Key Research Behind the Project
The U.S. Cluster Mapping Project is motivated by research findings on the presence of clusters, economic performance as a result of clusters, and cluster-based economic development efforts. This section highlights some of the key publications on these topics that have been produced by the research group engaged in this project. While we only list publications by the U.S. Cluster Mapping research team, there is a much wider range of literature with contributions from many scholars in these subjects. The listed publications reference this additional academic and policy-oriented literature.
The Competitive Advantage of Nations
Michael E. Porter (1990)
In this path-breaking book, Michael Porter presents a new theory of how nations and regions compete and their sources of economic prosperity. Motivated by his appointment by President Ronald Reagan to the President's Commission on Industrial Competitiveness, the book has guided economic policy in countless nations and regions. Subsequent articles have expanded on the concept of clusters (geographic concentrations of related industries that occur in particular fields) and other aspects of the theory.
The Economic Performance of Regions
Michael E. Porter (2003)
This paper examines the basic facts about the regional economic performance, the composition of regional economies and the role of clusters in the U.S. economy over the period of 1990 to 2000. The performance of regional economies varies markedly in terms of wage, wage growth, employment growth and patenting rate. Based on the distribution of economic activity across geography, Porter classifies U.S. industries into traded, local and resource-dependent. 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 region in the clusters in which it has positions, with the particular mix of clusters secondary. A series of regional policy implications emerge from the ﬁndings.
Defining Clusters of Related Industries
Mercedes Delgado, Michael E. Porter, and Scott Stern (2016)
Clusters are groups of industries related by knowledge, skills, inputs, demand, and other linkages in a region (Porter, 2003). There is an increasing need for cluster-based data to allow regions to benchmark their clusters against other regions and to help researchers, policymakers and practitioners define effective regional strategies. This paper develops a novel clustering algorithm that generates sets of quantitatively derived industry cluster definitions based on clearly specified parameter choices. The original cluster definitions developed by Porter (2003) are very meaningful, capturing many types of industry interdependencies. We use our algorithm to propose a new set of systematically generated cluster definitions that incorporate measures of industry linkages based on co-location patterns, input-output links, and labor occupation links. This set of cluster definitions better capture the structure of industry interdependencies today, and can be replicated and updated over time.
Clusters and Entrepreneurship
Mercedes Delgado, Michael E. Porter, and Scott Stern (2010)
This article examines the role of regional clusters in regional entrepreneurship. We focus on the distinct influences of convergence and agglomeration on growth in the number of start-up firms as well as in employment in these new firms in a given region-industry. While reversion to the mean and diminishing returns to entrepreneurship at the region-industry level can result in a convergence effect, the presence of complementary economic activity creates externalities that enhance incentives and reduce barriers for new business creation. Clusters are a particularly important way through which location-based complementarities are realized. The empirical analysis uses a novel panel dataset from the Longitudinal Business Database of the Census Bureau and the US Cluster Mapping Project. Using this dataset, there is significant evidence of the positive impact of clusters on entrepreneurship. After controlling for convergence in start-up activity at the region-industry level, industries located in regions with strong clusters (i.e. a large presence of other related industries) experience higher growth in new business formation and start-up employment. Strong clusters are also associated with the formation of new establishments of existing firms, thus influencing the location decision of multi-establishment firms. Finally, strong clusters contribute to start-up firm survival.
