u.s. regional cluster mapping - council for community ... · the eda sponsored u.s. cluster mapping...
TRANSCRIPT
1 Copyright 2012 © Professor Michael E. Porter
Rich Bryden
Director of Information Products
Institute for Strategy and Competitiveness
Harvard Business School
www.isc.hbs.edu
U.S. Regional Cluster Mapping Current Research and Tools for Practice
C2ER Webinar
October 25, 2012
2 Copyright 2012 © Professor Michael E. Porter
Macroeconomic Competitiveness
Microeconomic Competitiveness
Sophistication
of Company
Operations and
Strategy
Quality of the
Regional
Business
Environment
Monetary and
Fiscal Policies
Social
Infrastructure
and Political
Institutions
State of Cluster
Development
Endowments
A critical mass of
interconnected firms and
associated institutions in
particular fields, linked by
commonalities and
complementarities.
What Determines Competitiveness?
“The Determinants of National Competitiveness,” Delgado, Ketels, Porter, Stern, NBER working paper, June 2012
3 Copyright 2012 © Professor Michael E. Porter 20120602 – Michigan State Competitiveness – Rich Bryden
Massachusetts Medical Devices Cluster
4 Copyright 2011 © Professor Michael E. Porter 2011 – State Competitiveness – Rich Bryden
The Evolution of Regional Economies San Diego
U.S.
Military
Communications
Equipment
Sporting
Equipment
Analytical Instruments
Power Generation
Aerospace Vehicles
and Defense
Transportation
and Logistics
Information Technology
1910 1930 1950 1990 1970
Bioscience
Research
Centers
Climate
and
Geography
Hospitality and Tourism
Medical Devices
Biotech / Pharmaceuticals
Education and
Knowledge Creation
5 NGA 2011 – Wisconsin – Rich Bryden Copyright © 2011 Professor Michael E. Porter
Composition of Regional Economies, United States
Local Clusters
• Serve almost
exclusively the
local market
• Not exposed to
cross-regional
competition for
employment
71.7% of
employment
61.8% of income
3.5% of patents
27.4% of
employment
37.3% of income
96.4% of patents
Traded Clusters
• Serve markets in other
regions and countries
• Free to choose location
• Exposed to competition
from other regions
Source: Michael E. Porter, Economic Performance of Regions, Regional Studies (2003); Updated
via Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School
Resource-based Clusters
• Location determined by
resource availability
• <1% of income,
employment, and patents in
the U.S.
6 Copyright 2012 © Professor Michael E. Porter
Furniture Building
Fixtures,
Equipment &
Services
Fishing &
Fishing
Products
Hospitality
& Tourism Agricultural
Products
Transportation
& Logistics
Composition of the Economy Linkages Across Clusters
Plastics
Oil &
Gas
Chemical
Products
Biopharma-
ceuticals
Power
Generation
Aerospace
Vehicles &
Defense
Lightning &
Electrical
Equipment
Financial
Services
Publishing
& Printing
Entertainment
Information
Tech.
Communi-
cations
Equipment
Aerospace
Engines
Business
Services
Distribution
Services
Forest
Products
Heavy
Construction
Services
Construction
Materials
Prefabricated
Enclosures
Heavy
Machinery
Sporting
& Recreation
Goods
Automotive
Production
Technology Motor Driven
Products
Mining & Metal
Manufacturing
Jewelry &
Precious
Metals
Textiles
Footwear
Processed
Food
Tobacco
Medical
Devices
Analytical
Instruments Education &
Knowledge
Creation
Note: Clusters with overlapping borders or identical shading have at least 20% overlap
(by number of industries) in both directions.
Apparel
Leather &
Related
Products
7 Copyright 2012 © Professor Michael E. Porter 20120602 – Michigan State Competitiveness – Rich Bryden
Clusters and Regional Prosperity Recent Findings
Drivers of Regional Job Growth, Wages, Patenting, New Business Formation, and Success of Startups
• Specialization in strong clusters
• Breadth of position within each cluster
• Positions in related clusters
• Presence of a region‘s clusters in neighboring regions
Not significant
• Positions in “high-tech“ versus other clusters
Source: Porter, The Economic Performance of Regions, Regional Studies, 2003; Delgado/Porter/Stern, Clusters and Entrepreneurship, Journal of Economic Geography,
2010; Delgado/Porter/Stern, Clusters, Convergence, and Economic Performance, mimeo., 2010.
8 Copyright 2012 © Professor Michael E. Porter 20120602 – Michigan State Competitiveness – Rich Bryden
Clusters and Economic Outcomes: Entrepreneurship The Evidence
New Industries (+) New Business Formation (+)
Survial Rates
of New Businesses (+)
Job Growth
In New Businesses (+)
The stronger the cluster, the more
likely new industries within the cluster
are to emerge
The stronger the
cluster, the more
dynamic is the
process of new
business formation
The stronger
the cluster, the
higher the job
growth in new
businesses
The stronger the
cluster , the higher
the survial rate of
new businesses
Source: Porter, The Economic Performance of Regions, Regional Studies, 2003; Delgado/Porter/Stern, Clusters and Entrepreneurship, Journal of Economic Geography,
2010; Delgado/bPorter/Stern, Clusters, Convergence, and Economic Performance, mimeo., 2010.
