# Industry Competitiveness Score  (Revealed Comparative Advantage, RCA)

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<summary>Definition</summary>

The Industry Competitiveness Score evaluates a region’s competitive strength in specific industries compared to global benchmarks. A high score means a region has a strong advantage in certain sectors, making it well-positioned for international trade and investment. Understanding industry competitiveness helps identify high-value industries, target economic development efforts, and enhance strategic growth initiatives.

Compared to the other Economic Strategy KPIs, RCA focuses on global positioning—revealing how well a region’s industries perform on the international stage relative to others.

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<summary>Navigation</summary>

The main map displays anonymized businesses as geolocated nodes, color-coded by sector. In the Industry Competitiveness Score module, color intensity reflects each sector’s global advantage:

* Blue = High RCA (strong comparative advantage)
* Red = Low RCA (weak or no advantage)

Selecting a business or sector on the map reveals its 6-digit NAICS classification, RCA score, and filters the sidebar visualizations by the city it is located in:

1. Competitiveness Treemap – Shows the relative size of industries and their RCA values.
2. Competitiveness Positioning Chart (Growth Readiness vs. Competitiveness) – Plots sectors using Industry Growth Readiness (PDI, x-axis) and Industry Competitiveness (RCA, y-axis) to identify strategic positioning.
   1. Top-right (Q1): Thriving sectors – complex and well-integrated
   2. Bottom-right (Q2): Traditional sectors – embedded but less complex
   3. Top-left (Q3): Emerging sectors – complex but less established
   4. Bottom-left (Q4): At-risk sectors – low complexity and low integration
3. Competitiveness Network Map – Visualizes how globally competitive sectors are distributed spatially across the region.

All three visualizations are synchronized with the map, enabling users to explore sectoral advantage across both spatial and strategic dimensions.

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<summary>Methodology</summary>

RCA is calculated by comparing the share of a given industry in the region’s economy to its share globally. If a region’s share exceeds the global average, it is considered to have a revealed comparative advantage in that industry.

* Data Aggregation – Gather exports or industry output data for the region and for the global economy.
* Relative Share Calculation – Determine how much weight each industry has in the local and global economy.
* Ratio Comparison – Compare the local share of each industry to the global share.
* Thresholding – RCA > 1 indicates a comparative advantage. RCA < 1 indicates a disadvantage.

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<summary>Calculation</summary>

$$RCA\_{cp} = \frac{ \frac{X\_{cp}}{\sum\limits\_c X\_{cp}} }{ \frac{ \sum\limits\_c X\_{cp} }{ \sum\limits\_c \sum\limits\_p X\_{cp} } }$$

Where:

* $$X\_{cp}$$ = Exports (or industry value) of product p in region c
* Numerator = Share of product p in region c’s economy
* Denominator = Share of product p in the global economy

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<summary>Interpretation</summary>

High RCA scores (RCA > 1) indicate:

* &#x20;Industries where the region is outperforming global averages
* Strong potential for export-led growth and foreign investment
* Areas of global relevance and local specialization

Low RCA scores (RCA < 1) indicate:

* Industries where the region is underrepresented
* Potentially untapped markets—or sectors where competition is stronger elsewhere
* Strategic caution zones for resource allocation

This KPI is most powerful when used in combination with PCI (specialization) and PDI (growth readiness), helping to identify not just where a region is strong—but where it has global positioning and strategic opportunity.

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