Clusters Get More Attention in Washington State

Washington state is giving more attention to clusters to drive local economic development. Their approach appears to be practical and focused on trying to get something done. This is important.

Industry and business clusters are getting a good bit of attention nationally and internationally by economic development groups. Many areas are asking this question: "Which industry locally could be what software is to Seattle, what cars are to Detroit and what wine is to the Napa Valley?" That is essentially the approach associated with clustering.

Clustering looks at geographic concentrations of related businesses, including primary employers, suppliers, supporting businesses and educational and work force training institutions. Michael Porter from Harvard University has received considerable attention for his work with industry clusters over the past nearly two decades.

The goal is to promote growth in key industry sectors, which will add jobs and revenue to the area economy. Silicon Valley has served as the poster child for clustering for many years. Boston's Route 128 and North Carolina Research Triangle area, Austin's microelectronics cluster, and many other areas have been heralded as cluster successes.

Clustering, a term coined in the 1970s, is hardly a new development strategy, but it's one that has seen resurgence lately.

A Washington State House bill passed last year encouraged its use statewide, and the State's Department of Community, Trade and Economic Development is looking at pilot programs, including a $165,000 one for the Olympic Peninsula's marine services industry, to show how cluster-based growth may help regional economies.

Kitsap County, WA commissioners recently approved a $35,000 contract for the study of the area's local tourism cluster.

The clustering approach combines both recruitment and retention. It encourages businesses to buy materials and services from area providers, creating a business-to-business "buy local" campaign. It also seeks out complementary businesses, particularly for smaller firms, so they can expand by combining their efforts.

Clusters, according to the Kitsap Regional Economic Development Council, create a critical mass that "provides a cauldron of innovation and cooperation" that encourages similar kinds of businesses to locate to the area.

While the group acknowledged the defense industry at the county's developed clusters, it pinpointed emerging clusters in technology, tourism and marine services.

Read more here.