CLUSTER
9 Copyright 2012 © Professor Michael E. Porter
Cluster Efforts Enhancing Competitiveness:
The Case for Action
• Agglomeration largely driven by business environment conditions and
‘automatic’ cluster effects in a market process
BUT
• Exploitation of localized spill-overs not automatic
• Exploration of opportunities for joint action not automatic
• Cluster efforts enable locations to benefit more from what they have
10 Copyright 2012 © Professor Michael E. Porter
Cluster Efforts Enhancing Competiveness Creating Positive Feed-Back Loops
Clusters as Tool
Better Actions More Impact
Cluster initiatives provide a
platform to discuss
necessary improvements in
competitiveness at the level
where firms compete
The organization of
economic policies around
clusters leverages positive
spill-overs and mobilizes
private sector co-investment
11 Copyright 2011 © Professor Michael E. Porter 2011 – State Competitiveness – Rich Bryden
The EDA Sponsored U.S. Cluster Mapping Project
EDA Cluster
Mapping
Project
Research
Action
• New interface; focus on
engagement and learning
• New tools
• New project and community content
• Step change in scope and quality of
public and private efforts
• Better cluster data
• New regional data
• New cluster initiative data
• More on cluster pathways
• Next phase of comprehensive, action-
oriented analysis
12 Copyright 2012 © Professor Michael E. Porter
U.S. EDA-sponsored Cluster Mapping
Project Partners
Policy and Impact Study: Mobilizing Oregon Clusters
Liz Redman
Oregon Business Council
Lessons Learned About Cluster Development: #1
Involve private sector leadership
• Engage business leaders and industry membership groups to inform the vision for economic development and respond to regional challenges.
Lessons Learned About Cluster Development: #2
Recognize the value of all clusters
• Focus on traded-sector
• Encourage self-identification
• Geography, sector, workforce, inputs, management processes, suppliers, and customer base all serve as cluster linkages
Lessons Learned About Cluster Development: #3
Keep the network open
• Participation open to all
• Emerging and experienced clusters included
• A shared resource base helps mobilize resources
Lessons Learned About Cluster Development: #4
Diversify funding sources and maximize operational
efficiency
• Mix of public, private & philanthropic funding
• In-kind contributions from participants
• Small operating budget and staff
Lessons Learned About Cluster Development: #5
Align staff characteristics with responsibilities
• Serving as connective tissue requires “salespeople” and “networkers”
• Recognize that value is perceived but hard to quantify
19 Copyright 2012 © Professor Michael E. Porter
New website rollout
• Minimally viable demonstration now available
• Alpha in November
• Beta and Gold “1.0” iterations by April
www.clustermapping.us
20 Copyright © 2012 Professor Michael E. Porter 2012 State and Metro Competitiveness – Rich Bryden
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
-0.8% -0.6% -0.4% -0.2% 0.0% 0.2% 0.4%
Change in Milwaukee share of National Employment, 2000 to 2010
Mil
wa
uk
ee’s
na
tio
na
l e
mp
loym
en
t s
ha
re, 2
01
0
Employees 6,500 =
Cluster Composition of the Milwaukee Metro Economy
Milwaukee Overall Share of US
Traded Employment: 0.76%
Overall change in the Milwaukee Share
of US Traded Employment: -0.05%
Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.
