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Industry Clusters

Introduction into concept of clusters

Over the last 15 to 20 years, cluster analysis has emerged as a new way of looking at economic development, integrating regional differences in development and economic specialization (Porter 1990, 2003; Sweeney and Feser 1998; Feser 2004, Cortright 2006). An increasing number of states
and regions in the United States and overseas have modified their economic development strategies to focus and capitalize on the business and industry clusters where they have, or would like to have, a competitive advantage. In adopting a cluster strategy, states and regions hope to maximize their competitive advantage in existing industries and to build new strengths in the emerging industries that will replace older, declining sectors (Nolan 2003).

Most authors attribute at least four characteristics to clusters:

(a) a geographically bounded concentration of similar, related, or complementary businesses;

(b) active channels for transactions and communications among these businesses;

(c) shared and specialized infrastructure, labor markets, and services; and

(d) common competitive opportunities and threats

It is important to understand that economic clusters are not mutually exclusive in terms of the industrispecial'nymes that comprise them. The driver industries are the target and provide the name for the cluster, while the supporting industries may span the typical categories of economic sectors. These sectors are united in their foundational support of the driver industries.

How clusters are defined

The research team defined 17 clusters at the six-digit NAICS level. One of these clusters, the manufacturing supercluster, was subsequently disaggregated into six more- specialized subclusters. Although there is no universally defined or accepted set of clusters, the basic principles underlying the cluster concept were used to specify the 17 used in this study.

List of current Industry clusters (click on cluster name to open its map in a viewer)

  1. Advanced Materials
  2. Agribusiness, Food Processing and Technology
  3. Apparel and Textiles
  4. Arts, Entertainment, Recreation and Visitor Industries
  5. Biomedical/Biotechnical (Life Sciences)
  6. Business and Financial Services
  7. Chemicals and Chemical-Based Products
  8. Defense and Security
  9. Education and Knowledge Creation
  10. Energy (Fossil and Renewable)
  11. Forest and Wood Products
  12. Glass and Ceramics
  13. Information Technology and Telecommunications
  14. Manufacturing Supercluster
  15. Mining
  16. Printing and Publishing
  17. Transportation and Logistics

How to interpret cluster data

References

Barro, R. J., and X. Sala-i-Martin. 1992. Convergence. Journal of Political Economy 100: 223-251.

Bergman, Edward M., and Edward J. Feser. 2001. Innovation system effects on technological adoption in a regional value chain. European Planning Studies 9 (5): 629-648.

Boots, B. N., and A. Getis 1988. Point patterns analysis. Newbury Park: Sage Publications. Carnegie Mellon Center for Economic Development. 2002. Cluster based community development strategies: A guide for integrating communities with regional industry cluster strategies, draft 4.0.

Chatterji, M. and J. L. Dewhurst 1996. Convergence clubs and relative economic performance in Great Britain: 1977-1991. Regional Studies 30: 31-40.

Cortright, Joseph, and Heike Mayer. 2002. Signs of life: The growth of biotechnology centers in the U.S. Washington, DC: Brookings Institution Center on Urban and Metropolitan Policy

Cortright, J. 2006. Making sense of clusters: Regional competitiveness and economic development. Discussion Paper. Washington, DC: Brookings Institution Metropolitan Policy Program.

Feser, Edward J. 2004. Visioning North Carolina’s Southeast: An analysis of industry cluster trends and opportunities. University of Illinois at Urbana-Champaign.

Feser, Edward J., and Edward M. Bergman. 2000. National industry cluster templates: A framework for applied regional cluster analysis. Regional Studies 34 (1): 1-19.

Fujita, Masahisa, Paul Krugman and Anthony J. Venables. 1999. The spatial economy: Cities, regions, and international trade. MIT Press.

Krugman, Paul. 1991. Geography and trade. MIT Press.

Rosenfeld, Stuart A. 2002. A governor’s guide to cluster-based economic development. Prepared for the National Governors Association Center for Best Practices. Carrboro, North Carolina: Regional Technology Strategies.

Nolan, Christine E. 2003. Hamilton County’s comparative and competitive advantages: Business and industry clusters community COMPASS special research report 3-6. Cincinnati: Hamilton County Regional Planning Commission.

Porter, M. 1990. The competitive advantage of nations. New York: Basic Books.

Porter, M. 2001. Clusters of innovation: Regional foundations of U.S. competitiveness. Available from http://www.usistf.org/download/documents/Clusters-of-Innovation/Clusters-of- Innovation.pdf

Porter, M. E. 2003. The economic performance of regions. Regional Studies 37: 549-678.

Rosenthal, Stuart S., and William C. Strange. 2003. Geography, industrial organization, and agglomeration. The Review of Economics and Statistics 85 (2): 377-393.

Saxenian, AnnaLee. 1996. Regional advantage: Culture and competition in Silicon Valley and Route 128. Harvard University Press.

Sweeney, S. H., and E. J. Feser. 1998. Plant size and clustering of manufacturing activity.Geographical Analysis 30: 45-64.

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