building regional competitiveness: research highlights and ... · – access to public services and...

Building Regional Competitivenes s :

Res earch Highlights and Implications for Rural Regions

K a ia M ille r, A s la n G lo b a l, In c .P re p a re d fo r:

T h e R u ra l V ita lity C o n fe re n c eK in g s to n , O N TA R IO

M a y 21-23, 2008

Ag e n d a• The Importance of Competitive Rural Regions

• The G lobal Context for Competitivenes s

• A Clos er Look at Rural Regions– Pe rfo rm a n c e a n d Co m p o s itio n– Ev o lu tio n o f Clu s te rs– Bu s in e s s En v iro n m e n t a n d Po lic y– Fu tu re Ch a lle n g e s

• S trategic Implications

5 /1 8 /2 0 0 8 Co p yrig h t As la n Glo b a l, In c . 2 0 0 8 2

Rural Regions Hold Great P otential but Have His torically

Underperformed• 8 0 % o f la n d a re a , 2 0 % o f p o p u la tio n in th e U.S.

– 5 0 % o f p o p u la tio n w o rld w id e

• Ru ra l re g io n s in th e U.S.– Ac c o u n t fo r a s m a ll a n d d e c re a s in g s h a re o f U.S. e m p lo ym e n t (1 4 .2 % in

2 0 0 1 )– Ha v e lo w e r le v e ls o f e c o n o m ic a c tiv ity a n d lo w e r g ro w th ra te s th a n

m e tro p o lita n re g io n s o n a v e ra g e– Ha v e lo w e r a v e ra g e w a g e s (a b o u t 7 0 % o f u rb a n w a g e s ) a n d g a p is

in c re a s in g– Ha v e h ig h e r ra te s o f p o v e rty (g a p is d e c re a s in g )– Pro d u c e fe w e r p a te n ts p e r e m p lo ye e (2 .9 /1 0 ,0 0 0 ru ra l e m p lo ye e s v s .

8 .3 /1 0 ,0 0 0 u rb a n e m p lo ye e s in 2 0 0 1 )


Pe rfo rm a n c e o f ru ra l re g io n s is e xtre m e ly h e te ro g e n e o u s

E ffects of Underproductive Rural Regions

• Sp u rs ru ra l to u rb a n migration– Mo re th a n h a lf o f th e w o rld ’s p o p u la tio n n o w liv e s in u rb a n a re a s , e xp e c te d to ris e to

6 0 % b y 2 0 3 0– 7 5 /8 1 % in d e v e lo p e d c o u n trie s , 4 5 /5 6 % in d e v e lo p in g c o u n trie s– Ec o n o m ic o p p o rtu n itie s ; th e m o s t p ro d u c tiv e w o rk e rs te n d to m ig ra te– Ac c e s s to p u b lic s e rv ic e s a n d in fra s tru c tu re

• Stre s s e s u rb a n infras tructure and public s ervices

• S lows national productivity a n d p ro s p e rity g ro w th– Su b o p tim a l d e p lo ym e n t o f re s o u rc e s (h u m a n , p h ys ic a l, s o c ia l)– In e ffic ie n t s p a tia l d is trib u tio n o f e c o n o m ic a c tiv ity

• Sp u rs d e m a n d s fo r in te rv e n tio n s th a t c a n impede competitivenes s– In e ffic ie n t u s e o f s c a rc e p u b lic fu n d s fo r e c o n o m ic d e v e lo p m e n t

• Th re a te n s cultural heritage

• En v iro n m e n ta l im p a c t


Th e b e n e fits o f h ig h a n d ris in g ru ra l p ro d u c tiv ity e xte n d beyond rural regions .

The P orter Report• Th e e c o n o m ic p e rfo rm a n c e o f ru ra l re g io n s in th e U.S. is

lagging m e tro p o lita n re g io n s , d e s p ite th e s ig n ific a n t e ffo rts to e n h a n c e e c o n o m ic d e v e lo p m e n ts in th e s e a re a s

• Virtu a lly a ll o b s e rv e rs a g re e th a t th e re is a c le a r n e e d to rethink th e e c o n o m ic p o lic y a p p ro a c h e s ta k e n to im p ro v e c o m p e titiv e n e s s in ru ra l re g io n s

• Th e Po rte r re p o rt o ffe rs a broad a s s e s s m e n t o f ru ra l e c o n o m ic d e v e lo p m e n t o v e r th e la s t s e v e ra l d e c a d e s , in c lu d in g a p a rtia l s u rv e y o f th e lite ra tu re a n d th e a n a lys is o f s o m e n e w d a ta (th e In s titu te ’s o n g o in g Clu s te r Ma p p in g Pro je c t)– Dra w s o n b ro a d e r re s e a rc h o n c o m p e titiv e n e s s– Ma n y e xc e lle n t s tu d ie s h a v e fo llo w e d

• In te n t w a s to b e g in a p ro c e s s o f s hifting th e a p p ro a c h to e c o n o m ic d e v e lo p m e n t in ru ra l re g io n s

