This paper examines the regional economic performance, composition of regional economies, and role of clusters in the U.S. economy from 1990 to 2000. 

The performance of regional economies varies markedly in terms of wage, wage growth, employment growth and patenting rate. Based on distribution of economic activity across geography, the paper classifies U.S. industries into traded, local, and resource-dependent categories. Traded industries account for only about one-third of employment, but register much higher wages and rates of innovation and influence local wages. 

The performance of regional economies is strongly influenced by the strength of local clusters and the vitality and plurality of innovation. Regional wage differences are dominated by the relative performance of the clusters in a region, while the particular mix of clusters is a secondary factor.

Image: Antoine Revey