Focusing on Regional Competitive Advantage Module Five.
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Transcript of Focusing on Regional Competitive Advantage Module Five.
Reflecting on the Previous Session
• What did you find most useful or valuable?• What progress have you made since then?• Any questions or clarification needed?
Overview of Module Five• Investigate the elements that contribute
to regional economic advantage
• Explore regional data that may help identify regional clusters
• Select clusters for further exploration
Competitive Advantage
Business shapes the economic value of a
region, but places can help shape, nourish,
and sustain local enterprises and
industry.
Exploring Competitive Advantage
Demand
Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and
Supporting
Industry
Competitive Advantage Elements
Based on Porter’s Diamond Theory – Porter, M. (1990)
Demand Conditions
What conditions influence demand
for goods or services produced
in the region?
Demand
Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and Supporting
Industry
Competitive Advantage Elements
Factor Conditions
• Infrastructure
• Resources & Materials
• Skilled Workforce
Demand
Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and Supporting
Industry
Competitive Advantage Elements
Who are the region’s workers? Skilled/unskilled Labor force participation rate Unemployment rate Occupation mix Experience/age
Factor Conditions: Workforce
• Region’s portfolio of businesses• Entrepreneurship activity and support• Mix of industries
Firm Strategy, Rivalry, Composition
Demand
Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and Supporting
Industry
Competitive Advantage Elements
Related and Supporting Industry
Do industries buy and sell from each other regionally?
Do any strong value chains exist in the region?
Demand
Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and Supporting
Industry
Competitive Advantage Elements
Value Chain Example
Grape Stock
Fertilizers, Pesticides, Herbicides
Grape Harvesting Equipment
Irrigation Technology
Specialized Publications
Public Relations & Advertising
Labels
Caps & Corks
Bottles
Barrels
Winemaking Equipment
Educational, Research & Trade Organizations
Growers/Vineyards
Wineries/ProcessingFacilities
State Government Agencies
California Agricultural Cluster
Tourism Cluster
Food Cluster
Wine
Source: California Department of Food and Agriculture
Industry Clusters Defined
Groups of similar and related firms in a defined geographic area that share common markets, technologies, worker skill needs, and that are often linked by buyer-seller relationships
Two Types of Clusters
• Value chains (Vertical clusters): working together toward a common product
• Competing (horizontal clusters): drawing from the same raw materials, infrastructure, labor force
Auto Industry
Software Industry
Identifying Industry Clusters
• Views firms and industries as interdependent, not isolated
• Identifies value chains• Discovers collections of businesses
producing similar outputs
Understanding ChangesMoving Left or Right
Relative Concentration of Industryin the Region Compared to the Nation
Understanding Changes
EmergingGrowth in % Jobs over Time
Lower Concentration of Industry in Region
StarsGrowth in % Jobs over Time
Higher Concentration of Industry in Region
TransitionalDecline in % of Jobs over Time
Lower Concentration of Industry in Region
Mature
Decline in % of Jobs over Time
Higher Concentration of Industry in Region
Location Quotient: Measure of Concentration of Industry
Per
cen
t C
han
ge
in J
ob
s o
ver
Tim
e
Behind the Bubble Chart
Location Quotient more than 1 = Concentration
INSERT YOUR REGION’S CHART
LIKE THIS EXAMPLE – Move line to divide 1+ LQ
Behind the Bubble Chart
Industries with Greatest Percentage Growth
INSERT YOUR REGION’S CHART
LIKE THIS EXAMPLE – Adjust red circles to top 5
Regional Industrial Clusters: Digging Deeper
• Identify the industries within the cluster• Determine if growing or declining• Evaluate regional capacity• Identify potential leakages & opportunities • Determine potential strengthening strategies
Cluster Choices• Advanced Materials• Agribusiness, Food Processing &
Technology• Apparel & Textiles• Arts, Entertainment, Recreation
& Visitor Industries• Biomedical/Biotechnical (Life
Sciences)• Business & Financial Services• Chemicals & Chemical Based
Products• Computer & Electronic Product
Manufacturing• Defense & Security• Education & Knowledge Creation
• Electrical Equipment, Appliance & Component Manufacturing
• Energy (Fossil & Renewable)• Fabricated Metal Product
Manufacturing• Forest & Wood Products• Glass & Ceramics• Information Technology &
Telecommunications• Machinery Manufacturing• Mining• Primary Metal Manufacturing• Printing & Publishing• Transportation & Logistics• Transportation Equipment
Manufacturing
Examining Clusters in the Region
What industries:• Seem worth exploring further? • Should the region avoid investing for the
future? • May be viable future regional industries? • Are declining but may be worth reviving?
Homework for Next Time
• Identify the potential clusters for the region
• Read the “C.A.R.E. for the Region” flow chart to prepare for Module Six
Final Reflections
What topics did you find most helpful?
What did you find confusing?
What other data do you need?
Other items you want to mention?