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Sales Multipliers

Sales multipliers show how “deeply-rooted” an industry is in your region—for example, a highly-developed cluster will have a high sales multiplier because every dollar fed into the cluster from the outside has a high ripple effect, propagating through the regional economy for some time before it leaks out. One dollar of sales coming into a highly-developed Automotive Manufacturing cluster, for example, might have a ripple effect of 2.8 (that dollar led to a total of $2.80 in regional sales). Industries and clusters with very low multipliers are usually owned outside of the region (so the profit is lost immediately) and also buy mostly from outside the region (a “shallow root system”).

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