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New Cluster-Focused Models for Regional Growth and Collaboration

William H. Hudnut III / Dec 10 2011

For Release Saturday, December 10, 2011

William HudnutAs I listened to the dialogue at the Citistates Group’s Pocantico retreat in late October, I was impressed by the way the conversation about regional thinking and acting had shifted from structure to form, that is to say, from governmental fiat to organic growth. Here was a new paradigm!

Given the discouraging state of affairs at the federal and state levels of government, the creation of by the state legislatures of creative interjurisdictional mechanisms, or revised federal mandates, beyond what is already in place (MPOs and COGs, for example) is a pipe dream.

What then can stimulate real progress in affirming the reality, and recognizing the necessity, of regional cooperation? It’s the a focus on creating clusters of economic development opportunity. Clusters can grow organically, and do not need official action by government to happen. Harvard’s Michael Porter has famously described clusters as “geographically proximate groups of interconnected companies and associated institutions in a particular field, linked by commonalities and complementarities.”

Clusters we are familiar with, such as life sciences in Boston, tourism in Orlando, aerospace around Wichita, the Golden Triangle in Raleigh-Durham, NC, and Silicon Valley, all illustrate Porter’s point.

Economic development today must be a collaborative process, with companies, research and academic institutions working together to find out what is unique in their area and to create new companies, new start ups, new spinoffs. Government can be a facilitator, but not the driver, in this new model — simply because it involves the private and non-profit sectors more than the public sector, in its policies and incentives.

Consider the following two examples:

During the time I served as Mayor of Indianapolis, we had a Corporate Community Council (CCC) consisting of local CEOs plus the governor, the presidents of Indiana University and Purdue, and the mayor. But early in this century, corporate leaders realized that the entire Central Indiana area — Bloomington, Terre Haute, Lafayette, Muncie, Kokomo, Columbus and so on — was too dependent on large manufacturing companies whose high wages “masked underlying challenges in workforce and economic diversity.” Consequently, the business leaders came together and arranged for the old CCC to morph into the Central Indiana Corporate Partnership (CICP), including not only business leaders, but also leaders of higher education.

CICP commissioned Battelle Memorial Institute in Columbus, Ohio, to study regional successes in establishing clusters. Out of that initiative, begun in 2001, emerged the CICP’s blueprint for economic progress. It focused on the key clusters of advanced manufacturing, the life sciences, distribution logistics, and information technology, with a strong emphasis on entrepreneurship and economic diversity. CICP’s president and CEO, Mark Miles, has defined its mission as: “educating, retraining and retaining the workforce; ensuring connectivity among and between organizations, sectors, clusters, and regions (both in the United States and globally); harnessing the region’s intellectual capital to create firms and jobs; encouraging an entrepreneurial climate for the growth and expansion of the clusters.”

To date, the most successful cluster fostered by CICP has been the BioCrossroads Life Sciences Initiative, founded with assistance from Eli Lilly & Co., Indiana University, Purdue University, the Indiana Health Industry Forum, and local government. $80 million was raised in venture capital, and over $2 billion in corporate and institutional investment has been attracted, all of which has led to new companies, new asset-based economic strategies, new life sciences research, and hundreds of new jobs.

A second example of how a cluster can be formed independently of government regulations and policies has developed around Geneva, Ohio in Ashtabula County. It is currently being driven by a group of students at Georgetown University, in Washington, D.C., in a class called “City Lab” under the leadership of Associate Provost and Dean Robert L. Manuel.

The students were asked to develop a plan for the region’s “sustainable economic future.” In their study, they discerned several building blocks.

First and foremost was the SPIRE Institute in Geneva (a multi-sport, 750,000 sq. ft. facility that “exists to unlock the full potential of the human spirit through athletics, academics and service.” It was already in place in Geneva and debt free, thanks to the generosity of Ron and Tracy Clutter. Included in its mission statement is a section about helping people adapt to various mobility problems.

The second building block was the regional business plan of “Advance Northeast Ohio.” It emphasized the region’s strengths: precision manufacturing, material science, and chemical/mechanical engineering. The students noted that Ashtabula county is “the cradle of the reinforced fiberglass composite industry,” materials that could play a “major role in para-equipment and exo-skeletal research and development.”

The third building block was the proximity of 29 institutions of higher learning known for their achievements in scientific innovation and research—state universities, the Cleveland Clinic, Case Western Reserve, etc.

