Archive for the ‘Region – North America’ Category

Bohemians in rural areas

October 15, 2007

George Mason University researcher Richard Florida has garnered a lot of press for developing the concept of the “creative class” – innovative, talented people who use creativity, new ideas, and technology in their daily work. People usually think of hip urban areas or high tech hot spots like Silicon Valley. But, the creative class is also a key component of rural America’s economy.  

A new study finds that while metro areas have a higher proportion of individuals who work in “creative class” occupation, high concentrations of the creative class can also be found in some rural areas — especially those with scenic amenities. The research also shows that non-metro economies with more creative class occupations also perform better – faster growth rates, and higher rates of patent formation and adoption of new manufacturing technologies.  

Access the U.S. Department of Agriculture Economic Research Service (ERS) study,“The Creative Class: A Key To Rural Growth,” by David A. McGranahan and Timothy R. Wojan Source: NDOE 

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Canadian Government – strong supporter of clusters

October 15, 2007

The interesting thing about our investments in clusters is that they were featured in Canada’s new government Science and Technology Strategy “Mobilizing Science and Technology to Canada’s advantage”.  The Prime Minister made this announcement in 2007.  The strategy explicitly lists clusters as a mechanism for exploring new approaches to federally performed Science and Technology and in particular how these S&T partnerships drive economic development. In addition, there has been a government policy decision to put all of our cluster investments on one five year cycle as opposed to the phased approach that we have had to deal with.  In 2009/10 we will need to prepare a Cabinet submission for all our cluster investments and demonstrate their contribution to the economic agenda.  We have been working hard to development benchmark studies in each of these 12 communities and have completed program evaluations on most of them.  Most of it is good news but FDI is a challenge.  Our biggest cluster in Montreal – Biotechnology – has just seen a multi-million dollar investment by a world player in the biotech field.  Don Di Salle, National Research Council. Don.Di_Salle@nrc-cnrc.gc.ca

Technology adoption in rural regions

October 15, 2007

A new US study argues that rural communities need to focus more on technology adoption strategies. Small size and remoteness may limit the ability of rural areas to produce new radical technology innovations. However, they are well situated to spur innovations in mature industries. As industries mature, the costs associated with new innovations drop and creates opportunities for rural communities.  The research shows that less populated regions have higher patent activity in more mature sectors, and that manufacturers in rural and urban regions differ little in terms of adopting new technologies. Go to “The Power of Technological Innovation in Rural America,” by Jason Henderson.  

Collaborator profile – Lee Munnich (Minneapolis, USA)

October 15, 2007

Who and where are you? I am a senior fellow at the University of Minnesota’s Hubert H. Humphrey Institute of Public Affairs since 1991.  Before that I worked in state and local government in Minnesota in various research and policy roles. 

 What’s your job? I direct research and outreach projects in the areas of transportation policy and economic development.  I also teach a workshop on economic and community development at the Humphrey Institute.  During this capstone workshop Humphrey graduate students work in teams to prepare development strategies for clients.   My projects have included industry cluster studies and strategies for five regions in Minnesota. www.hhh.umn.edu/centers/slp/economic_development/industry_cluster_studies.html. 

We also conducted a study of rural knowledge clusters – go to    www.hhh.umn.edu/centers/slp/economic_development/rural_knowledge_clusters.html.  Our website includes a guide for those interested in analyzing industry clusters in their region.  The guide called “Understanding Your Industry” shows you how to use quantitative and qualitative tools to conduct and industry analysis. www.hhh.umn.edu/centers/slp/economic_development/understanding_industry.html

What’s exciting you at present? Last fall I collaborated in teaching a course on industry clusters to the staff at the Minnesota Department of Employment & Economic Development as well as others. This course was based on the course developed by Professor Michael Porter. The 73 participants conducted cluster studies and developed action plans as team projects for 16 Minnesota clusters. The course was well-received and is currently being used to link Minnesota’s ED and workforce development strategies.

What are your top 3 tips on how to collaborate?  1. Make sure you have a common vision. 2. Involve the right players in the collaboration. 3. Assure that all collaborators benefit in proportion to their contributions. What collaborative projects do you have that would interest Cockatoo readers? We continue to work with workforce development staff in Minnesota to use a cluster-based approach in focusing state and regional workforce and economic development strategies. Lmunnich@umn.edu (612) 625-7357

VC Accelerator (BEST PRACTICE)

October 15, 2007

 When the Venture Capital model was created, the typical VC firm raised a moderate-sized fund and assisted in the building of those start-ups. Today, these characteristics are no longer the norm. They are more risk adverse, and as VCs raise larger sums, they deploy their funds in larger increments.   

The Rise of Angels: Increasingly, angel investors invest their own money in early stages of private, high-growth ventures – and cite local economic growth, use of their expertise, and personal enjoyment as reasons for funding rapidly growing firms (Shane, 2005). Angels tend to invest close to where they live, often within a 3-4 hour drive from their office (Shane, 2005; Freear, 2002). This proximity allows angels to be involved in the ventures, and to find deals through their networks (Shane, 2005). 

Accelerator model: A new form of early stage funding is emerging. The “Accelerator” model is not a business incubator – it’s a full partnership. It provides more than space and common management services. It helps form companies as legal entities, interviews and hires the appropriate management team.  Start-ups wanting these benefits compete for slots on the accelerator’s “team”. The business idea is less important than the individuals. By assembling groups of entrepreneurs, they will hatch more and better ideas. Further, accelerators are concentrating on specific industries. The Foundry, Inc., located in Menlo Park, Ca. was the first-known accelerator. Formed in 1998, it focuses on medical devices. It is funded by notable VC firms Morgenthaler Ventures and Split Rock Partners.  

