industry clusters and innovation
TRANSCRIPT
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Industry ClustersIndustry Clustersand Innovationand Innovation
March 2005
www.ImpresaConsulting.com
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RoadmapRoadmap
Visualizing the EconomyUnderstanding ClustersIdentifying Oregon’s ClustersWhat to do
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I. Visualizing the EconomyI. Visualizing the Economy
What’s your mental image?
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Picturing the Oregon EconomyPicturing the Oregon Economy
80,000 Businesses with a Payroll
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by Geographic Locationby Geographic Location
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by Business Sizeby Business Size
Large Business
Medium Business
Small Businesses
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by Industry Clusterby Industry ClusterWood Products Electronics Metals Food Software
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II. Understanding ClustersII. Understanding Clusters
What are they? How do they work?
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What Kind of Economy?What Kind of Economy?
While most jobs and businesses in every state area are the same
Restaurants, grocery stores, hospitals, beauty salons,
About a third differs: Traded sector
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Traded Sector Drives GrowthTraded Sector Drives Growth
Traded/Export Sector
Suppliers
Local
Sales to the rest of the world
Most jobs are here: schools, hospitals, grocery stores, restaurants
But firms in this sector drive the economy
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Strategies DifferStrategies Differ
Traded/Export Sector
Suppliers
Local
Build Cluster Competitiveness
Promote Efficiency & World Class Suppliers
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Clustering is CriticalClustering is Critical
Traded sector success isn’t randomSimilar and related businesses draw
advantages from proximityPlaces specializeClustering holds for most “traded”
goods: autos, carpets, RVs, others
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DefinitionDefinition
Cluster: A geographically bounded group of similar or related firms--connected by common markets, technologies or knowledge--their suppliers, their skilled workers and supporting institutions
Traded sector: selling goods and services in national or international markets
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What makes Clusters Tick?What makes Clusters Tick?
Rivalry & Cooperation
Customers
Suppliers
Inputs
Source: Michael Porter, Harvard Business School
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Oregon’s Microbrew ClusterOregon’s Microbrew Cluster
Competition & Brewer’s Guild
Savvy Beer Drinkers,HomebrewersSmall Restaurants
Equipment Makers,Creative Services
Hops, Water,Brewmasters
RivalryRivalry
SuppliersSuppliers
CustomersCustomersInputsInputs
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An Oregon ClusterAn Oregon Cluster
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SuppliersSuppliers
Wine and Brewing Supplies
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SemiconductorsSemiconductor Manufacturing
Equipment/Electronic Design AutomationSilicon WafersPrintersComputersDisplay & Imaging Technology
High Tech StrengthsHigh Tech Strengths
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High Tech ClustersHigh Tech Clusters
Seattle- SoftwarePortland
- Semiconductors- SME/EDA- Display- Computers
Silicon Valleyeverything!
San Diego- Communications
Austin- Semiconductors- Computers- SME
Salt Lake City- Software- Medical Devices- Storage Technology
Sacramento- Computers
Minneapolis- Computers- Medical Devices
Boston- Computers
Research Triangle Park- Software
Denver- Telecommunications- Satellite- Storage
Atlanta- Database- Telecommunications
Phoenix- Semiconductors
© Impresa, Inc. 2002 -- www.impresaconsulting.com
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The Ecology of the Silicon ForestThe Ecology of the Silicon Forest
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Signs of LifeSigns of Life
The Growth of Biotechnology Centersin the United States
Brookings Institution
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Clusters Create IdeasClusters Create Ideas
Clusters are places where people turn ideas into businesses– Better– Faster– More Reliably
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III. Identifying ClustersIII. Identifying Clusters
What are Oregon’s Clusters?
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Criteria for Identifying ClustersCriteria for Identifying Clusters
More Concentrated– Location Quotient
Faster Growing– Outperformed Same Industry Nationally
Higher Paid– Exceds US average for same industry
Groups of Industries in which Oregon is:
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Oregon ClustersOregon Clusters
Industry Cluster JobsHigh Technology/Software 66,850 Forest/Wood/Paper Products 62,412 Food Processing 48,208 Apparel/Sporting Goods 18,413 Transportation Equipment 14,972Creative Services 16,345Recreation 11,907Metals 9,215Nursery Products 10,247Professional Services 4,417Biomedical 3,404
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Define regionDefine region
Identify Key PartnersIdentify Key Partners
Quantitative AnalysisQuantitative Analysis
Qualitative AnalysisQualitative Analysis Competitiveness AnalysisCompetitiveness Analysis
Identify Economic Development Policies & ActionsIdentify Economic Development Policies & Actions
Industry cluster groupsOregon Employment DepartmentIndustry & Trade Associations
Researchers at universities
Local economic developersOthersUse CEW data & identify clusters
using 3 criteria:LQ > 1.25Average wages = 10 % above US averageGrowth rate > national growth rate
Conduct interviews or focus groups with industry representatives. Collect data about the industry sectorin general, cluster connections and relationshipscluster drivers, support factors, and challenges.
Collect additional information about particular cluster such as Patents, key products, major geographic concentrations, top 10 leading firms, entrepreneurial activity, competitor regions for specific cluster. Conduct Shift-Share analysis.
Define geographic area for whichcluster analysis is done.I.e. Portland-Vancouver, OR-WA PMSA
Policies and actions should be identifiedin collaboration with key partners. Should address state, regional, and local scale.
ProductsProducts
Identificationof DataSources
Identificationof CandidateClusters
Differentiation of- Existing Clusters- Emerging Clusters- Target Industries
Cluster-basedEconomicDevelopmentStrategy
Identify metrics and performance indicators.
Strategy development and assessment is ongoing.
IndustryIndustry
FirmFirm
OngoingOngoing
Cluster Methodology
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Cluster AnalysisCluster Analysis
Define Cluster
Convene Firms
Gather Data
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Nursery Industry ClusterNursery Industry Cluster
1,000 firms with payroll 12,000 employees $500 million sales Average salary: $20,000 Growing much faster
than US Nursery Industry
Oregon’s largest agricultural commodity
85% of industry in Metro area
0
100
200
300
400
500
600
1991 1995 1998
Sales (Millions)
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Related Industries
Commercial Printing (2752, 2754, 2759)Prepress (279)Ad. Signs (3993)
Printing
Staffing Agencies (7363)
The Creative Services ClusterThe Creative Services Cluster
Newspapers (2711)Magazines (2721)Radio (4832)Cable (4841)Television (4833)
Media
Internet Service Providers
Educational/CulturalPerforming ArtsMuseumsArt SchoolsGalleries
Telecommunication & Cable Providers
Education & Training Institutions
Other IndustriesIn-House “Shops”
Advertising/Public Relations
Film & Video
Software/Multimedia
SIC 737Content DesignersMultimediaWeb Sites
SIC 874, 731
SIC 781, 782FilmVideoAllied ServicesSound Studios (7389)
Freelancers & Self-employed(Supporting all industry groups)
Commercial photographers (7335)Graphic Design (7336)Writers (8999)Producers/Actors (792)
Additional Human Resource Providers
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IV. What to DoIV. What to Do
The Architecture of a Cluster Strategy
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Using ClustersUsing Clusters
Think of the Economy as a series of Clusters
Organize Efforts by Cluster
Act Cluster by Cluster to promote competitiveness & innovation
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For More InformationFor More Information
www.ImpresaConsulting.com
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