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The economy today is characterized by the change in its structure from manufacturing to service production. In some communities, the process has been accelerated as existing firms choose to relocate to more economically favorable sites. The economic prospects of such communities will be determined in part by their ability to accommodate and adapt to this structural transformation. The purpose of the article is to illustrate the application of shift‐share analysis as one method by which these changes can be monitored. South Bend and Elkhart, Indiana serve as case studies.