Go to Finding Business Idols: A New Model to Accelerate Start-Ups 

US look at rural clusters

October 15, 2007


 An Economic Development Administration-sponsored research report offers a comprehensive analysis of how regional business clusters can transform rural economies. The study looks at clusters across rural USA.    
Most clusters are located in urban regions, but rural areas dominate in mining, agribusiness and forest/wood products. Nationally, the clusters most associated with strong regional economic performance are business and financial services, ICT, and printing and publishing. Overall, human capital is the critical factor explaining differences in income growth between counties.  

Go to Unlocking Rural Competitiveness: The Role of Regional Clusters

Oregon’s Innovation Plan

August 15, 2007

The IEDC has flagged an interesting plan to boost innovation in Oregon USA.

It focuses on supporting place-based innovation capacity and involves $38 million for initiatives to enhance industry competitiveness, improve technology commercialization etc. Recommendations include:

§          the creation of new angel networks across Oregon.
§          new research centers for wave energy technology, nanotechnology, and drug discovery.
§          extensive efforts to support existing firms in the manufacturing, food and seafood industries. 

Access the 2007 Oregon Innovation Plan   

VC Accelerator (BEST PRACTICE)

August 14, 2007

 When the Venture Capital model was created, the typical VC firm raised a moderate-sized fund and assisted in the building of those start-ups. Today, these characteristics are no longer the norm. They are more risk adverse, and as VCs raise larger sums, they deploy their funds in larger increments.   

The Rise of Angels: Increasingly, angel investors invest their own money in early stages of private, high-growth ventures – and cite local economic growth, use of their expertise, and personal enjoyment as reasons for funding rapidly growing firms (Shane, 2005). Angels tend to invest close to where they live, often within a 3-4 hour drive from their office (Shane, 2005; Freear, 2002). This proximity allows angels to be involved in the ventures, and to find deals through their networks (Shane, 2005). 

Accelerator model: A new form of early stage funding is emerging. The “Accelerator” model is not a business incubator – it’s a full partnership. It provides more than space and common management services. It helps form companies as legal entities, interviews and hires the appropriate management team.  Start-ups wanting these benefits compete for slots on the accelerator’s “team”. The business idea is less important than the individuals. By assembling groups of entrepreneurs, they will hatch more and better ideas. Further, accelerators are concentrating on specific industries. The Foundry, Inc., located in Menlo Park, Ca. was the first-known accelerator. Formed in 1998, it focuses on medical devices. It is funded by notable VC firms Morgenthaler Ventures and Split Rock Partners. 

Go to Finding Business Idols: A New Model to Accelerate Start-Ups

Canadian rebuts cluster critics

October 17, 2006

Topical paper by Indira Singh, Office of the Ministry of Northern Development & Mines, Ontario indira.singh@ndm.gov.on.ca). Addresses common concerns about clusters.

1. Cluster definitions are broad and ambiguous – clusters vary due to size, structure of industries, origins, performance, etc. Boundaries of clusters evolve. As new firms and industries emerge and pursue a global strategy, the stage of the cluster evolves. Part of the reason why different types of governments can adopt cluster strategies is precisely because the approach is so flexible.

2. May not be applicable to rural areas (lack the necessary scale) – there are successful small clusters in regions e.g. Renfrew, Ont. (pop. 10,000); Montebelluna, Italy (pop. 25,000); Timmins, Ont. (pop. 75,000) and Dalton, Georgia (pop. 25,000). Cluster theory and principles are not exclusive to urban areas. Empirical evidence from developing countries shows that clusters exist in rural areas.

3. Communication technology is replacing the need for spatial or geographic clustering – while ITC has made e-education, e-business and telecommuting possible and profitable, but face-to-face interactions that support an information rich environment are still needed. Both research and empirical evidence support the view that tacit knowledge is critical to innovation. Tacit knowledge is not easily transferable through technology. Clusters gain power through personal collaboration.   

4. Scarcity of research on effectiveness of the cluster approach  – clusters require a decade or more to develop depth and gain competitive advantage. There is a lack of available information. Intangible assets (trust, social capital and inter-firm linkages) are difficult to measure. The cluster model is effective for several reasons.
          sector-specific strategies usually compartmentalized – but clusters are integrative.
          clusters drive innovation, and innovation drives productivity.
          Clusters break down silos, promote social capital, facilitate tacit knowledge. 

From a public official’s point of view, clusters promote horizontal collaboration and strategic partnerships…focus on strengthening economic foundations (infrastructure, workforce development) and brings coherence and coordination to programs and funding at various levels of government that usually exist in isolation and lack cumulative impact.

Spokane, Washington – leveraging alumni

June 17, 2005

People grew up in your neck of the woods, and moved on…people have visited for annual events and moved on…people went to school there and moved on.

Do you see the trend here?…they all move on!  

Jack Schultz, the author of Boomtown USA (featured often on this blog), says that Spokane, Washington State, has a program that markets the city to alumni of the universities and colleges in the region.

They concluded that for 4 years (sometimes more) these students build nostalgic connections to the community, but once they get their degree they leave town.  When Spokane recognised that there was a crop of productive, contributing citizens slipping through their fingertips they did something about it.

The Spokane Regional Chamber of Commerce has printed postcards that economic development groups can use in the “Homecoming Spokane” campaign. They’re following up the cards with alumni events, profiling recent returnees in alumni magazines, and promoting the city at sporting events around the country.  They sent leaflets to 300 alumni in Washington, DC. – 50 attended a reception, and one has moved back to Spokane and two others are thinking about it.

Visit http://www.movetospokane.com to read stories of returnees and the lives they’re building in Spokane.