Regional industry clusters represent a potent source of productivity at a moment of national vulnerability to global economic competition, which has put the nation's capacity for generating stable, well-paying jobs for many U.S. workers at risk. While the federal government has supported cluster development, the current programs are inadequate for bolstering competitive regions and competitive clusters in particular.
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 any thing from any place at any time.
This report illustrates the complementary advantages of applying cluster analysis to the established economy-wide analysis that is traditionally used in determining export competitiveness. Written in a non-technical perspective, this report provides an introduction to the cluster-based approach to competitiveness, 10 core tools used in cluster initiatives, discussion on the key stages involved in initiating cluster analysis, and finally discussion on the policy implications of a cluster-based approach. Also included is an annex of resource materials.
This report sponsored by the U.S. Economic Development Administration explores the fundamental changes within our economies: community, regional, state and national. It provides great insight into the current economic challenges and opportunities that cluster-based projects face in regions throughout the country as they aim for long-term economic prosperity.
This paper evaluates the role of regional cluster composition in the economic performance of industries, clusters and regions. 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.
The state of South Carolina has for years relied on a low-cost economic strategy, but with the rise in outsourcing manufacturing to China, Mexico, and other low-cost based economies, South Carolina has since come to trail the national average in several measures of economic standing. The South Carolina Competitiveness Initiative outlines its strategic vision to build on the existing structures and clusters of the South Carolina economy, capitalizing on the strengths of the automotive, textile, chemical products, tourism, forest products, production technology, and power generation and
This article focuses on a cluster-based analysis of the Berkshires region in Massachusetts, analyzing rural areas and the associated clusters. The Berkshires offer a unique quality of life—a setting rich in both natural beauty and cultural attractions—and this has encouraged skilled workers from manufacturing companies to stay, and has also attracted outside visitors.
This paper examines the role of regional clusters in regional entrepreneurship, focusing on the distinct influences of convergence and agglomeration on growth in number of start-ups, as well as employment in such 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.
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.