Added Jobs
Lost Jobs
Employment
2000-2010
Medical Devices
(2.74%, + 1.27%)
Footwear
(3.28%, +0.75%) Production
Technology
Heavy Machinery
Lighting and Electrical Equipment
Metal Manufacturing
Sporting, Recreational
and Children's Goods
(-1.16%)
Power Generation and
Transmission
Motor Driven
Products
Automotive
Financial Services
Processed Food
Chemical
Products
Plastics
Publishing
and Printing
Analytical
Instruments
Business Services
Education and Knowledge
Creation
Distribution Services
Entertainment
Prefabricated
Enclosures
Aerospace
Engines
Communications
Equipment
Construction
Materials
Apparel Textiles
Information
Technology
Biopharmaceuticals
Building Fixtures, Equipment and Services
Hospitality and Tourism Transportation and Logistics
Leather and Related Products Forest Products
Heavy Construction Services
Agricultural Products Furniture Jewelry and Precious Metals
21 Copyright © 2012 Professor Michael E. Porter 2012 State and Metro Competitiveness – Rich Bryden
Milwaukee Metro Job Creation in Traded Clusters 2000-2010
Jo
b C
reati
on
, 2000
-2010
-15,000
-10,000
-5,000
0
5,000
10,000E
du
ca
tio
n a
nd
Kn
ow
led
ge
Cre
atio
n
Me
dic
al D
evic
es
Bu
sin
ess S
erv
ice
s
En
tert
ain
me
nt
Tra
nsp
ort
atio
n a
nd
Lo
gis
tics
Pro
ce
sse
d F
oo
d
Info
rma
tio
n T
ech
no
log
y
Ae
rosp
ace
En
gin
es
Co
mm
un
ica
tio
ns E
qu
ipm
en
t
Ho
sp
ita
lity
an
d T
ou
rism
Pre
fab
rica
ted
En
clo
su
res
Bio
ph
arm
ace
utica
ls
Fis
hin
g a
nd
Fis
hin
g P
rod
ucts
Ae
rosp
ace
Ve
hic
les a
nd
De
fen
se
Co
nstr
uctio
n M
ate
ria
ls
Oil a
nd
Ga
s P
rod
ucts
an
d S
erv
ice
s
Te
xtile
s
Je
we
lry a
nd
Pre
cio
us M
eta
ls
Ap
pa
rel
Fo
otw
ea
r
Ag
ricu
ltu
ral P
rod
ucts
Fu
rnitu
re
Le
ath
er
an
d R
ela
ted
Pro
du
cts
Fin
an
cia
l S
erv
ice
s
Ch
em
ica
l P
rod
ucts
Bu
ild
ing
Fix
ture
s, E
qu
ipm
en
t a
nd
Se
rvic
es
An
aly
tica
l In
str
um
en
ts
Po
we
r G
en
era
tio
n a
nd
Tra
nsm
issio
n
Fo
rest P
rod
ucts
Sp
ort
ing
, R
ecre
atio
na
l a
nd
Ch
ild
ren
's G
oo
ds
He
avy M
ach
ine
ry
Pla
stics
Dis
trib
utio
n S
erv
ice
s
Lig
htin
g a
nd
Ele
ctr
ica
l E
qu
ipm
en
t
He
avy C
on
str
uctio
n S
erv
ice
s
Pu
blish
ing
an
d P
rin
tin
g
Mo
tor
Dri
ve
n P
rod
ucts
Pro
du
ctio
n T
ech
no
log
y
Me
tal M
an
ufa
ctu
rin
g
Au
tom
otive
Net traded job creation,
2000-2010:
- 41,197
Indicates expected job creation
given growth in subclusters nationally.*
Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director. * Percent change in national benchmark times starting regional employment. Overall traded job creation in this region, if it matched national benchmarks, would be -38,544.
22 Copyright © 2012 Professor Michael E. Porter 2012 State and Metro Competitiveness – Rich Bryden
0 20,000 40,000 60,000 80,000 100,000 120,000
ApparelFootwear
Fishing and Fishing ProductsPrefabricated Enclosures
Leather and Related ProductsAerospace Engines
TobaccoAerospace Vehicles and Defense
Power Generation and TransmissionOil and Gas Products and Services
EntertainmentHospitality and Tourism
TextilesFurniture
Construction MaterialsChemical Products
Education and Knowledge CreationProcessed Food
Communications EquipmentTransportation and Logistics
Publishing and PrintingMedical Devices
BiopharmaceuticalsAgricultural Products
PlasticsBuilding Fixtures, Equipment and
Jewelry and Precious MetalsLighting and Electrical Equipment
Motor Driven ProductsSporting, Recreational and
Analytical InstrumentsForest Products
Metal ManufacturingAutomotive
Distribution ServicesHeavy Construction Services
Business ServicesProduction TechnologyInformation Technology
Heavy MachineryFinancial Services
Milwaukee Metro Wages in Traded Clusters vs. National Benchmarks
Wages, 2010
Milwaukee average
traded wage: $53,271
Note: Wages are not available in all clusters due to data suppression to protect confidentiality.
Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.
U.S. average
traded wage: $60,502
l Indicates average
national wage in
the traded cluster
23 Copyright 2012 © Professor Michael E. Porter
New Directions for the Website
2. Community 1. Engaging &
Educating
24 Copyright 2012 © Professor Michael E. Porter
BEA Economic Regions
Economic Area definitions from U.S. Bureau of Economic Analysis
Boston Economic Area
Hartford Economic Area
Albany Economic Area
New York Economic Area
NY
PA
NJ
CT
VT
NH
MA
RI
3. Customize
Regions
25 Copyright 2012 © Professor Michael E. Porter
Regions with high cluster specialization and high share of US employment (LQ>1.3 and top 10 employment)
Automotive Cluster Specialization by Economic Area
Detroit-Warren-Flint, MI
(LQ=6.51, Share=13.8%)
Adjacent EAs
tend to specialize in
the same cluster
Regions with high cluster specialization and moderate share (LQ>1.3 and cluster employment > 1000)
4. Macro View
of Clusters
26 Copyright 2011 © Professor Michael E. Porter 2011 – State Competitiveness – Rich Bryden
5. New
Analyses
27 Copyright 2012 © Professor Michael E. Porter
6. New
Data
28 Copyright 2012 © Professor Michael E. Porter
29 Copyright 2012 © Professor Michael E. Porter
www.clustermapping.us