Key Industry Groups
This chapter describes nine key industry groups identified by the Chester County Economic Development Council as critical industry groupings.
While not necessarily the largest industries by employment in the county, the key industries are critical for a variety of reasons including the industry's relative strength, high profile for the business community and the public, importance for general economic development, or historic significance in the county. The data groups categories from the federal Bureau of Labor Statistics that may overlap at times between the nine industries. The data includes estimates of sole proprietors and contract employees, which are particularly important in industries such as agriculture. The ratio of establishments with one person from the NETS 2013 data were used to estimate self-employed persons in 2022. Figures were adjusted to account for growth of self-employed persons from 2013 to 2022.
Figure 37 — Industry Group Comparison
Agriculture & Food Production
Chester County has a long and distinguished history as an agricultural powerhouse. Chester County agriculture ranks 2nd among Pennsylvania's 67 counties in the value of agricultural products sold. This is due to the diversity of the industry, the fact that half of the nation's mushrooms are grown in the county, and the county's location near affluent markets for direct-to-consumer sales. The county's prime agricultural soils have positioned it to excel in the following industries: crop production, Christmas tree nurseries, forestry, landscaping, viticulture, and orchard and vegetable production. The county also has a significant amount of dairy, swine, poultry and egg production, and it is one of the most densely populated equine areas in the country. Chester County's unique indoor growing sectors, led by advancements in the mushroom sector, are cutting edge, as are advancements in greenhouse production and aquaculture. For this analysis, the agricultural industry is broadly defined as agricultural producers, food manufacturing, beverage manufacturing, agricultural chemical manufacturing, farm machinery manufacturing, agricultural wholesalers, fruit and vegetable stores, farm stores, and agricultural veterinary education/services. When compared with nearby Pennsylvania counties, Chester County has more employment directly in agricultural production than other counties, most likely due to the mushroom industry. Lancaster, Montgomery, and Philadelphia Counties have significantly more workers in food manufacturing than Chester County.
Figure 38 — Estimated Agricultural and Food Production Employment
| Agricultural Industry, based on Burau of Labor Statistics | 8,813 |
| Estimated Self Employed | 518 |
| Other (from estimated New Bolton Vet School) | 400 |
| Total | 9,731 |
The location quotient for 2022 agriculture and food production, broadly defined, was 1.33, down from 2021 but in line with the 2020 location quotient of 1.35. The consistently above one location quotient shows that agriculture and food production is strong in Chester County. It should be noted that, because sole proprietors and some agricultural workers are not in the BLS data, a place with corporate farming, like the mushroom industry, will show a higher location quotient.
The shift share analysis for employment between 2015 and 2022 indicates local factors are having a negative impact on change in agricultural employment.
Chester County's significant agriculture-related employers are led by food and beverage manufacturers and mushroom growers and processors.
Figure 39 — Significant Agriculture and Food Production Employers 2021
Education
Chester County is known for having some of the best primary and secondary schools in the Commonwealth. Within the past few years, multiple Chester County schools were ranked in the top five best school districts in the state. Chester County is home to a variety of educational institutions, which include: 12 public school districts composed of 60 elementary schools, 19 middle schools, and 17 high schools; 95 private early childhood education/ elementary schools; 20 private high schools; 18 charter schools/online options; three technical college high school campuses; six colleges/universities; and numerous postsecondary education institutions. West Chester University, a state public school, is the largest university in the county and has been growing significantly. Uniquely, the county is also home to two historically Black colleges/universities, Cheyney University of Pennsylvania (the oldest HBCU in the country) and Lincoln University. Chester County is within the Philadelphia region, which is one of the most robust higher education areas in the country, with major universities like the University of Pennsylvania, Temple University, and Drexel University, and many well-established smaller colleges and universities, such as Villanova University, Haverford College, Bryn Mawr College, and Ursinus College. Philadelphia leads the region in education employment, with approximately 85,500 jobs, although some of these jobs may be health care related because of the way teaching hospitals, such as the Penn Health system, get classified.
Figure 40 — Estimated Education Employment
| Education Industry, based on Burau of Labor Statistics | 17,381 |
| Estimated Self Employed | 188 |
| Total | 17,569 |
The location quotient for education was .84, which is relatively low compared to the nation. Philadelphia's location quotient, on the other hand, is 1.45, which reflects the city's role as a major education center for the country.
The shift share analysis of employment between 2015 and 2022 indicates that local factors are having a positive impact on change in education employment, which has been declining nationally.
Chester County's significant education-related employees are a mix of different types of education providers, including special needs providers, universities, and school districts.
Figure 41 — Significant Education Employers 2021
Energy
The energy sector is a key part of any local economy, keeping businesses, homes, and institutions going. The sector includes electric power, energy production, and water supply/disposal. Alternative or renewable energy sources are an important and growing part of the energy sector, especially as the county works to reduce greenhouse gas emissions. These sources include solar, wind, geothermal, bio-energy, water, and energy efficiency improvements. For this analysis, the energy sector is broadly defined as utilities, utility system construction, electrical and wiring contractors, plumbing and HVAC contractors, petroleum merchant wholesalers, fuel dealers, pipeline transportation, and utility regulation. Chester County has less employment in the energy sector than nearby Pennsylvania counties. Montgomery County, with just over 13,500 employees in the sector, leads the region in energy employment.
