Confused about cluster theory

[Hceux]

How does anyone determine that there's a cluster in a region? Does this involve statistical analysis of every darn industry/commercial sector in a region?

I'm confuse and want to see if I can incorporate this theory in a research for one of my classes.

 

[Cardinal]

A good cluster analysis is far more complex than what you will usually see in an economic development report, and everybody just has to have a "cluster" now that they are the fad. You should be looking at the number of firms, supporting industries, reasearch facilities, educational programs, employment, patent activity, and a half dozen or so other variables if you really want to know an area's clusters. Mostly, though, people do a simple shift-share analysis on County Business Patterns data, and say that the top few NAICS are the region's clusters.

 

[japrovo]

The biggest pitfall I see in this area is the tendency in practice to confuse industry mass for a functioning cluster. You can go back to Michael Porter's original work and he offers great descriptions of how interrelated networks of firms and suppliers in an industry function as clusters but methodologically he left a lot for us to infer. Even where the work is good and people are doing more than just pointing to the presence of an industry in their region and calling it a cluster the result there has been some diversity of approaches. The references below may be of some help. Several of them are drawn from a special edition on cluster methodology that Economic Development Quarterly published in 2000.

I would also shamelessly like to plug some work on our website.
http://www.upa.pdx.edu/IMS/currentprojects/neo.html This includes a cluster monitor template for analysis based on the methodology we used in a series of studies of clusters in the Portland region. The studies, also at that link, include semiconductors, nursery products, creative services, lumber and wood products among others.

Good luck!

Austrian, Ziona (2000). Cluster Case Studies: The Marriage of Quantitative and Qualitative Information for Action. Economic Development Quarterly. 14:1, 97(14).

Economic Development Administration (1997). Cluster-Based Economic Development: A Key To Regional Competitiveness. Department of Commerce: Washington.

Fagan, Jocelyn H. (2000). Do Northeast Ohio's Drivers Derive Competitive Advantage From Shared Labor. Economic Development Quarterly. 14:1, 111(15).

Fesser, Edward J. and Edward M. Bergman (2000). National Industry Cluster Templates. Regional Studies. 34:1, 1(18).

Held, James R. (1996). Clusters as an Economic Development Tool: Beyond the Pitfalls. Economic Development Quarterly. 10:3, 249(13).

Hill, Edward, and John Brennan (2000). A Methodology for Identifying the Driver's of Industrial Clusters: The Foundation of Regional Competitive Advantage. Economic Development Quarterly. 14:1, 65(32).

 

[Hceux]

A good cluster analysis is far more complex than what you will usually see in an economic development report, and everybody just has to have a "cluster" now that they are the fad. You should be looking at the number of firms, supporting industries, reasearch facilities, educational programs, employment, patent activity, and a half dozen or so other variables if you really want to know an area's clusters. Mostly, though, people do a simple shift-share analysis on County Business Patterns data, and say that the top few NAICS are the region's clusters.

Cardinal, what are NAICS and what is the simple shift-share analysis?

 

[donk]

what are NAICS ......?

North American Industrial Classification System.

It is a sytem that groups like industries into classes and provides clear definitions of them. I have toyed with using it as part of a Performance Based Planning Exercise I may have to undertake.

See http://www.statcan.ca/english/concepts/industry.htm for a brief description and partial tables.

 

[Cardinal]

A shift share analysis compares NAICS concentrations across different geographies. For example, the employment in a specific industry within the county versus the state, or the number of firms in a given industry in the metropolitan region versus the state. It is really a poor indicator of cluster activity, though.

 

[donk]

Now that I better understand "shift share" analysis, also look at the stats can data related to occupation and labour force by industry then combine with place of employment for different places for an idea of what the trends are.