5 /1 8 /2 0 0 8 5Co p yrig h t As la n Glo b a l, In c . 2 0 0 8

The Changing Nature of International Competition

• Fe w e r b a rrie rs to tra d e a n d in v e s tm e n t• Ra p id ly in c re a s in g s to c k a n d d iffu s io n o f

k n o w le d g e• Co m p e titiv e n e s s u p g ra d in g in m a n y c o u n trie s

• Glo b a liz a tio n o f m a rk e ts• Glo b a liz a tio n o f c a p ita l in v e s tm e n t• Glo b a liz a tio n o f v a lu e c h a in s• In c re a s in g k n o w le d g e a n d s k ill in te n s ity o f

c o m p e titio n• Va lu e m ig ra tin g to th e s e rv ic e c o m p o n e n t o f th e

v a lu e c h a in

Drivers

Marketreaction

• Im p ro v in g c o m p e titiv e n e s s is increas ingly es s ential to p ro s p e rity c re a tio nSo u rc e : Mic h a e l E. Po rte r, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

What is Competitivenes s ?

P roductivity

Innovative CapacityInnovative Capacity

P ros perity

Th e m o s t im p o rta n t s o u rc e s o f p ro s p e rity a re created n o t in h e rite d Pro d u c tiv ity d o e s n o t d e p e n d o n what in d u s trie s a re g io n c o m p e te s in , b u t o n

how it c o m p e te s Th e p ro s p e rity o f a re g io n d e p e n d s o n th e p ro d u c tiv ity o f all its in d u s trie s In n o v a tio n is v ita l fo r long-term increas es in p ro d u c tiv ity in a d v a n c e d

e c o n o m ie s

“C o m p e titiv e ne s s ”

5 /1 8 /2 0 0 8 8Co p yrig h t As la n Glo b a l, In c . 2 0 0 8So u rc e : Mic h a e l E. Po rte r, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

Meas ures of Regional E conomic P erformance

•Current E conomic P erformance Innovation P erformance

• Em p lo ym e n t / Em p lo ym e n t Gro w th

• Wo rk fo rc e p a rtic ip a tio n

• Un e m p lo ym e n t ra te

• Av e ra g e Wa g e s / Av e ra g e Wa g e Gro w th

• Co s t o f Liv in g

• Po v e rty Ra te

• Gro s s re g io n a l p ro d u c t p e r e m p lo ye e

• Re g io n a l e xp o rt le v e ls / An n u a l g ro w th in e xp o rts

• In w a rd b u s in e s s in v e s tm e n t

• Pa te n ts / Pa te n t Gro w th

• Ve n tu re c a p ita l in v e s tm e n ts

• Ne w Es ta b lis h m e n ts / Ne w Es ta b lis h m e n t Gro w th

• Fa s t g ro w th firm s

• In itia l p u b lic o ffe rin g p ro c e e d s p e r 1 ,0 0 0 firm s

5 /1 8 /2 0 0 8 9Co p yrig h t As la n Glo b a l, In c . 2 0 0 8So u rc e : Mic h a e l E. Po rte r, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

Determinants of Regional Competitivenes sContext for

F irm S trategy

and Rivalry

Related and S upporting Indus tries

F actor(Input)

Conditions

Demand Conditions

S ophis ticated and demanding lo c a l c u s to m e r(s )

Lo c a l c u s to m e r n e e d s th a t anticipate th o s e e ls e w h e re

Un u s u a l lo c a l d e m a n d in s pecialized s egments th a t c a n b e s e rv e d n a tio n a lly a n d g lo b a lly

P res ence of high quality, s pecialized inputs a v a ila b le to firm s

– Hu m a n re s o u rc e s– Ca p ita l re s o u rc e s– Ph ys ic a l in fra s tru c tu re– Ad m in is tra tiv e in fra s tru c tu re– In fo rm a tio n in fra s tru c tu re– Sc ie n tific a n d te c h n o lo g ic a l

in fra s tru c tu re– Na tu ra l re s o u rc e s

Ac c e s s to c a p a b le , lo c a lly b a s e d s uppliers a n d firm s in related fields

Pre s e n c e o f clus ters in s te a d o f is o la te d in d u s trie s

A lo c a l c o n te xt a n d ru le s th a t e n c o u ra g e inves tment a n d s us tained upgrading

– e .g ., In te lle c tu a l p ro p e rty p ro te c tio n

Meritocratic in c e n tiv e s ys te m s a c ro s s a ll m a jo r in s titu tio n s

Op e n a n d v ig o ro u s c o m p e titio n a m o n g locally bas ed rivals

5 /1 8 /2 0 0 8 1 0Co p yrig h t As la n Glo b a l, In c . 2 0 0 8So u rc e : Mic h a e l E. Po rte r, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

