US Government gets ready for rural clusters

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Mark Muro has written a very useful piece. His views broadly supported by other analysts.

Mark Muro, Policy Director, Brookings Institution Metropolitan Policy Program

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With a House-Senate “conference” committee soon to decide to create a truly valuable regional industry clusters initiative, some rurally oriented conferees fear that cluster strategies pertain exclusively to urban development. Others fret that cluster initiatives point exclusively toward high technology growth. However, the sort of cluster program being entertained by the Commerce-Justice-Science (CJS) conference would be completely agnostic about geography and equally friendly to all sectors, so long as they promised growth.

It’s true that cluster discussions – with their focus on spatial concentrations of related industry activity – have a cosmopolitan, high-tech feel. Clusters have naturally been equated with cities. Likewise, the concept’s original author, Harvard Business School professor Michael Porter, has frequently discussed the powerful dynamism of such big-metro innovation communities as Boston’s biotech cluster, Hollywood’s movie cluster, New York’s finance center, and Milan’s fashion concentration.

But the cluster concept has strong rural and low-tech groundings. Porter dwelt on the cluster structure of northern California’s wine cluster, populated by hundreds of wineries, thousands of independent grape growers, and myriad suppliers of grape stock, manufacturers of irrigation and harvesting equipment, producers of barrels, designers of bottle labels, and specialist marketers as well as the viticulture program of the University of California. Likewise, rurally oriented scholars like Stuart Rosenfeld have for more than two decades been producing authoritative reports on rural industry clusters, ranging from auto manufacturing in Northern Alabama to artisan cheesemaking in Vermont, log home production in the Bitterroot Valley of Montana, and wind energy in the Texas Panhandle. And economists at the Department of Agriculture (USDA) have conducted research suggesting that rural manufacturing clusters raise workers’ earnings substantially. In this regard, the vision of heightened economic collaboration and cooperation within distinct lines of work and industry has long appealed to rural thinkers.

The strongest U.S. policy precursor is the Rural Collaborative Investment Program, (via the USDA) which has been allocated $135 million and provides a model of how a federal clusters promotion program could be set up. USDA would set up a new rural investment board and a national institute on rural competitiveness, provide technical assistance, and make grants to regional investment boards to develop smart, regionally focused rural investment strategies, cross-sector collaboration, public-private partnerships, interim financing or seed capital, emphasis on collaborative innovation and entrepreneurship.  Source: The New Republic

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