Figure 42 — Estimated Energy Employment
| Energy Industry, based on Burau of Labor Statistics | 4,634 |
| Estimated Self Employed | 283 |
| Total | 4,917 |
The location quotient for energy, broadly defined, was .75, which is relatively low compared to the nation as a whole. Chester County has not historically been a major energy center.
Despite the industry's growth in the county, the shift share analysis of employment between 2015 and 2022 indicates that local factors had a negative impact on energy employment change. Instead, national industry growth impacted local growth.
Chester County's significant energy-related employees are related to the major energy providers and large contractor companies.
Figure 43 — Significant Energy Employers 2021
Finance
Chester County is home to a very significant and strong financial industry, with considerable employment, high wages, and a strong Gross Domestic Product. The sector includes businesses involved with portfolio management, commercial banking, investment advisory services, mortgage and loan brokering, credit union banking, and secondary market financing. The largest financial industry business is Vanguard, which is also Chester County's largest employer. Vanguard has its global headquarters in Malvern, PA, and employs more than 8,000 people in Chester County alone. The finance industry is heavily concentrated around the central portion of the county including Wayne, Berwyn, Malvern, and West Chester. For this analysis, the finance sector is defined as finance, insurance, accounting, bookkeeping, and public finance. When compared with nearby Pennsylvania counties, Chester County has fewer employees than Montgomery or Philadelphia counties but has seen more growth in the financial sector than these places.
Figure 44 — Estimated Finance Employment
| Finance Industry, based on Burau of Labor Statistics | 24,549 |
| Estimated Self Employed | 330 |
| Total | 24,879 |
The location quotient for finance was 1.95, which is high compared to the nation as a whole and higher than 2021. This is also higher than nearby Pennsylvania counties.
The shift share analysis of employment between 2015 and 2022 indicates that local factors are having a very large positive impact on finance employment growth in Chester County. Neighboring counties do not have similar increases. Chester County's strong growth is due to both Vanguard's exceptional growth and the strong financial cluster in the county.
Chester County's significant finance-related employers include portfolio managers and investment services.
Figure 45 — Significant Finance Employers 2021
Health Care
The Health Care industry is an important component of both the business and residential communities in Chester County. Health care includes hospitals, long-term care facilities (continuing care retirement communities, assisted living, and nursing homes), home health and hospice care, acute rehabilitation centers, emergency medical services, and professional medical offices. For this analysis, the health care sector is defined as hospitals, ambulatory health care services, nursing and residential care facilities, direct health and medical insurance carriers, home health equipment rental, and public health administration. Despite the need for health care workers caused by COVID-19, Chester County saw only a 4 percent increase in employment in the sector between 2015 and 2022 Although there has been recent growth in the health care sector, Chester County has fewer employees in health care than Delaware, Lancaster, Montgomery, or Philadelphia counties. Much of the decline in health care jobs is likely due to the closures of both Brandywine Hospital and Jennersville Hospital in 2022.
Figure 46 — Estimated Health Care Employment
| Health Care Industry, based on Burau of Labor Statistics | 27,336 |
| Estimated Self Employed | 230 |
| Total | 27,566 |
The location quotient for health care was .89, which puts the county a little below the nation as a whole. Philadelphia has a location quotient of 1.46 and is the regional leader in health care.
The shift share analysis of employment between 2015 and 2022 indicates that local factors are negatively impacting health care employment change in Chester County; despite growth nationally in the industry. This is likely due to the closures of both Brandywine Hospital and Jennersville Hospital in 2022.
Chester County's significant health care-related employers are led by hospitals, followed by senior-oriented nursing and assisted living facilities.
Figure 47 — Significant Healthcare Employers 2021
Information Technology
Chester County is home to a robust tech community, with organizations that produce, process and distribute information as well as a broad set of industries that utilize information technology to run their businesses such as broadcasting, finance, healthcare, biotech and pharmaceuticals. Named the "Top Tech Hub" in Pennsylvania, Chester County has a high concentration of tech-related businesses. For this analysis, the information technology sector is defined as computer and electronic product manufacturing, computer and software merchant wholesalers, software publishers, data processing and hosting, internet publishing and web search portals, and computer systems design. Although Montgomery County has the most information technology employees in the area, Chester County has more employees in information technology than Delaware, Lancaster, or Philadelphia counties and has more employment concentrated in this industry. Recently, there has been a decline in information technology employment, which seems to be driven by changing employment at certain large companies.
Figure 48 — Estimated Information Technology Employment
| Information Technology Industry, based on Burau of Labor Statistics | 10,259 |
| Estimated Self Employed | 222 |
| Total | 10,481 |
The location quotient for information technology was 1.46, down from 1.75 in 2021, but puts the county well above the nation as a whole and is the highest location quotient of nearby PA counties.
The shift share analysis of employment between 2015 and 2022 indicates that local factors are having a significant negative impact on information employment change.