G overnment IF Cs

c

Se g u ro s

Ca p ita l d eTra b a jo

De n s id a dAp íc o la

Pro te c c ió nJu rid ic a

In v e s tig a c ió n y De s a rro llo

Cu ltiv o y Co s e c h a

Co n tro l d eEn fe rm a d a d e s

Ro p a p ro te c tiv a

Fin a n c ie roFin a n c ie ro

Ag ric u lto rAg ric u lto r

Pro d u c c ió n d e Mie l

Fu e n te : En tre v is ta s d e Mo n ito r

Pro c e s o d e Mie l Dis trib u c ió n Co n e xa s

Ca m io n e s

Co m p a ñ ía s d eTra n s p o rte

In fra e s tru c tu raVia ll

Tra n s p o rteTra n s p o rte

En e rg ía

Pro c e s oHig é n ic o

Ma q u in a riaEm b o te lla d o ra

Pro c e s oPro c e s o

Ma q . Co n tro lCa lid a d

La b o ra to rio sd e An á lis is

Ma q u in a riad e Pro c e s o

Dis trib u c ió nDis trib u c ió nCa n a le s d e Ve n ta s

Me rc a d e oin te rn a c io n a l

Me rc a d e oNa c io n a l

Ta rro s ,e n v a s e s , b o te lla s

Ce rtific a c ió n d e c a lid a d c o m o p a ís

Eq u ip o d eCa rg a

Exp o rta c ió nExp o rta c ió nIn fo rm a c ió nd e Clie n te s

Ma n te n im ie n to

Pu e rto s

Du lc e s ,c o n fite ría

Ca n d e la sd e c o ra tiv a s

Co n e xa sCo n e xa s

Mie l b á s ic a

Ja le a re a l

Po le n

Ce ra

Pro p ó le o

Re in a s a b e ja s

Pro d u c to sPro d u c to s

Ve n e n o

Fa rm a c é u tic o s

Co s m é tic o s

G U IA :N o e x is te

P ro c e d e n c ia e x tra n je ra

Alim e n ta c ió n (a z ú c a r)

Impacto de las Opciones E s tratégicas en la P lataforma Actual

E s tructura del Clus ter ActualNo s a tis fa c to rio

Ca p ita l fijo Em p a q u e

Re c u rs o sm e lífe ro s

E c o n o m ic G ro w thE c o n o m ic G ro w th S o c ia l E q u ityS o c ia l E q u ity

S u s ta in a b ilityS u s ta in a b ility P ro d u c tiv ityP ro d u c tiv ity

E conomic Growth through S ocial E quity

In v e s tm e n t in Hu m a n Ca p ita l

Ca p a c ity to Tra d e Diffe re n tia te d

Pro d u c ts

Pro s p e rity

Ab ility to In n o v a te

So u rc e : Ka ia Mille r, El Sa lv a d o r Na tio n a l Co m p e titiv e n e s s Pro g ra m

No te : 2 0 0 1 d a ta , e xc e p t re la tiv e p ro d u c tiv ity w h ic h is 1 9 9 7 d a ta .So u rc e : Clu s te r Ma p p in g Pro je c t, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

Compos ition of Regional E conomies United S tates

Traded Clus ters Local Clus tersLocal Clus ters Natural Res ource-Natural Res ource-Driven Indus triesDriven Indus tries

31.6%1.7%

$46,596133.85.0%

144.1

21.3

590

67.6%67.6%2.8%2.8%

$28,288$28,28884 .284 .23.6%3.6%

79.379 .3

1.31.3

241241

0.8%0.8%-1.0%-1.0%

$33,245$33,24599.099.01.9%1.9%

140.1140.1

7.07.0

4848

S hare of E mploymentE mployment Growth, 1990

to 2001

Average WageRelative Wage

Wage Growth

Relative P roductivity

P atents per 10,000 E mployees

Number of S IC Indus tries

5 /1 8 /2 0 0 8 1 3Co p yrig h t As la n Glo b a l, In c . 2 0 0 8





5 /1 8 /2 0 0 8 Co p yrig h t As la n Glo b a l, In c . 2 0 0 8 1 4

$23,377

$17,144

$36,376

$24,648

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Metro Rural

19902001

E conomic P erformance of Rural and Metropolitan Regions

Re la tiv e Wa g e Gro w th , 1 9 9 0 -2 0 0 1

So u rc e : Clu s te r Ma p p in g Pro je c t, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

C A G R ’90-’01 4 .10%

C A G R ’90-’01 3 .36%


Em p lo ym e n t, 1 9 9 0 -2 0 0 1


75,000,000

80,000,000

85,000,000

90,000,000

95,000,000

100,000,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 200112,000,000

12,500,000

13,000,000

13,500,000

14,000,000

14,500,000

15,000,000

15,500,000

16,000,000

16,500,000

17,000,000

Metro Rural

• Ru ra l re g io n s in 2 0 0 1 a c c o u n te d fo r 1 4 .2 % o f n a tio n a l e m p lo ym e n t, v irtu a lly u n c h a n g e d fro m 1 9 9 0

Me tro CAGR 1 9 9 0 -2 0 0 1 :

1 .8 6 %

Ru ra l CAGR 1 9 9 0 -2 0 0 1 :

1 .8 1 %

E ffects of P roximity to Urban Centers Me tro , Ad ja c e n t a n d Dis ta n t Co u n tie s

