Clusters Report Released by NGA, Council of Competitiveness

Creating and strengthening regional competitiveness and innovation is the key to the nation’s ability to succeed in the global marketplace and raise the standard of living for all Americans, according to a new report presented Thursday at a joint conference of the Council on Competitiveness and the National Governors' Association.

Titled Clusters of Innovation: Regional Foundations of U.S. Competitiveness, the report is the result of a two-year study sponsored by the Council on Competitiveness that outlines an agenda for both the public and private sectors to strengthen regional economies and build clusters.

Strong clusters at the regional level are fundamental to a region’s job growth, wage levels, rate of innovation and the formation of new businesses, the report says. Highlighting in-depth studies of five regions — San Diego, Wichita, Pittsburgh, the Research Triangle, and Atlanta — the report examines 15 clusters within the regions, such as pharmaceuticals and biotechnology. The report draws on a first-of-its-kind database on every U.S. regional economy and includes the results

of 264 interviews and 1,025 surveys of business, academic, government, and community leaders.

An institutional structure for economic development that is independent of government is also essential to regional and cluster development, the report states. It cites UC Connect in San Diego and Digital Greenhouse in Pittsburgh as organizations that can develop training and management programs, help link firms and university assets, and work with government to recruit businesses.

The report suggests that governments at all levels can make a significant difference in regional and cluster development. However, the report emphasizes, the private sector must take a leading role in regional economic development. Companies also must recognize the important influence that their cluster has on the companies' competitive success and play an active role in cluster development.

Recommendations for government actions include:

• At the federal level: allocate federal resources to reinforce regional cluster development; delegate many economic policy choices to regions; provide federal support for the creation of state and local economic development strategies.
• At the state level: make significant investment in colleges and universities in each major region of the state; focus research and training initiatives around regional clusters; employ cluster-based business recruitment strategies.
• At the regional and local levels: upgrade both transportation infrastructure and K-12 education; create a conscious regional strategy; foster cluster-specific collaborative institutions.

In addition to its findings, Clusters of Innovation: Regional Foundations of U.S. Competitiveness offers a detailed methodology that any region may follow to further its economic development. The report is available at http://www.compete.org/innovate/innovate_index.html