# USA Industrial Opportunity Zones ## Tract-level industrial fit, growth, and shortlist results for OZ 1.0 and OZ 2.0 Draft status: working report source Project page: `/research/projects/usa-industrial-oz` --- ## Executive summary This report presents the first results from the USA Industrial Opportunity Zones workflow. The goal is to find the tracts where three conditions already line up: - small and medium manufacturing firm presence - tract-level manufacturing workforce concentration - Opportunity Zone geography Those conditions do not guarantee local success. They do identify tracts that are stronger candidates for industrial follow-up than the national field as a whole. Topline findings: - National 2022 manufacturing SMEs: `242,883` - Estimated manufacturing SMEs in OZ 1.0 tracts: `48,881` - Estimated manufacturing SMEs in OZ 2.0-eligible tracts: `65,563` These are modeled tract estimates built from observed county business totals plus tract manufacturing employment weights. Use them as screening numbers and shortlist inputs, not as direct tract-observed firm counts. --- ## 1. What this report answers This report answers three questions: 1. How large is the manufacturing SME footprint inside OZ 1.0 and OZ 2.0-eligible tracts? 2. Which OZ 1.0 tracts show the strongest recent growth signal? 3. Which OZ 2.0 tracts look most promising for deeper local review? --- ## 2. Definitions and scope The terms in this report are used in a specific way. ### SME For this project: - `SME = firms with fewer than 500 employees` That corresponds to these SUSB size bands: - `<20 employees` - `20-99 employees` - `100-499 employees` ### Manufacturing Manufacturing uses: - `NAICS 31-33` ### OZ 1.0 and OZ 2.0 - `OZ 1.0` means the existing designated Opportunity Zone tract set - `OZ 2.0` means the newer eligible or upcoming tract set used in this screening workflow ### Observed versus estimated values The method distinguishes between: - **observed values**: county business totals from SUSB - **estimated values**: tract-level manufacturing SME counts derived from weighted allocation County SUSB totals remain the anchor truth. The tract values are derived so that tract-scale Opportunity Zone geography can be analyzed without pretending the original firm counts were observed at that geography. --- ## 3. Topline results The current national result set is: | Measure | Estimated firms | |---|---:| | National 2022 manufacturing SMEs | 242,883 | | Manufacturing SMEs in OZ 1.0 tracts | 48,881 | | Manufacturing SMEs in OZ 2.0-eligible tracts | 65,563 | These totals show the size of the candidate field. The more useful result is the tract shortlist built on top of them. --- ## 4. OZ 1.0 growth results The OZ 1.0 side of the workflow is built to find tracts where a meaningful small-manufacturing base already exists and recent change still points upward. Top 10 OZ 1.0 tracts by estimated manufacturing SME growth, `2015 -> 2022`: | Rank | Tract | County | State | 2015 est. SMEs | 2022 est. SMEs | Growth | |---|---|---|---|---:|---:|---:| | 1 | Census Tract 2218 | St. Louis County | Missouri | 12.2 | 198.6 | 186.4 | | 2 | Census Tract 3562 | Marion County | Indiana | 0.4 | 137.7 | 137.3 | | 3 | Census Tract 1000.01 | Harris County | Texas | 40.0 | 116.5 | 76.4 | | 4 | Census Tract 112.08 | Collier County | Florida | 0.0 | 65.0 | 65.0 | | 5 | Census Tract 113 | Tulsa County | Oklahoma | 84.1 | 144.6 | 60.5 | | 6 | Census Tract 8388 | Cook County | Illinois | 99.0 | 159.1 | 60.1 | | 7 | Census Tract 303 | Lake County | Indiana | 2.4 | 53.9 | 51.5 | | 8 | Census Tract 92.01 | Sacramento County | California | 58.0 | 104.0 | 46.0 | | 9 | Census Tract 7262 | Galveston County | Texas | 43.5 | 87.8 | 44.3 | | 10 | Census Tract 360 | Union County | New Jersey | 83.5 | 126.7 | 43.2 | What stands out: - The strongest OZ 1.0 tracts are not simply the largest tracts. - The useful signal comes from overlap between current base, recent change, and tract concentration. - Places that repeat across multiple signals deserve higher-priority follow-up. The list also has a clear geographic pattern: - The strongest OZ 1.0 growth tracts are spread across industrial metros rather than concentrated in one region. - Several tracts pair a low starting point with a sharp later-period rise, making them especially useful as follow-up candidates rather than legacy large-base incumbents. - The list mixes legacy industrial counties with Sun Belt and inland-growth locations, which suggests the candidate field is broader than a single "old industrial" geography. --- ## 5. OZ 2.0 promise results The OZ 2.0 side is forward-looking. It identifies tracts that already appear to have the right industrial ingredients before deeper local validation. For this draft, "promise" is ranked from a blended screen that favors: - stronger 2022 estimated manufacturing SME base - positive recent growth only - higher county manufacturing micro-firm share That keeps the shortlist focused on tracts with real present-day scale and forward momentum, rather than tracts that only rank highly because they are large but declining. Top 10 OZ 2.0 tracts by industrial fit / promise: | Rank | Tract | County | State | 2022 est. SMEs | Growth | Micro-firm share | Why it stands out | |---|---|---|---|---:|---:|---:|---| | 1 | Census Tract 755.16 | Orange County | California | 485.0 | 30.6 | 75.9% | strongest current base in the OZ2-only pool with real recent growth | | 2 | Census Tract 6025.13 | Los Angeles County | California | 209.4 | 54.6 | 79.0% | large base plus one of the strongest growth signals | | 3 | Census Tract 292.06 | King County | Washington | 247.1 | 12.6 | 75.1% | strong