Me tro

Ad ja c e n t

Dis ta n t

5 /1 8 /2 0 0 8 1 7Co p yrig h t As la n Glo b a l, In c . 2 0 0 8So u rc e : Clu s te r Ma p p in g Pro je c t, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

$23,377

$17,567 $16,705

$25,325$23,946

$36,376

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Metro Adjacent Rural Distant Rural

19902001

Relative Wage Growth 1990-2001Ad ja c e n t a n d Dis ta n t Ru ra l Re g io n s


C A G R ’90-’01 3 .38%

C A G R ’90-’01 3 .33%

C A G R ’90-’01 4 .32%

1.86%1.79% 1.82%

0.0%

1.0%

2.0%

Metro Adjacent Distant

Emp CAGR


Re la tiv e Em p lo ym e n t Gro w th , 1 9 9 0 -2 0 0 1


The P erformance of Rural RegionsRu ra l Po rtio n s o f Ec o n o m ic Are a s

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

$15,000 $17,000 $19,000 $21,000 $23,000 $25,000 $27,000 $29,000 $31,000 $33,000 $35,000

Ann

ual W

age

Gro

wth

, 199

0-20

01

Average Wage, 2001

Av e ra g e No n -Me tro Wa g e Gro w th : 3 .3 6 %

Av e ra g e No n -Me tro Wa g e : $ 2 4 ,6 4 8

Low Wage but S trong Wage G rowth (57 E As )

High Wage and S trong Wage G rowth(27 E As )

Low Wage and Weak Wage G rowth (48 E As )

High Wage but Weak Wage G rowth(37 E As ) Wh e e lin g , WV-OH

An c h o ra g e , AK

Ba to n Ro u g e , LA-MS

Ro c h e s te r, NY-PA

Sio u x City, IA-NE-SD

La fa ye tte , LA

Da yto n -Sp rin g fie ld , OH

Sa ra s o ta -Bra d e n to n , FL

De n v e r-Bo u ld e r-Gre e le y, CO-KS-NESa n ta Fe , NM

Fa ye tte v ille -Sp rin g d a le -Ro g e rs , AR-MO-OK

Mc Alle n -Ed in b u rg h -Mis s io n , TX

Mo n ro e , LA

Fre s n o , CA

El Pa s o , TX-NM

Fo rt Sm ith , AR-OK

Bis m a rc k , ND-MT-SDFa rg o -Mo o rh e a d , ND-MN


Compos ition of Regional E conomiesRu ra l v s . Me tro Re g io n s

Indicator Rural Metro Rural Metro Rural Metro

Share of Employment 32.6% 32.5% 64.2% 67.1% 3.2% 0.4%

Employment Growth, 1990 to 2001 1.2% 1.7% 2.8% 2.6% (0.5)% (2.1)%

Average Wage $26,481 $50,746 $19,401 $29,126 $33,186 $37,260

Wage Growth 4.0% 5.3% 3.5% 3.8% 2.4% 3.4%

Establishment Formation 3.5% 4.0% 2.0% 2.1% (0.2)% (0.3)%

Patents per 10,000 Employees 7.8 22.5 0.5 1.4 1.0 14.5

Number of SIC Industries 590 590 241 241 48 48

Trad e d C lus te rs Lo c al C lus te rsNatural Re s o urc e -Driv e n Ind us trie s


5,000,000

5,200,000

5,400,000

5,600,000

5,800,000

6,000,000

6,200,000

6,400,000

6,600,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 200125,000,000

26,000,000

27,000,000

28,000,000

29,000,000

30,000,000

31,000,000

32,000,000

Rural

Metro

Annual Traded E mployment Levels , 1990-2001Metro vs . Rural Areas

MetroRural


The Role of Clus ters in Rural Regions

• Clu s te rs a re evident in ru ra l re g io n s a s w e ll a s in m e tro p o lita n re g io n s a n d g e n e ra te e q u iv a le n t economic benefits

C as e s tudy examples :

• Gib b s a n d Be rn a t fin d e c o n o m ic b e n e fits o f s tro n g ru ra l c lu s te rs – A w o rk e r in a ru ra l-c lu s te r firm te n d s to e a rn 1 3 % m o re o n a v e ra g e th a n a

w o rk e r in a n o n -c lu s te r firm – Clu s te rin g c re a te s h ig h e r p ro d u c tiv ity d u e to fa s te r in fo rm a tio n flo w s , h ig h e r

s k ill a c c u m u la tio n , a n d h ig h e r w a g e s . – Re a liz in g th e b e n e fits d e p e n d s o n th e c o m m u n ity's a b ility to a ttra c t a n d

s u s ta in a c lu s te r

• He n ry, Ba rk le y, a n d Zh a n g fin d b e n e fits o f c lu s te rin g in th e TVA re g io n – A p o s itiv e a s s o c ia tio n e xis ts b e tw e e n c lu s te rin g a n d ru ra l in c o m e c h a n g e– Div e rs ific a tio n a n d b a la n c e d g ro w th s tra te g ie s a re n e e d e d th a t ta ilo r s p e c ific

p ro m o tio n p o lic ie s to s p e c ific in d u s trie s


0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000Na

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Fore

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Fish

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Pro

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Light

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Spor

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Compos ition of E mployment by Traded Clus ter

Ru ra l v s . Me tro Co u n tie s

Em

plo

ymen

t 20

01

No te : Fo r th e p u rp o s e s o f th is a n a lys is , Na tu ra l En d o w m e n t De p e n d e n t in d u s trie s h a v e b e e n g ro u p e d to g e th e r a s a s in g le c lu s te r.

