We investigate the speed at which clusters of invention for a technology migrate spatially following breakthrough inventions. We identify breakthrough inventions as the top 1% of US inventions for a technology during 1975–1984 in terms of subsequent citations. Patenting growth is significantly higher in cities and technologies where breakthrough inventions occur after 1984 relative to peer locations that do not experience breakthrough inventions.

Most countries exhibit large and persistent geographical differences in wages, income and unemployment rates. A growing class of "place based" policies attempt to address these differences through public investments and subsidies that target disadvantaged neighborhoods, cities or regions. Place based policies have the potential to profoundly affect the location of economic activity, along with the wages, employment, and industry mix of communities. These programs are widespread in the U.S. and throughout the world, but have only recently been studied closely by economists.

We explore the impact of geographically bounded, intra-firm linkages (internal agglomerations) and geographically bounded, inter-firm linkages (external agglomerations) on firms’ location strategies. Using data from the Census Bureau’s Longitudinal Business Database, we analyze the locations of new establishments of biopharmaceutical firms in the U.S. in 1993–2005. We consider all activities in the value chain and allow location choices to vary by R&D, manufacturing, and sales. Our findings suggest that internal agglomerations have a positive impact on location.

Clusters are geographic concentrations of industries related by knowledge, skills, inputs, demand, and/or other linkages. A growing body of empirical literature has shown the positive impact of clusters on regional and industry performance, including job creation, patenting, and new business formation. There is an increasing need for cluster-based data to support research, facilitate comparisons of clusters across regions, and support policymakers and practitioners in defining regional strategies.

We quantify agglomeration spillovers by estimating the impact of the opening of a large new manufacturing plant on the total factor productivity (TFP) of incumbent plants in the same county. Articles in the corporate real estate journal Site Selection reveal the county where the "Million Dollar Plant" ultimately chose to locate (the "winning county"), as well as the one or two runner-up counties (the "losing counties"). The incumbent plants in the losing counties are used as a counterfactual for the TFP of incumbent plants in winning counties in the absence of the plant opening.

This paper outlines elements of a conceptual framework that clarifies the role that clusters play relative to government policies and actions of individual companies in supporting the emergence of "High Road" strategies that lead to better New Growth Path–related outcomes. It then focuses on creating a new set of data that can start shedding light on the empirical relevance of this framework. The first main section of the paper draws on a new set of employment and wage data across European clusters.

Increasing interest in clusters among researchers and economists is only one aspect of a new approach to economic research and policy, one that supplements the macroeconomic and legal conditions necessary to achieve economic progress with microeconomic foundations. This report presents an overview of the current research on cluster-based economic development. First, it looks at key conceptual foundations of the cluster approach: the definition of clusters, different types of clusters, economic benefits that clusters provide, and factors that influence cluster performance.

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. 

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.