An economic base is all the exporting activities of a particular economy. Something that is produced in the local economy but sold outside of its boundaries is an export. A strong economic base is essential to the growth of an area because the amount of exports determines the total level of local economic activity. A particular Metropolitan Statistical Area's (MSA) economy may be analyzed to see what exactly makes up the base and non-base. Economic base analysis concentrates on the importance of exports to the local economy. A local area has little influence on the demand for the goods and services it exports. This demand is determined outside the local area by economic conditions in the region and the entire nation. The diversity of a local economy may also be determined by an economic base analysis. A healthy economy is a diverse one. It is smart to have a "diversified economic base- to assure a more stable economic system for a MSA. If total export employment is spread over various industries, then it is better equipped to handle a few of them having decreased economic activity.
The MSA of interest in this particular analysis is San Francisco, California. The analysis will examine the economic base of this MSA and determine, among other things, if it has a stable and healthy local economy. The seven industries with the largest location quotients will be described as well as the seven largest industries in terms of their total employment. This will give a better picture of what really makes up the local economic base and perhaps give a forecast of this economy's potential in the near future.
The city and county of San Francisco is the fourth-largest city in California with a population of 776,773 (Wikipedia, 2001). San Francisco is a consolidated city-county made up of 11 districts that is situated at the northern tip of the San Francisco Peninsula. It is located roughly six hours north of Los Angeles.