Traded E mployment 2001

Rural: 6 ,214,682

Metro: 31,782,660

5 /1 8 /2 0 0 8 2 4So u rc e : Clu s te r Ma p p in g Pro je c t, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

Compos ition of E mployment by Traded Clus terRelative S pecialization of Rural vs . Metro Counties

Em

ploy

men

t as

a P

erce

nt

of T

ota

l Tra

ded

200

1, N

on-M

etro

- M

etro

No te : Fo r th e p u rp o s e s o f th is a n a lys is , Na tu ra l En d o w m e n t De p e n d e n t in d u s trie s h a v e b e e n in c lu d e d a s a tra d e d c lu s te r.

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Natu

ral E

ndow

men

t Dep

ende

nt

Proc

esse

d Fo

od

Auto

mot

ive

Texti

les

Fore

st Pr

oduc

ts

Furn

iture

Heav

y Mac

hiner

y

Mot

or D

riven

Pro

ducts

Build

ing F

ixtur

es, E

quipm

ent a

nd S

ervic

es Appa

rel

Pref

abric

ated

Enc

losur

es

Met

al M

anuf

actu

ring

Agric

ultur

al Pr

oduc

ts

Heav

y Con

struc

tion

Serv

ices

Cons

tructi

on M

ater

ials

Plas

tics

Prod

uctio

n Te

chno

logy

Oil a

nd G

as P

rodu

cts a

nd S

ervic

es

Powe

r Gen

erat

ion a

nd T

rans

miss

ion

Hosp

itality

and

Tou

rism

Fish

ing a

nd F

ishing

Pro

ducts

Leat

her a

nd R

elate

d Pr

oduc

ts

Light

ing a

nd E

lectri

cal E

quipm

ent

Spor

ting,

Rec

reat

ional

and

Child

ren's

Goo

ds

Chem

ical P

rodu

cts

Foot

wear

Toba

cco

Aero

spac

e En

gines

Jewe

lry a

nd P

recio

us M

etals

Biop

harm

aceu

ticals

Med

ical D

evice

s

Ente

rtainm

ent

Com

mun

icatio

ns E

quipm

ent

Publi

shing

and

Prin

ting

Aero

spac

e Ve

hicles

and

Def

ense

Analy

tical

Instr

umen

ts

Distr

ibutio

n Se

rvice

s

Info

rmat

ion T

echn

ology

Educ

ation

and

Kno

wled

ge C

reat

ion

Tran

spor

tatio

n an

d Lo

gistic

s

Fina

ncial

Ser

vices

Busin

ess S

ervic

es

Rural economies relatively more s pecialized

Rural economies relatively les s s pecialized

5 /1 8 /2 0 0 8 2 5So u rc e : Clu s te r Ma p p in g Pro je c t, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

No te : Fo r th e p u rp o s e s o f th is a n a lys is , n a tu ra l-re s o u rc e d e p e n d e n t in d u s trie s h a v e b e e n in c lu d e d a s a s in g le tra d e d c lu s te r.

J ob Creation by Traded Clus ter, 1990-2001 Rural Counties

CA

GR

of

Em

ploy

men

t 19

90-

2001

(250,000)

(200,000)

(150,000)

(100,000)

(50,000)