current footprint with positive momentum in a high-capacity metro | | 4 | Census Tract 102 | Multnomah County | Oregon | 144.1 | 1.6 | 76.3% | meaningful current base with a very small-firm-heavy county profile | | 5 | Census Tract 37.11 | McLennan County | Texas | 95.5 | 30.6 | 73.8% | balanced scale and growth rather than a one-variable candidate | | 6 | Census Tract 83.39 | San Diego County | California | 85.3 | 37.7 | 79.5% | smaller base, but strong growth and a strong small-firm mix | | 7 | Census Tract 3437 | Harris County | Texas | 113.0 | 10.9 | 72.5% | large industrial county with a tract that still shows positive forward signal | | 8 | Census Tract 6 | Weld County | Colorado | 98.7 | 16.3 | 72.1% | current scale plus visible recent upward movement | | 9 | Census Tract 8640.02 | Lake County | Illinois | 88.5 | 26.3 | 72.7% | solid growth with a non-trivial existing SME base | | 10 | Census Tract 830 | Maricopa County | Arizona | 94.9 | 14.9 | 72.8% | a plausible growth-market tract rather than a legacy-only industrial site | What stands out: - The strongest OZ 2.0 candidates combine an existing small-manufacturing base with real tract-level workforce concentration. - They belong in a shortlist for deeper local review, not in a final ranking of automatic winners. The list also has a clear geographic pattern: - Southern California appears repeatedly, but not for one reason only. Some tracts rank on current scale, others on growth, and some on both. - Texas, the Pacific Northwest, and interior growth metros also appear, which suggests the candidate field is broader than a single coastal corridor. - The strongest OZ 2.0 tracts already look like places with enough industrial activity to justify site-specific follow-up rather than purely exploratory outreach. --- ## 6. Data used ### Opportunity Zones Pack: `/packs/usa_opportunity_zones` Used for: - OZ 1.0 tract designation - OZ 2.0 eligibility - tract-level zone geometry and tract identity ### Industrial activity stack Pack: `/packs/usa_industrial_activity` Used for three different roles: #### SUSB - County business counts by NAICS and enterprise size - Used to anchor manufacturing SME counts - Manufacturing SMEs defined here as firms with fewer than 500 employees in `NAICS 31-33` #### LODES - Tract workplace jobs - Used as the tract-level weighting surface - Primary manufacturing allocator: `CNS05` #### CBP - County establishment and employment context - Useful for cross-checks and follow-up structural comparisons - Secondary role in this draft, but important for broader industrial analysis --- ## 7. Methodology summary ### Downscaling approach Within each county: `tract_estimated_manufacturing_smEs = county_manufacturing_smEs * tract_manufacturing_jobs / county_sum_of_tract_manufacturing_jobs` Primary weight: - `LODES CNS05` tract manufacturing jobs Fallback logic: - where tract manufacturing weights are weak or unavailable, broader tract job totals can be used as a weaker supporting allocator In `2022`, the allocation used direct manufacturing weights in `2957` counties and broader job fallback weights in `72` counties. ### Interpretation This produces a tract-level industrial fit surface. Each tract estimate should be read as: - a screening value - a prioritization value - a shortlist-building value Do not present it as a direct administrative count of tract firms. --- ## 8. How to strengthen this analysis This report uses the best current national-scale tract weighting surface already in DaedalMap. It can get stronger with additional layers. Priority upgrades: 1. industrial or commercial buildings 2. parcel or zoning-derived industrial-use signals 3. regulated or heavy-facility overlays 4. local institutional anchors such as training sites or industrial campuses The next layer would help distinguish: - tracts with manufacturing jobs - tracts with industrial buildings - tracts with both Those are not always the same places. --- ## 9. Caveats ### County-to-tract estimation The core caveat is simple: - business counts are observed at county scale - tract values are estimated from weights This is a strong screening method, but it remains modeled. ### Time coverage The recent firm-structure view depends on the available SUSB county-level industry detail. Growth should therefore be tied explicitly to the observed years available in the source. ### Screening versus siting This workflow finds good candidates for further attention. It does not by itself answer: - whether a tract has usable buildings - whether local stakeholders are ready - whether utilities, logistics, or zoning make a specific site practical Those belong to the next stage. ### Result ranking logic The OZ 1.0 table is a direct growth ranking from estimated tract manufacturing SMEs between 2015 and 2022. The OZ 2.0 table is a blended shortlist. It favors: - stronger 2022 estimated manufacturing SME base - positive recent change - higher county manufacturing micro-firm share That makes it appropriate for candidate screening, not as a permanent "best tract" claim. --- ## 10. Recommended next steps 1. Add a second layer using industrial or commercial building and land-use context. 2. Add 2-4 local spot checks for tracts that rank highly on the national scan. 3. Add state or regional summaries where patterns are strong enough to matter. 4. Convert this draft into the attached PDF artifact for the public research page. --- ## Appendix A. Suggested final PDF structure 1. Title page 2. Executive summary 3. Research question and motivation 4. Data used 5. Methodology 6. Topline findings 7. Top OZ 1.0 growth tracts 8. Top OZ 2.0 promise tracts 9. Caveats 10. Next-step shortlist