Link, leverage and align | Mirroring the federal government's innovation cluster strategy
I recently heard SBA Administrator and Mainer Karen Mills keynote a panel session about regional innovation clusters at a Washington, D.C., area energy conference. She described her efforts to link, leverage and align the federal government’s agencies behind this economic development approach, which she wrote about in her April 2008 Brookings report (Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economies). Considering the Obama administration’s push for innovation clusters as a core economic development theory, we in Maine could benefit from linking, leveraging and aligning our resources in similar fashion.
Industry clusters can be described as the relative regional intensity of a sector’s ecosystem — the concentration of related organizations and institutions. In addition to the principal cluster actors (producers from that sector), the ecosystem includes innovation, entrepreneurship and economic development organizations: universities, investors, incubators, technology/trade councils, economic and community development organizations, professional services and specialized service firms.
Clusters typically reference vertical markets (e.g. medical devices), though horizontal markets (defense, manufacturing) have cluster characteristics and benefits. And there are several cluster characteristics beyond vertical-horizontal — the paper industry is a mature cluster, clean technology is a growth/innovative cluster, and there are sustaining clusters, emerging clusters and potential clusters.
A cluster is defined by the existence of an ecosystem with sufficient relative density, such as having a larger number of companies and associated entities than other regions. Emerging and potential clusters have elements of the cluster but perhaps not the quantity and/or depth to consider them clusters that sustain a local or regional economy.
Regions looking to promote the development of emerging or potential clusters can do the following to accelerate cluster development:
- Inventory your cluster assets: In New England, three of six states (Maine, Massachusetts and Connecticut) have taken a cluster-informed inventory of their assets, such as companies, work force, universities and early-stage investors. Maine’s research led it to seven target clusters ranging from forestry and agriculture to biotechnology.
- Activate and grow the cluster: An inactive cluster is one whose components are less connected. Activating or accelerating one is a matter of making and sustaining connections through live events, such as conferences and seminars, which engage all players in the cluster, as well as relationship management powered by web, newsletters, social media and mobile.
Trade and/or technology associations can have a central role in cluster activation and development. Regional economic development organizations and institutions are also important actors. Professional service providers — banks, law and accounting firms — provide know-how and services, and are often sponsors and supporters of cluster events. Early-stage equity funds (whether from angel groups or venture capitalists) are more often sector-specific and can activate the small business side of the innovation spectrum.
Outside the lines
Increase the linkages between cluster elements, so goes the theory, and you increase innovation and productivity, and so competitiveness, and drive regional economies forward with high-wage jobs and robust economic activity. So cluster development, it follows, is a matter of increasing the frequency, content and context of interactions.
The thing about clusters is that they really don’t care about political borders. Many clusters’ strengths and weaknesses are shared by regions with a common work force and a common set of business and educational assets. So, while it is necessary and appropriate that governors focus on economic development strategies that are “inside the borders,” they should be cognizant of the shared opportunity for each state in cultivating clusters that straddle borders and regions.
All of northern New England and upstate New York, for example, share a common set of challenges and opportunities stemming from their industrial heritage (paper and textiles) and natural rural assets (wood, wind, solar and water). The recently funded Northern Borders Regional Commission is one multistate initiative designed to focus attention on ways to catalyze growth in the forested regions of those four states.
Regions must mirror, and so take advantage of, the federal government’s focus on innovation clusters. Linking, leveraging and aligning our regional assets will only serve to help our greater New England, and perhaps the entire Northeast corridor, to be a more competitive innovation and economic force delivering jobs and GDP growth that this region and country very much need right now.
Michael Gurau is president of Clear Innovation Partners in Freeport. He can be reached at mgurau@clearinnovationpartners.com. Read more Venture Builder.
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