Great businesses always need great business support. Consultants, agencies, legal and accounting support are needed throughout the business cycle, especially expansion.
Want business success? Locate somewhere you can find good help quickly and easily.
Business services, which includes consulting, legal and accounting, is pretty common in every community, but some communities have a higher density of this sort of support. Higher density means more selection when outsourcing work.
How do you find a strong business services cluster?
Site selectors use something called location quotient (LQ). In really simple terms, LQ compares an industry’s share of employment in an individual community with the national average. We’ve taken LQ measurements of North America’s top business services communities to figure out a) whether there are any surprises and b) which ecosystems have the strongest clusters.
This article is part of a series that looks at the highest-density clusters in North America. This series will include entries on technology, advanced manufacturing, finance and insurance, food and beverage, creative industries and life sciences.
Here are North America’s top large and mid-sized business services clusters:
What are you seeing?
If the circle is green, it’s a “true” cluster. If it’s red, then a cluster effect isn’t evident. The circle size is representative of total cluster employment – the bigger the circle, the more employees. As you can see, a community can have high employment in a particular industry but NOT be a cluster.
Who sticks out for business services concentration?
Just about everyone. Like we said, business services are found in every community. In larger communities, like the ones on this map, you’re going to find a critical mass just about everywhere. If anything, it’s the few red circles – Columbus, Cleveland and Indianapolis – that stick out, but they are all *almost* business services clusters. Normally, we zoom in to show the Toronto-Waterloo Corridor, but it’s also all green.
So, without further ado, let’s look at the strongest large and mid-sized business clusters. Generally speaking, an LQ score greater than 1 is good and less than 1 is bad.
Here are the top 5 large business services clusters in North America – defined as high LQ communities with total cluster employment over 100,000:
- Toronto – LQ = 3.188 – Total Cluster Employment: 252,810
- Washington – LQ = 2.690 – Total Cluster Employment: 478,214
- Montreal – LQ = 2.600 – Total Cluster Employment: 140,745
- San Jose – LQ = 2.380 – Total Cluster Employment: 146,159
- San Francisco – LQ = 2.089 – Total Cluster Employment: 279,998
Here are the top 5 mid-size business services clusters in North America – defined as high LQ communities with total cluster employment under 100,000:
- Calgary – LQ = 3.077 – Total Cluster Employment: 62,915
- Vancouver – LQ = 2.925 – Total Cluster Employment: 97,155
- Ottawa-Gatineau – LQ = 2.501 – Total Cluster Employment: 46,005
- Waterloo – LQ = 2.289 – Total Cluster Employment: 16,995
- Quebec City – LQ = 2.156 – Total Cluster Employment: 24,265
Toronto comes out on top for large communities, which makes sense given Canada’s centralization of clusters in a small handful of cities – we’ve seen that in tech and manufacturing, too – and its role as Canada’s business powerhouse. Washington in second is surprising until you remember that it’s the seat of government, which usually supports a large cohort of consultants and contractors.
For smaller communities, we once again see Canadian cities sweep the board. Calgary, with its substantial engineering consulting for the oil industry, is number one. Canada’s capital comes in at number three, and Waterloo is fourth on the list. American communities didn’t make this list based on location quotient but many, including Denver, Portland, Austin and Charlotte had true clusters with larger cluster workforces, they just lacked the level of concentration found in Canada.
Waterloo EDC has comparative LQ data for communities across North America for multiple industries, including technology, advanced manufacturing, life sciences and more. Contact our team today – we’re happy to help your company make an informed expansion decision.