The importance of clusters to regional competitiveness and economic performance is well established. Research has shown that the co-location of businesses in clusters increases the productivity of companies and job creation, drives innovation, stimulates the formation of new businesses, and supports the survival and growth of small businesses.
Clusters can also further catalyze economic growth by providing a framework for organizing disparate local and regional public policies and investments directed at economic development. However, this has proven to be an elusive goal for many cities as they struggle to accelerate the growth of targeted clusters that they believe will drive future economic prosperity. A new report, Building Strong Clusters for Strong Urban Economies was written to help city leaders achieve this goal by providing actionable strategies to galvanize their cluster building efforts.
Produced by JPMorgan Chase & Co. and the Initiative for a Competitive Inner City (ICIC), the report’s insights were informed by cluster theory and practice, and an in-depth analysis of cluster strategies across the U.S. The report highlights actionable insights from four constructive case studies: the San Diego regional innovation cluster, BioSTL in St. Louis, the Chicago regional growth initiative, and ProsperityNOLA in New Orleans. It also offers six recommendations to help guide city leaders in designing high-impact cluster growth strategies.
Clusters represent interrelated industries in a specific geography – for example, the automotive cluster in Detroit or the oil and gas cluster in Houston. “While more and more cities are thinking about clusters as a key to their economic development plans, city leaders are not always equipped with the strategies to maximize their impact, including targeted growth in inner cities,” said Kim Zeuli, director of research and senior vice president, ICIC. “Whether your city is beginning to look at cluster strategies, or hoping to spur the growth of targeted clusters, the report offers important takeaways.”
The San Diego regional innovation cluster and BioSTL (St. Louis) cases offer important strategies for creating successful cluster initiatives. They are spurring growth in the advanced defense technology and biosciences clusters, respectively. The Chicago regional growth initiative and ProsperityNOLA (New Orleans) cases point to important lessons for creating sustainable cluster-oriented economic development plans, whether within a metropolitan region or city.
Recommendations in the report include choosing the right cluster(s), identifying appropriate cluster interventions, being flexible about geography, ensuring leadership has relevant industry expertise, establishing strong public-private partnerships, and identifying a sustainable business model.
The report was launched at announced at an event hosted recently by BioSTL, the GlobalSTL Health Innovation Summit, which represents a key cluster-building activity of BioSTL’s international attraction initiative, bringing together some of St. Louis’ top hospitals, companies, and investors and a delegation of 14 leading digital health companies from Israel and Ireland looking to set up U.S. headquarters in St. Louis. “BioSTL is proud to earn this distinction for helping to orchestrate a successful bioscience cluster built upon St. Louis’ strengths in medical and plant science,” said Donn Rubin, president and CEO of BioSTL. “It didn’t happen overnight. Our deliberate approach over the past 15 years has put in place the people, ideas, capital, and infrastructure to create a vibrant cluster to spur economic growth. To be recognized by JPMorgan Chase and ICIC as the model bioscience cluster for other U.S. cities is a privilege for the St. Louis region.”
The research was made possible by JPMorgan Chase & Co. through its ‘Small Business Forward’ initiative, a $75 million, multi-year global effort to connect underserved small businesses to experts and critical resources that help them grow faster, create jobs and strengthen local economies.
The Initiative for a Competitive Inner City (ICIC) is a U.S. national, nonprofit research and advisory organization founded in 1994. Its mission is to drive economic prosperity in America’s inner cities through private sector investment that leads to jobs, income and wealth creation for local residents.