-

50,000

100,000

150,000

200,000Bu

sines

s Se

rvice

s

Hosp

itality

and

Tou

rism

Heav

y Co

nstru

ctio

n Se

rvice

s

Auto

mot

ive

Ente

rtain

men

t

Educ

atio

n an

d Kn

owle

dge

Crea

tion

Proc

esse

d Fo

od

Fina

ncia

l Ser

vices

Met

al M

anuf

actu

ring

Dist

ribut

ion S

ervic

es

Plas

tics

Build

ing

Fixt

ures

, Equ

ipm

ent a

nd S

ervic

es

Powe

r Gen

erat

ion a

nd T

rans

miss

ion

Pref

abric

ated

Enc

losu

res

Prod

uctio

n Te

chno

logy

Tran

spor

tatio

n an

d Lo

gist

ics

Agric

ultu

ral P

rodu

cts

Publ

ishin

g an

d Pr

intin

g

Med

ical D

evice

s

Biop

harm

aceu

ticals

Info

rmat

ion

Tech

nolo

gy

Anal

ytica

l Ins

trum

ents

Fore

st P

rodu

cts

Com

mun

icatio

ns E

quip

men

t

Jewe

lry a

nd P

recio

us M

etal

s

Cons

truct

ion

Mat

erial

s

Heav

y M

achi

nery

Toba

cco

Fish

ing a

nd F

ishin

g Pr

oduc

ts

Spor

ting,

Rec

reat

iona

l and

Chi

ldre

n's G

oods

Leat

her a

nd R

elat

ed P

rodu

cts

Furn

iture

Aero

spac

e En

gine

s

Oil a

nd G

as P

rodu

cts

and

Serv

ices

Ligh

ting

and

Elec

trica

l Equ

ipm

ent

Aero

spac

e Ve

hicle

s an

d De

fens

e

Mot

or D

riven

Pro

duct

s

Chem

ical P

rodu

cts

Foot

wear

Natu

ral E

ndow

men

t Dep

ende

nt

Text

iles

Appa

rel

Net Traded J ob Creation, 1990-2001

Rural: + 784,612

- 385,661


No te : Fo r th e p u rp o s e s o f th is a n a lys is , n a tu ra l-re s o u rc e d e p e n d e n t in d u s trie s h a v e b e e n in c lu d e d a s a s in g le tra d e d c lu s te r.

Growth in E mployment by Traded Clus ter Rural vs . Metro Counties

CA

GR

of

Em

ploy

men

t 19

90-2

001,

Rur

al v

ersu

s M

etro

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

Toba

cco

Biop

harm

aceu

ticals

Auto

mot

ive

Aero

spac

e En

gines

Analy

tical

Inst

rum

ents

Leat

her a

nd R

elate

d Pr

oduc

ts

Aero

spac

e Ve

hicles

and

Def

ense

Met

al M

anuf

actu

ring

Jewe

lry a

nd P

recio

us M

etals

Proc

esse

d Fo

od

Powe

r Gen

erat

ion a

nd T

rans

miss

ion

Pref

abric

ated

Enc

losur

es

Natu

ral E

ndow

men

t Dep

ende

nt

Fore

st P

rodu

cts

Prod

uctio

n Te

chno

logy

Ente

rtainm

ent

Com

mun

icatio

ns E

quipm

ent

Heav

y Co

nstru

ction

Ser

vices

Fish

ing a

nd F

ishing

Pro

duct

s

Publi

shing

and

Prin

ting

Heav

y M

achin

ery

Chem

ical P

rodu

cts

Hosp

itality

and

Tou

rism

Busin

ess

Serv

ices

Build

ing F

ixtur

es, E

quipm

ent a

nd S

ervic

es Plas

tics

Agric

ultur

al Pr

oduc

ts

Med

ical D

evice

s

Mot

or D

riven

Pro

duct

s

Furn

iture

Fina

ncial

Ser

vices

Text

iles

Educ

ation

and

Kno

wled

ge C

reat

ion

Spor

ting,

Rec

reat

ional

and

Child

ren's

Goo

ds

Light

ing a

nd E

lectri

cal E

quipm

ent

Cons

tructi

on M

ater

ials

Info

rmat

ion T

echn

ology

Oil a

nd G

as P

rodu

cts a

nd S

ervic

es

Tran

spor

tatio

n an

d Lo

gistic

s

Dist

ribut

ion S

ervic

es

Appa

rel

Foot

wear

Rural re g io ns im p ro v e d p o s itio n

Rural re g io ns lo s t p o s itio n


Me tro Co u n tie s

Ad ja c e n t Co u n tie s

Dis ta n t Co u n tie s

Textile E mploymentLe a d in g Co u n tie s


Rural Metro

18.1% 17.8%

8.0%

26.2%

1.3%2.0%

8.9%

1.8% 1.4%

6.1%

2.9%

5.5%5.9%

9.3%

6.7%

25.0%

1.5%

3.0%

10.3%

4.9% 4.6%

9.7%

7.1%

12.0%

0%

5%

10%

15%

20%

25%

30%

Carpets andRugs

Yarn andThread Mills

Wool Mills Fabric Mills Tire Cord andFabrics

Women's andChildren'sUnderwear

Fibers SpecialtyFabric

Processing

TextileMachinery

SpecialtyApparel

Components

FinishingPlants

SpecialtyFabric Mills

Sub

clu

ster

Em

ploy

men

t as

Per

cent

of

Clu

ster

Em

plo

ymen

t 20

01

Textile E mployment by S ub-clus ter Ru ra l v e rs u s Me tro p o lita n Re g io n s



IT E mployment by S ub-clus terRu ra l v e rs u s Me tro p o lita n Re g io n s

Non-Metro Metro

22.6%

16.4%

8.4%

28.4%

24.3%

12.8%

6.6%7.8%

37.7%

35.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Peripherals Communications Services Computers Software Electronic Components andAssemblies

Sub

clu

ster

Em

ploy

men

t as

Per

cent

of

Clu

ster

Em

plo

ymen

t 20

01


S pecialization of Regional E conomiesS elect U.S . G eographic Areas

Bos tonAn a lytic a l In s tru m e n tsEd u c a tio n a n d Kn o w le d g e Cre a tio nCo m m u n ic a tio n s Eq u ip m e n t

