Targeting a Portfolio of Clusters (cont.)

Targeting clusters

Figure 2. Economic Development Services. Click for larger image.

After identifying the lifecycle phase of the region’s primary clusters, the industry lifecycle matrix becomes a useful tool for assessing how they relate to service delivery for the economic development organization. As described in Figure 2, economic development service offerings can be described in three primary components:

1. Long-term policy changes through working with the public and private sector;
2. Recruitment of new firms to the region to expand a cluster; and
3. Retention of existing firms and jobs by helping local firms to expand.

These three service offerings can be matched to clusters based on their current lifecycle phase. Economic developers work to move industry clusters from early lifecycle stages requiring policy efforts to later-stage services, requiring recruitment and eventually retention. Overlapping services are required in some cases, but this framework helps economic developers to target service delivery.

Several examples are available from communities that identified changing market dynamics early and invested in longterm development of new clusters. Austin, Texas, for instance, recognized the community’s creative strengths and the linkages between the music and film industries and invested in converting the Robert Mueller Municipal Airport into a film studio location and expanding the SXSW music festival into a broader media and entertainment event. In doing so, the community spent several years cultivating the film industry, which resulted in successfully positioning Austin as an alternative location for film production.

Maturing clusters: Recruitment

For maturing clusters, the local market supports the industry, but the industry has yet to emerge as a primary center of activity. This presents a medium- to long-term effort for recruitment. The market presents a compelling case for companies to locate within the region, and a strong marketing, messaging and recruitment campaign can begin to build a strong cluster. For example, the New Hampshire seacoast emerged as a small high-tech center with strong supporting factors for the industry’s development, including a lowercost alternative to Boston’s Route 128 corridor, a vibrant arts community and a highly educated workforce. Recognizing these market strengths and an emerging cluster, the seacoast region formed the eCoast Technology Roundtable to focus on cultivating the high-tech industry. The Roundtable has invested in building the region’s image and focused on recruitment to capitalize on the region’s market strengths.

Established clusters: Retention

For established clusters, retention becomes the obvious focus. These firms have a strong established presence locally and should receive focused retention efforts to help them expand jobs.With an established aerospace cluster, Fort Worth, Texas, focused efforts on retention through the creation of a workforce- focused organization designed to help the industry train employees to meet a wave of anticipated retirements. While the region can always benefit from policy changes and recruitment activities to build a supplier network, the mature cluster benefits most from retention efforts that focus on retaining and expanding local jobs.

Industry Lifecycle Matrix and Targeted Economic Development Services

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