From this stockpile of assets, the students have come up with a unique idea; to wit, create an “adaptive community” in which those who have mobility issues caused by illness or injury can receive the equipment and training necessary to move toward “an active future.” The students note that currently, there is no economic cluster anywhere to serve the Adaptive Community, and believe that secondary benefits such as conferences, seminars, trade shows, and product launches could accrue in a cluster relevant to the needs of Special Olympians, Wounded Warriors, weekend warriors, and Paraolympians.

The cluster is not in place yet, but the students at Georgetown are driving this, and intend to persist with the idea, confident that the cluster will grow over time.

These two instances suggest a new model for organic regional growth independent of government structures, a smart way to go, don’t you think?

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  1. Mayraj Fahim
    Posted December 11, 2011 at 12:10 pm | Permalink

    It seems to me it ignores changing demographics. A very small percentage of the population is in higher education and the skill set of workers is not improving. On this very site there was an article which discussed why US infrastructure was so crude compared to European examples. Worker capabilities were determined to be a key part.
    Graduation Rates for CUNY’s community colleges reach an all time low

  2. Posted December 12, 2011 at 2:18 pm | Permalink

    “the creation of by the state legislatures of creative interjurisdictional mechanisms, or revised federal mandates, beyond what is already in place (MPOs and COGs, for example) is a pipe dream”

    Bill, I encourage you to look at Northwest Indiana’s Regional Development Authority. This unique, state created entity holds much promise for overcoming identified barriers to regional problem solving. At the Metropolitan Planning Council, we call their approach Goal Drive, Right-Sized and Coordinated.

    Established by the Indiana GA in 2005, the RDA has a clear set of legislatively identified goals: Gary Chicago Airport, shoreline redevelopment, passenger rail and a regional bus authority. The RDA was also given nearly $30 m a year to advance those goals.

    Being multi-county and focused in Northwest Indiana, it is Right-Sized. The scale of the challenges it was established to address do not stop at a single municipal or county border, they are regional in nature and the RDA was established with the proper geography in mind.

    The RDA coordinates the efforts of multiple jurisdictions (local, regional, state and federal) across multiple disciplines (housing, transportation, environment, economic development). As such it is uniquely situated to address some of the most vexing challenges that have been plaguing Northwest Indiana for decades.

    With new leadership at the local level in Gary, Indiana, strong congressional representation from Peter Visclosky and the RDA itself, Northwest Indiana is poised like never before to take off. The model of the RDA should be celebrated and shared with others struggling with similar challenges.


  3. Posted December 14, 2011 at 1:11 pm | Permalink

    People interested in learning more about Northwest Indiana’s Regional Development Authority might like to read a piece published this summer in Urban Land magazine. The link is below.

    The Northwest Indiana Model

  4. Posted December 18, 2011 at 8:52 am | Permalink

    As Chairman of the Northwest Indiana Regional Development Authority, I enthusiastically second Peter Skosey’s comments. It is exciting to see barriers to regional progress coming down. The RDA was intended to be a catalyst for transformational development/redevelopment in NW Indiana, addressing issues and priorities that no single unit of loca government could address. The catalyst seems to be producing results!

  5. Mayraj Fahim
    Posted January 2, 2012 at 4:59 pm | Permalink

    The Indiana RDA is better than nothing. But more humble Waterloo Regional Municipality has more capability. Do check out what it has achieved so far. And let us not compare this with the Stuttgart region!
    I think special agencies, which are extensions of special district mechanisms are more of the same. Americans needs to get bold. Thinking small steps are a big deal will keep Amerca falling behind. And what is this agency doing about economic segregation in the local system on which the future of America will be destroyed??? No sign of even the revenue sharing mechanism that Twin Cities pioneered.

  6. Mayraj Fahim
    Posted January 2, 2012 at 5:09 pm | Permalink

    Do see what timid England has allowed last year:
    Greater Manchester Combined Authority
    This area in England is ambitious and is demonstrative proof of the notion ” the early bird gets the worm':

  7. Mayraj Fahim
    Posted January 3, 2012 at 2:56 pm | Permalink

    In 2009 there was a conference held in Malmo that discussed regionalization and marginalization. I think this is something Americans should think about as well as the fragmented system marginalizes and unlike Europe where there is greater regionalization there is less of a counterweight. Malmo as you may know is part of the crossborder (Oresund) region with Copenhagen, which has really opened up its economic prospects.