We need an official “industry cluster” strategy for Mississippi. At least Blueprint Mississippi is considering such as a priority. Most states have one and Mississippi almost did.
Harvard Business School professor Michael Porter introduced the industry cluster concept in the 1980s. He did early industry cluster work in Mississippi in the 1990s, but that work never led to an official state strategy or policy.
So, Louise, what is an industry cluster?
Well, it’s not the same as a “targeted industry.” Mississippi has an official targeted industry program that focuses on 14 leading industry sectors: aerospace, automotive assembly, automotive suppliers, contact centers, communications and information technology, remote data centers, defense and homeland security, food processing, metal fabrication and steel, plastics/polymers and chemicals, shared services centers, shipbuilding, timber and wood products, warehouse and distribution.
And, MDA has been doing a pretty good job attracting such industries. What we’re missing, Blueprint is told, is the build-out and regional impact that an industry cluster brings.
Porter defined an industry cluster as a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field.
In simple terms, that means that all, or most, of the businesses and organizations that support a particular industry are physically located in the same geographic region.
The example most used to illustrate an industry cluster is the California wine cluster. It’s built around two core sectors – growers that operate the vineyards and wineries that make and bottle the wine. Other industry partners include companies that make fertilizer, pesticide, and herbicide; build grape harvesting and winemaking equipment; and manufacture barrels, bottles, corks, caps, and labels. Add in research and trade organizations, transportation and irrigation companies, marketing specialists, government support agencies, educational institutions and you get the picture.
Recent cluster research, says a Brookings Institution report, shows “strong clusters foster innovation through dense knowledge flows and spillovers; strengthen entrepreneurship by boosting new enterprise formation and start-up survival; enhance productivity, income-levels, and employment growth in industries; and positively influence regional economic performance.”
Porter’s follow-up work in Mississippi focused on building polymer and communications/information technology clusters, which remain in the building process.
The best known clusters in the state have been the furniture industry in Northeast Mississippi and the catfish industry in the Delta. Both of these clusters, however, are on the decline.
Why bother with clusters?
Blueprint Mississippi believes industry clusters can generate higher paying jobs, increase business formation, become major regional economic engines, and help build-up supporting organizations such as research universities and service providers. Mississippi also must compete with states like Georgia, South Carolina, and Florida that have comprehensive support programs for clusters.
Sounds like something we need…but, not likely to crave like a GooGoo Cluster.