Cluster strategies have the potential to accelerate regional economic growth, but only if they are properly understood and applied. This Governor’s Guide examines the changing economic environment in which clusters function, summarizes the lessons learned from recent experience, and offers practical recommendations for cluster initiatives that governors can take to strengthen their states’ economies.

Clusters are defined by relationships, not memberships, and spatial boundaries are variable and porous. Clusters are often interdependent and overlapping, with some companies being part of more than one. Their formation is usually serendipitous rather than engineered by government. Still, clusters are more likely to develop in regions that offer the needed human, intellectual, financial, and social capital and that nourish their growth through supportive public policies and programs.

Determining the regional location of the state’s clusters is the starting point of any cluster-based strategy. Identifying clusters is still as much art as science, but a useful picture of clusters can be drawn by combining analyses of business sectors, employment, and wage data with regional observation and interviewing key business leaders. In doing so, however, it is important to avoid creating definitions and boundaries that are too narrow, that cannot adjust to constant change, or that discourage collaboration among clusters.

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Image: Yarek Waszul