Los Angeles AreaAp p a re lBu ild in g Fixtu re s ,

Eq u ip m e n t a n d Se rv ic e s

En te rta in m e n t

ChicagoCo m m u n ic a tio n s Eq u ip m e n tPro c e s s e d Fo o dHe a v y Ma c h in e ry

Denver, COLe a th e r a n d Sp o rtin g Go o d sOil a n d Ga sAe ro s p a c e Ve h ic le s a n d De fe n s e

S an DiegoLe a th e r a n d Sp o rtin g Go o d sPo w e r Ge n e ra tio nEd u c a tio n a n d Kn o w le d g e Cre a tio n

S an F rancis co-Oakland-S an J os e Bay AreaCo m m u n ic a tio n s Eq u ip m e n tAg ric u ltu ra l Pro d u c tsIn fo rm a tio n Te c h n o lo g y

S eattle-Bellevue-E verett, WAAe ro s p a c e Ve h ic le s a n d De fe n s eFis h in g a n d Fis h in g Pro d u c tsAn a lytic a l In s tru m e n ts

Hous tonHe a v y Co n s tru c tio n Se rv ic e sOil a n d Ga sAe ro s p a c e Ve h ic le s a n d De fe n s e

P itts burgh, P ACo n s tru c tio n Ma te ria lsMe ta l Ma n u fa c tu rin gEd u c a tio n a n d Kn o w le d g e

Cre a tio n

Atlanta, G ACo n s tru c tio n Ma te ria lsTra n s p o rta tio n a n d Lo g is tic sBu s in e s s Se rv ic e s

Raleigh-Durham, NCCo m m u n ic a tio n s Eq u ip m e n tIn fo rm a tio n Te c h n o lo g yEd u c a tio n a n dKn o w le d g e Cre a tio n

Wichita, KSAe ro s p a c e Ve h ic le s a n d

De fe n s eHe a v y Ma c h in e ryOil a n d Ga s

No te : Clu s te rs lis te d a re th e th re e h ig h e s t ra n k in g c lu s te rs in te rm s o f s h a re o f n a tio n a l e m p lo ym e n tSo u rc e : Clu s te r Ma p p in g Pro je c t, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l


Regional Clus ters in Yemen

Fis h e rie s

To u ris m

Ag ri-c u ltu re

Fis h e rie s

F is heries

(s hrimp and

lobs ter)

Touris m

Ag ri-c u ltu re

To u ris m

To u ris m

Trans -port and Log is tic

s

Touris m

Touris m

Ag ri-c u ltu re

Quar-rying

C o p y rig h t 2006 A S L A N G lo b a l

G eography

F is h Res erves

Oil and G as

The Ongoing E volution of Mukallah’s Clus ters

>1880 1920 1960 1980 2010

Ho s p itality and To uris m

Mulit-m o d al Trans p o rtatio n and Lo g is tic s

F is h and F ood P roces s ing

Agriculture

F is heries

Import and E xport S ervices

Maritime S ervices / Trans hipments

P etrochemicals

Mining / Quarrying

Cons truction

So u rc e : Ad a p te d fro m Mic h a e l E. Po rte r, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Un iv e rs ity

E xpatriates

B anking and Financ e

Re al E s tate S e rv ic e s

Co p yrig h t Ka ia Mille r, As la n Glo b a l, 2 0 0 7





5 /1 8 /2 0 0 8 Co p yrig h t As la n Glo b a l, In c . 2 0 0 8 3 4

P olicy for E conomic Development in Rural Regions

The Need for a New Model• Ru ra l e c o n o m ic d e v e lo p m e n t s h o u ld fo c u s o n th e unique s tre n g th s o f e a c h a re a , ra th e r th a n c o n c e n tra tin g o n a m e lio ra tin g g e n e ric w e a k n e s s e s– Ru ra l a re a s w ill n e v e r m a tc h u rb a n in fra s tru c tu re , s e rv ic e s , a n d a m e n itie s

• Th e a p p ro p ria te e c o n o m ic u n it fo r s tra te g y p u rp o s e s m u s t in c lu d e n o t o n ly ru ra l a re a s b u t a ls o adjacent urban centers

• Ru ra l e c o n o m ic d e v e lo p m e n t s h o u ld addres s and harnes s the efficient s patial dis tribution o f e c o n o m ic a c tiv ity ra th e r th a n a tte m p t to re p lic a te u rb a n e c o n o m ie s

• A s ingle n a tio n a l ru ra l p o lic y is u n lik e ly to b e m e a n in g fu l a n d s u c c e s s fu l

• Ea c h c o m m u n ity s h o u ld b e a r res pons ibility fo r its e c o n o m ic s u c c e s s , n o t th e fe d e ra l g o v e rn m e n t

• Th e fe d e ra l a n d s ta te g o v e rn m e n ts n e e d to p ro v id e ru ra l re g io n s w ith th e n e c e s s a ry tools a n d financing mechanis ms to d e v e lo p a n d e xe c u te a n e ffe c tiv e s tra te g y– Stra te g ic p la n n in g m e th o d o lo g y a n d b e n c h m a rk in g in fo rm a tio n– Pro g ra m s a n d m a tc h in g fu n d s to e n a b le c o m m u n itie s to p u rs u e im p ro v e m e n ts (e .g .,

c o n n e c tiv ity, e d u c a tio n , tra n s p o rt p la n n in g , e tc .)

