One of the most influential and widely pursued theories in economic development has been the use of industry clusters, or simply clusters, to focus services in a regional economy. This approach allows communities to consider the needs of interconnected firms and define a focus. What it fails to do though is to contemplate potential impacts on these clusters, both positive and negative, by market dynamics. As a result, the practice of using industry clusters as an economic development strategy is an approach that has run its course.
The Fourth Economy team has long been involved in developing and implementing cluster strategies and we have come to appreciate the advantages and disadvantages of the cluster approach. Along the way, we have developed methods, tools, and best practices that we believe can help regions to more effectively leverage their potential for economic prosperity. In this article, we first review the pros and cons of clusters and then discuss a modern approach that we call Market Opportunity Networks, which retains the advantages of clusters and reduces the disadvantages. Since 2006 members of the Fourth Economy team have been developing this methodology and demonstrated success with a number of clients. Continue reading “Market Opportunity Networks: Advancing Economic Development Strategy”
As I’m getting settled in at my new position at Fourth Economy, I have been thinking about how I can blend my experiences into the team’s current projects and approaches. I have known some of the Fourth Economy team for many years, and I’m certainly someone who has promoted and supported their brand of progressive innovative growth strategies / economic development, and regional development. At the same time, I’m someone who has worked for many years promoting the strategic value that sustainability principles (triple bottom line) bring to companies, organizations and collaborative initiatives. So, I’ve been thinking about the sustainability side of the fourth economy and the organizations we’ll find there. Continue reading “Fourth Economy Organizations”
Although governments have been reluctant to resort to New Deal-style direct job creation, agencies at all levels are seeking ways to accelerate the current economic recovery. One of the most reliable formulas researchers have identified for private-sector growth has been the regional innovation cluster model. Regions build upon their existing university programs, industrial capacity and technology strengths to develop a competitive advantage that promotes export-driven growth with high-value jobs. Some regional planners proudly report that their innovation clusters provide “5% of the companies, 10% of the jobs and 20% of the payroll.” Continue reading “Eds, Meds & Feds: The Innovation Economy in the DC Metro Region”
Here at Fourth Economy, we’re always looking for opportunities to identify and build upon local assets. This often takes the form of bringing together various stakeholders to advance specific technologies and sectors. We’re currently working on building more robust sectors around both energy and water here in the greater Pittsburgh region and beyond. Even though this work is challenging, a dense network of universities, technology intermediaries, economic development partners, and private sector businesses aids our work. But what happens when you leave the “big city” and those players are spread further across a region?
If you work in economic development or are in a business that thrives on innovation you have probably heard about regional innovation clusters or some version of the theme. With the White House promoting Startup America with a focus innovation and entrepreneurship from coast to Cleveland and looking to regions as partners you soon may have a regional innovation cluster map drawn over your workplace.
The core model of economic clusters is not new but the approach has evolved over the years. For a unique approach and a best practice I recommend the TechBelt Initiative. TechBelt has been linking economic development activities in the Cleveland, Youngstown and Pittsburgh corridor for several years now.
In full disclosure I am biased to proclaim the TechBelt Initiative a best practice since my firm is staff the effort. I do have objectivity as my team works with innovation-based economic development groups throughout the country. There are a lot of great efforts underway and all can learn from one another. What TechBelt can share is the following:
First, the TechBelt Initiative operates under an approach of what Ed Morrision calls Strategic Doing, which is simply explained as a “learning by doing” model. The TechBelt relies less on overproduced studies and more on instinct and ‘just in time analysis’ to understand the best direction to take and investments to make.
Second, the TechBelt has chosen an approach that limits formality and bureaucracy to allow for rapid team building and responsive decision-making. This allows over three-dozen organizations to work together collaboratively and not get hung up on who is in charge.
Third, the TechBelt has regional leaders of organizations that care deeply about their communities and organizations they serve – but also see the value of building the larger regional community.
Finally, that last word in the preceding sentence, Community, is why the TechBelt region is different. The work that is being done at times is proactive and other reactive but in both cases we are bringing together individuals who are sharing their vision, their ideas for the region and are getting to know one another. As the world begins to recognize the value of open innovation, this TechBelt community is what matters most. The friendships that are being built will support the accomplishment of great things both now and in the future.
I invite others to share their ideas about what is working in their regional innovation clusters and together we will help define the next phase of innovation-based economic development strategy.