Assessing industry linkages in regional input-output tables

The regional policy literature has shown renewed interest in the promotion of industries with the potential to embed themselves into regional economies. Unfortunately, analysis of sectors within strategy-led documents often fails to tie the identification of key industries to any specific methodology. The paper demonstrates the use of several alternative methods of evaluating inter-industry linkages using Input-Output tables. In particular, and following the work of Dietzenbacher (1992), it uses financial information from Welsh Input-Output tables for 1995 to derive a measure giving specific insights into regional industry interdependency, and the presence of relatively self-contained groups of activity. This is the first time that this more complex measure has been applied to a regional transactions table in the UK, with the method shown to be of direct relevance to a smaller open economy. The results reveal differences in the rankings of key sectors compared with more conventional approaches. Conclusions discuss the importance of assessing industry interdependencies for the regional strategic planning process, and the problems associated with using Input-Output frameworks for such assessment.