Chester County's significant information technology-related employers are led by larger computer systems design firms.
Figure 49 — Significant Information Technology Employers 2021
Life Sciences
Historically, Chester County had many life science businesses. After employment declines in the early part of the 21st century, Chester County is seeing growth in this sector again. The life science cluster includes biotechnology and pharmaceutical research, development, manufacturing, and distribution firms. For this analysis, the life science sector is defined as pharmaceutical and medicine manufacturing, research and development in biotechnology, medical equipment and supplies manufacturing, medical equipment wholesalers, ophthalmic goods merchant wholesalers, druggist goods merchant wholesalers, analytical laboratory instrument manufacturing, and medical and diagnostic laboratories. Although Montgomery County has the most life science employees in the area, Chester County has more employees in life sciences than Delaware or Lancaster counties. While in 2020 Chester County's employment in life sciences was higher, Philadelphia's employment grew between 2020 and 2021 to outpace Chester County, and remained higher in 2022. Much of Chester County's 2022 decline in life sciences employment was largely due to the relocation of Amerisource Bergen from Chester County to Montgomery County.
Figure 50 — Estimated Life Sciences Employment
| Life Sciences Industry, based on Burau of Labor Statistics | 5,754 |
| Estimated Self Employed | 11 |
| Total | 5,765 |
The 2022 location quotient for life sciences was 2.29, down from 3.07 2020, and 3.16 in 2018, which puts the county significantly above the nation as a whole. Montgomery County leads the region in this sector, with an estimated 25,339 employees in life sciences. Montgomery's 2021 location quotient increased from previous years to 5.1, far above the nation as a whole, and remained high at 4.94 in 2022.
The shift share analysis of employment between 2015 and 2022 indicates that local factors are negatively impacting life science employment change.
Chester County's significant life science-related employers are led by pharmaceutical companies.
Figure 51 — Significant Life Sciences Employers 2021
Manufacturing
As the original home of the country's iron industry, Chester County has a long heritage of manufacturing and includes firms ranging in size from small to large, with an increasing number providing products to international markets. Industry specialization includes precision metal fabrication; electronic components and electronic products; telecommunications equipment supplies; medical products and devices, as well as medical product processing systems; food products, such as snack foods, beverages and baked goods; large blowers, compressors and control technology; chemical processing technologies, pharmaceutical ingredients and fabricated precision metal alloys. For this analysis, the manufacturing sector is defined as manufacturing and mining. A number of counties in the region have strong manufacturing sectors, but manufacturing is no longer a dominant industry in the regional economy. Chester County has seen declines in manufacturing employment, following national trends in this sector.
Figure 52 — Estimated Manufacturing Employment
| Manufacturing Industry, based on Burau of Labor Statistics | 17,683 |
| Estimated Self Employed | 316 |
| Total | 17,999 |
The location quotient for manufacturing was .81, which puts the county below the national norm. Locally, Lancaster and Montgomery counties, with location quotients of 1.76 and 1.01 respectively, have higher shares of workers in manufacturing than the nation as a whole.
The shift share analysis of employment between 2015 and 2022 indicates that local factors are negatively impacting manufacturing employment change. Locally, only Lancaster and Montgomery Counties are seeing positive manufacturing employment growth due to local factors. Lancaster has seen growth in the manufacturing sector, but Montgomery County remains the leader in the state for manufacturing employment with over 45,000 employees.
Chester County's significant manufacturing-related employers are led by food processing but include a wide array of manufacturers.
Figure 53 — Significant Manufacturing Employers 2021
Tourism and Entertainment
The tourism and entertainment industry provides both job opportunities and recreational benefits for its residents. The county is home to Longwood Gardens, the most visited display garden in Pennsylvania and one of the most prominent in the country, as well as other arts and cultural museums, attractions and event facilities. In addition, the county's main streets and villages attract many visitors to shop and dine. For this analysis, the tourism and entertainment sector is broadly defined as arts, entertainment, recreation, accommodation, food services, breweries, wineries, baked goods stores, gift stores, and travel services. Philadelphia, as a convention and tourism and entertainment hub, leads the region in this sector with 70,246, down from 77,000 in 2018 but recovering from COVID-19 numbers. Prior to COVID-19, all of the region, including Chester County, had seen strong growth in this sector, possibly due to the region becoming more popular as a tourist destination. Tourism employment in 2020 declined drastically across the region, likely caused by COVID-19 related shut-downs, and has still not fully recovered.
Figure 54 — Estimated Tourism and Entertainment Employment
| Tourism and Entertainment Industry, based on Burau of Labor Statistics | 21,443 |
| Estimated Self Employed | 466 |
| Total | 21,909 |
The location quotient for tourism and entertainment was .79, which puts the county below the national norm. The region as a whole is below the nation as a whole for tourism and entertainment.
The Shift Share analysis of employment between 2015 and 2022 indicates that local factors are positively impacting tourism and entertainment employment, and that the decline was caused mainly by declines in the industry nationally.
Reflecting the diversity of the industry and its tendency to have many smaller employers, Chester County's significant tourism-related employers are a mix of businesses, although hotels and restaurants are most common.
