ECONOMIC DEVELOPMENT
Business clusters can make a region bustle with opportunity
A Wright State University professor says metro areas should build upon existing businesses and services.
Sunday, May 11, 2008
Development experts, politicians and academics call them clusters. The concept — similar businesses locating near and trading with one another, sharing laborers, driving university research and training — is nothing new. Think Hollywood and entertainment, New York and finance or, of course, Dayton and automotive manufacturing.
But a recent study by the Brookings Institute, a Washington, D.C.-based think tank, says clusters remain critical to the economic growth and competitiveness of the country and metropolitan areas such as Dayton. Karen Mills, the study's co-author and a venture capitalist, said the federal government can support their growth by providing data and funding.
Extras
John Blair, an economics professor with Wright State University who has studied the issue locally, said both ideas hold promise.
Having money to conduct feasibility studies and other research could help regions find ways to fix deficiencies they may have.
But he cautions that any data gathered needs to be tempered with information provided by local experts in the public and private sector to give meaning to the numbers. Regions need to look at what businesses and support services they already have and build upon those, Blair said.
"There's a big tendency in people who practice economic development to jump on the bandwagon," he said. "You're much better off to study your local economy and think rigorously about what things have a natural advantage in your area rather than just reading what's in the newspaper and picking what's popular."
The establishment of interdependent businesses also helps keep companies in the area, he said.
"Once they are here, once they are all reinforcing each other, it's hard for any of them to leave," he said. "You're building a more lasting economic base."
David Swenson is vice president of business initiatives with the Edison Materials Technology Center, an organization that assists manufacturers. He said industry clusters related to advanced materials and alternative energy offer potential for growth in the state and the region. Manufacturers often require capital to buy new equipment and training for their workers in order to tap into these areas, he said.
In recent years, local economic development officials also have launched efforts to grow the local presence of such business sectors as radio-frequency identification technology or sensors for military and other applications.
Clusters and Competitiveness
Authors: Karen Mills, Elisabeth Reynolds and Andrew Reamer
On the Web: www.brookings.edu/papers/2008/04_competitiveness_reamer.aspx
The study suggests that the few federal programs available for development of clusters lack coordination and are inadequate for the task of promoting clusters. With the vast amount of information collected by government agencies such as the U.S. Census Bureau, the Bureau of Economic Analysis, the Bureau of Labor Statistics and the U.S. Patent and Trademark Office, the government could track the development of industry clusters, map them out and conduct research, the study states. Additionally, the federal government should set aside a pot of $350 million to be carved into grants that states and cities could apply to feasibility studies, planning and other cluster-building tasks.
Contact this reporter at (937) 225-7317 or
ttresslar@DaytonDailyNews.com.
