SUMMARY BACKGROUND

Summary description of the current economic development situation of the Southern Tier West region of New York State (Chautauqua, Cattaraugus, and Allegany Counties), comprised of the northern-most counties in the federally designated Appalachia region. The region’s economic situation is consistent with this designation.

Emerging or Declining Clusters / Industry Sectors

The region has been undergoing a transformation from an economy featuring many high-skill, high-wage unionized jobs to an economy that features an increasing number of relatively low-skill, low-wage service and commercial employment, often part-time in nature and offering few benefits, such as health insurance and retirement benefits. The region’s manufacturing sector is experiencing an ongoing employment decline. There has been significant outsourcing of manufacturing production and jobs both domestically and overseas. Since manufacturing is a primary value-added sector, with regional exports bringing new wealth into the region, a decline in this sector erodes the region’s standard of living. The growing services and trade sector
often features jobs are part time or seasonal jobs with no benefits, eroding incomes. Further, much of the region’s services and trade sector does not involve regional export activity, and thus does not bring new wealth into the region.

The region’s most significant industry clusters are machinery manufacturing; fabricated metal product manufacturing; glass and ceramics; agribusiness, food processing and technology; and forest and wood products. The counties also consider the tourism sector to be a significant economic cluster. These industry clusters represent very significant competitive advantage assets (i.e., target clusters) for economic development.

The region’s most significant occupation clusters are agribusiness and food technology; primary/secondary and vocational education, remediation and social services; postsecondary education; public safety and domestic security’ personal services occupations, skilled production workers, and health care. The region should develop strategic initiatives to improve the regional workforce’s knowledge and technology skills, and also develop initiatives that focus on occupational cluster strengths, particularly where there are strong industry clusters as well.

A cluster-based economic development strategy would direct resources to the vertically and horizontally integrated cluster, building networks, strengthening individual firms and supply chains, and improving the cluster-specific labor force. The approach should include developing communication and consensus between industry cluster members, the economic development community, and the educational and job training community; the facilitation of technology adoption and improvements by the cluster; and the enhancement of labor force skills.

It is to our region’s advantage to identify sources of extra-regional supply chain leakages and attempt to promote fulfillment of supply chains from internal regional sources, to the extent possible. The greatest impact will result from working with regionally significant industry clusters.