5 /1 8 /2 0 0 8 3 5Co p yrig h t As la n Glo b a l, In c . 2 0 0 8So u rc e : Mic h a e l E. Po rte r, “Co m p e titiv e n e s s in Ru ra l U.S. Re g io n s ”

Ins titutional S tructures for Rural E conomic Development

• Pa s t in s titu tio n a l s tru c tu re s h a v e la rg e ly failed to d e v e lo p p o lic ie s th a t m o b iliz e th e p o te n tia l o f ru ra l re g io n s

• Th e c u rre n t in s titu tio n a l fra m e w o rk fo r ru ra l p o lic y is fragmented a n d uncoordinated, a n d n e e d s to b e ra d ic a lly re s tru c tu re d– Th e fo c u s o f ru ra l p o lic y in s titu tio n s a ro u n d a g ric u ltu re is

p a rtic u la rly c o u n te rp ro d u c tiv e

• Th e c re a tio n o f ru ra l-s p e c ific in s titu tio n s ru n s th e ris k o f fu rth e r is olating ru ra l a re a s ra th e r th a n in te g ra tin g th e m in to re g io n a l e c o n o m ie s . Exis tin g in s titu tio n s m u s t h a v e a c h a rte r th e in c lu d e s s tra te g ic p la n n in g in v o lv in g a d ja c e n t u rb a n a re a s

• Ap p ro p ria te p ro c e s s e s fo r e c o n o m ic d e v e lo p m e n t fo r ru ra l a re a s , a n d m u s t in c lu d e p ro m in e n t roles fo r b u s in e s s , c o lle g e s a n d u n iv e rs itie s , a n d o th e r c o n s titu e n c ie s , in a d d itio n to g o v e rn m e n t

5 /1 8 /2 0 0 8 3 6Co p yrig h t As la n Glo b a l, In c . 2 0 0 8So u rc e : Mic h a e l E. Po rte r, “Co m p e titiv e n e s s in Ru ra l U.S. Re g io n s ”

Creating and Implementing a Regional E conomic S trategy

• A s h a re d economic vis ion h e lp s e lic it b ro a d s u p p o rt a n d c o o rd in a te a c tiv itie s

• Stro n g leaders hip is a n e c e s s a ry p a rt o f a n y s u c c e s s fu l e c o n o m ic d e v e lo p m e n t s tra te g y

• Rig o ro u s s trategic analys is is a n im p o rta n t e a rly s te p in im p le m e n tin g a re g io n a l s tra te g y

• Bro a d -b a s e d collaboration a m o n g in s titu tio n s a n d c o n s titu e n c ie s is n e e d e d fo r d e v e lo p m e n t s tra te g ie s to s u c c e e d

• An o v e ra rc h in g organization fo r e c o n o m ic d e v e lo p m e n t h e lp s c o o rd in a te a n d ro u tin iz e th e p ro c e s s

• A clus ter-bas ed approach is e s s e n tia l to e n g a g e th e p riv a te s e c to r

5 /1 8 /2 0 0 8 3 7Co p yrig h t As la n Glo b a l, In c . 2 0 0 8So u rc e : Mic h a e l E. Po rte r, In s titu te fo r Stra te g y a n d Co m p e titiv e n e s s , Ha rv a rd Bu s in e s s Sc h o o l

So m e Im p lic a tio n sWh a t is Un iq u e a b o u t Rw a n d a ?

Toward A Rwandan E conomic S trategy

• Co rru p tio n -fre e• Sta b le w ith s o c ia l p ro g re s s• Se c u re• Cle a n• Re s p o n s iv e• Un iq u e c lim a te a n d g ro w in g

c o n d itio n s• Ce n tra l lo c a tio n o n th e Afric a n

c o n tin e n t• Gro w in g p o s itio n in te a , c o ffe e ,

to u ris m• Op p o rtu n ity to le a d th e re g io n in ICT

a n d s e rv ic e s

• Rw a n d a m u s t a c c e le ra te im p ro v e m e n t o f s k ills a n d b u s in e s s in fra s tru c tu re , im p ro v e th e e a s e o f d o in g b u s in e s s , a n d tra n s fo rm Kig a li

• Rw a n d a s h o u ld s e iz e th e o p p o rtu n ity to tra n s fo rm a g ric u ltu re

• Rw a n d a is u n lik e ly to b e c o m p e titiv e in e xp o rtin g b u lk y g o o d s w ith lo w v a lu e -to -w e ig h t

• Air fre ig h t a n d s e rv ic e s e xp o rts n u llify Rw a n d a ’s lo g is tic a l d is a d v a n ta g e s

• Rw a n d a m u s t c re a te a p o s itiv e im a g e fo r e c o n o m ic a n d s o c ia l d e v e lo p m e n t

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