Clusters, Convergence, and Economic Performance
Mercedes Delgado, Michael E. Porter, and Scott Stern (2014)
This paper evaluates the role of regional cluster composition in the performance of regional industries. On the one hand, diminishing returns to specialization in a location can result in a convergence effect: the growth rate of an industry within a region may be declining in the level of activity of that industry. At the same time, positive spillovers across complementary economic activities provide an impetus for agglomeration: the growth rate of an industry within a region may be increasing in the size and “strength” (i.e., relative presence) of related industries. Building on Porter (1998, 2003), the authors develop a systematic empirical framework to analyze the role of regional clusters – groups of closely related and complementary industries operating within a particular region – in the growth of regional industries. The authors exploit data from the U.S. Cluster Mapping Project to examine agglomeration within regional clusters after controlling for convergence at the region-industry level. The authors find that industries located in a strong cluster register higher employment and patenting growth. Industry growth also increases with the strength of related clusters in the region, and with the strength of similar clusters in adjacent regions. The authors also find evidence of the complementarity between employment and innovation performance in regional clusters. The initial employment and patenting strength of a cluster each has a separate positive effect on the employment and patenting growth of the constituent industries. Finally, the authors find that new regional industries emerge where there is a strong initial cluster environment. These findings are consistent with multiple types of externalities arising in clusters (knowledge, skills, input-output linkages, and others).
Clusters and the New Economics of Competition
Michael E. Porter (1998)
This Harvard Business Review article explains how clusters foster high levels of productivity and innovation and lays out the implications for competitive strategy and economic policy. Economic geography in an era of global competition poses a paradox. In theory, location should no longer be a source of competitive advantage. Open global markets, rapid transportation, and high-speed communications should allow any company to source anything from any place at any time. But in practice, location remains central to competition. Porter explains how clusters keep location relevant to competition: first, by increasing the productivity of companies based in the area; second, by driving the direction and pace of innovation; and third, by stimulating the formation of new businesses within the cluster. Geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance. Competitive advantage lies increasingly in local things--knowledge, relationships, and motivation--that distant rivals cannot replicate.
Clusters of Innovation: Regional Foundations of U.S. Competitiveness
Michael E. Porter, Council on Competitiveness, Monitor Group, and ontheFRONTIER (2001-2002)
This national report draws heavily upon the regional studies of five pilot regions: Atlanta, Pittsburgh, the Research Triangle in North Carolina, San Diego, and Wichita. It examines the composition and performance of regional economies, how industry clusters develop and innovation arises, and how a region can establish a strategy and action program to drive its economy and clusters forward. The framework employed and the lessons learned apply to every region of the country.
Clusters and Economic Policy: Aligning Public Policy with the New Economics of Competition
Michael E. Porter (2007)
The fundamental goal of economic policy is to enhance competitiveness, which is reflected in the productivity with which a nation or region utilizes its people, capital, and natural endowments to produce valuable goods and services. High and rising productivity, measured by the value produced by a day of work, determines the level of wages that a nation can sustain and its standard of living in the medium and long run. Clusters are a fundamental economic unit in the modern economy, and an important driver of competitiveness. Cluster-based policies have begun to play a prominent role in some U.S. states and regions, and in many other nations, but cluster-based approaches have been all but absent at the Federal level in the U.S. A selective Federal role in cluster-based policy will make Federal economic policy more effective and better utilize the scarce resources available. Federal leadership in cluster-based policy would also encourage cluster-based approaches at the state and local level.
This paper reviews implications of recent research on competitiveness and clusters for regions and regional policy. A new framing of competitiveness clarifies the role of regions. Its empirical findings align well with the literature on drivers of regional performance, but there are opportunities for mutual learning. A step-change in the availability of data on clusters and cluster policies has enabled new research approaches. Clusters are shown to have a close association with regional economic performance and evolution. Cluster policies are largely focused on strengthening existing agglomerations, not creating new ones. The paper discussed several practical insights for regional policy makers.This paper reviews implications of recent research on competitiveness and clusters for regions and regional policy. A new framing of competitiveness clarifies the role of regions. Its empirical findings align well with the literature on drivers of regional performance, but there are opportunities for mutual learning. A step-change in the availability of data on clusters and cluster policies has enabled new research approaches. Clusters are shown to have a close association with regional economic performance and evolution. Cluster policies are largely focused on strengthening existing agglomerations, not creating new ones. The paper discussed several practical insights for regional policy makers.