, United States TARGETED COMPETITIVE INDUSTRY STUDY US VIRGIN ISLANDS THEORY INTO PRACTICE PAGE | 59 NOTES 1 Our work in the Economic Profile draws on a variety of resources made available by the USVI Bureau of Economic Research (“BER”). BER publications reviewed include monthly economic indicators and periodic Economic Conditions briefs, as well as a two-part report on the creation of a living wage ordinance in the USVI. In particular, the BER’s 2010 report, entitled The Self-Sufficiency Standard for the U.S. Virgin Islands, provided an understanding of poverty levels in the Territory relative to cost of living. In addition to these BER-produced publications, we relied on information and data presented in The Economic Impact of the US Virgin Islands Economic Development Commission Program (February 5, 2013), a report compiled by IHS, Inc. and in two publications prepared by the Virgin Islands Economic Development Authority: the organization’s 2008 Marketing Plan and FY 2013 Annual Report. 2 Unless otherwise indicated, employment data used in this study were prepared by Economic Modeling Specialists Inc. (“EMSI”). EMSI integrates economic, labor market, demographic, and education data from more than 90 government and private-sector sources to create historic and projected estimates of employment by industry and occupation. The company uses proprietary methods to 1) update government employment data based on other more timely economic indicators; 2) estimate suppressed data; and 3) connect industry data to occupations. 3 Time series data are typically indexed to a particular point in an economic cycle (e.g., the peak or trough). In this case, employment figures were indexed to 2001—the first year for which EMSI data are available—in order to provide the longest time horizon possible. 4 IHS, The Economic Impact of the US Virgin Islands Economic Development Commission Program (February 5, 2013) page 31: “Overall, the federal policy has created doubts for many of those operating as EDC businesses about whether they will continue to operate in the USVI. Between 2004 and 2009, 36 companies cited the Jobs Act as the primary reason for terminating or suspending operations in the USVI,34 more than 35% of the number of EDC certificates that were activated during that same period.35 Another 22 companies, or one out of five approved during this period declined to commence activities in the USVI subsequently and let their EDC operating certificate expire.36 Of these expiries, 14 firms let benefits expire between 2004 and 2011, though it is not clear why.37 The lower numbers of expiries in recent years may actually have more to do with the smaller number of applicants the EDC program has received since 2004. Further, the uncertainty of federal tax policy makes business planning difficult—both with US legislative changes and IRS tests.” Referenced footnotes from IHS report: 34 Closeout Beneficiaries 093011 from EDC. 35 According EDC’s Application Stats 2001-12, 101 companies activated their EDC certificate during the period 2004- 2009. 36 Closeout Beneficiaries 093011 from EDC and Application Stats 2001-2012. 37 Closeout Beneficiaries 093011 from EDC 5 US Bureau of Economic Analysis, The Bureau of Economic Analysis (BEA) releases 2013 estimates of gross domestic product for the U.S. Virgin Islands (BEA 14-38), August 19, 2014, press release. http://www.bea.gov/newsreleases/general/terr/2014/VIGDP_081914.pdf 6 St. Croix Source, “WAPA Switch to Propane Will Improve the USVI Economy,” March 28, 2014 http://stcroixsource.com/content/commentary/op-ed/2014/03/28/wapa-switch-propane-will-improve-usvi- economy