LOCAL AUTHORITY DISTRICT KRUGMAN SPECIALISATION INDEX & PRODUCTIVITY MAP

KRUGMAN SPECIALISATION INDEX (KSI) & PRODUCTIVITY for GB LADs 2015-2024

Context

This free-to-use interactive mapping tool provided by New Horizon Economics explores patterns of local economic structure and productivity across Great Britain’s Local Authority Districts between 2015 and 2024. The application allows users to examine the degree to which local economies differ from the national industrial structure using the Krugman Specialisation Index (KSI), alongside comparative measures of productivity based on Gross Value Added (GVA) per full-time equivalent (FTE) worker.

The combined analysis provides insight into the relationship between economic specialisation and productivity, helping identify areas characterised by highly specialised economic structures, broader-based diversified economies, and high- or low-productivity local labour markets.

The application has a range of potential uses including:

• benchmarking areas against national patterns;
• exploring relationships between productivity and industrial concentration;
• and identifying economically similar Local Authority Districts.

How to Use

The application contains three analytical modes:

• Krugman Specialisation Index only;
• Productivity only;
• and a combined ‘Interactive’ analysis.

The single-variable maps display either local economic specialisation or productivity independently. The interactive analysis combines both indicators using a two-dimensional classification matrix, allowing users to identify areas sharing similar structural and productivity characteristics.

The year slider can be used to move between years or animate changes over time. Hovering over an area displays the relevant values and national rankings for the selected indicators. In the interactive analysis mode, the application also identifies the most economically similar Local Authority Districts based on the interaction between specialisation and productivity characteristics. Clicking an area zooms to the selected geography, whilst the reset button restores the national map view.

Note that productivity data is only available to 2023. The analysis will be updated once 2024 GVA data become available.

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DATA SOURCES & METHOD

The Krugman Specialisation Index is calculated at 4-digit SIC level using industry employment shares at Local Authority District level relative to the Great Britain industrial structure. Values presented in the application represent the Krugman Index divided by two, producing values ranging theoretically between 0 and 1, where higher values indicate a more specialised economic structure relative to the national economy.

Productivity is measured using Gross Value Added per full-time equivalent worker, indexed such that the Great Britain average equals 100. Gross Value Added data are taken from the Office for National Statistics April 2025 release and use the ‘all industry’ chained volume measure of GVA.

Full-time equivalent employment estimates are derived using:.

• Business Register and Employment Survey (BRES) employee estimates;
• Annual Population Survey (APS) self-employment estimates;
• Annual Survey of Hours and Earnings (ASHE) estimates of mean hours worked;
• and Ministry of Defence military personnel estimates

FTE employment for region r is calculated as: (BRES employees in r + APS Self Employment in r) x (ASHE Mean Hours in r/37) + MoD FTEs in r

The application uses harmonised 2023 Local Authority District boundaries for all years to ensure geographical consistency over time.