Stronger Economies TogetherCluster Module

Bob Shriver & Karen CraigNevada Venture Accelerator

February 16, 2012

Cluster

• A geographic concentration of interdependent, collaborating and/or competing businesses and related institutions that draw productive advantage from their mutual proximity and connections…

All right, said another way… A CLUSTER IS

An economic strategy focused on

interconnected businesses within a

regional area

Another Type of Target Cluster….

Cluster analysis

• Helps diagnose a region’s economic strengths and challenges

• Identifies realistic ways to shape the region’s economic future.

THE FOUNDATION OF A REGIONAL ECONOMY IS A GROUP OF CLUSTERS…

.

not a collection of unrelated companies!

Four Rules of High Performing Regions

1. Focus on your region not your jurisdiction

2. Competitive clusters drive regional performance

3. Create regional advantage to enable high performance

4. Collaborative culture enables high performing regions

Companies cluster together because

• Each one benefits from being located near other similar or related companies

• They have competitive strengths and needs

Groups are More Cost Effective

• It’s more beneficial and important to work with groups of companies on common problems– e.g.,

• Skills training• Tool & equipment

modernization• Finance capabilities

Lower Risk

• New suppliers proliferate within a cluster because a concentrated customer base lowers risk

Gaps Create New Businesses

• Individuals working within a cluster can more easily perceive gaps in products or services around which they can build a new business

Cluster thinking teaches policymakers & ED practitioners to:

• Build on unique strengths of your region

• Engage cluster members in your region

• Dialogue continuously with the companies and support entities in your clusters

What are Sectors?• Primary: those

industries involved in extraction or agriculture

• Secondary: industries that manufacture goods

• Tertiary: industries that provide services, e.g., financial, transportation, retail

• Quaternary: knowledge industry focused on technology R&D, design and development

Examples of Clusters We all know Silicon Valley….

Omaha’s telemarketing/data centers

• Back office telemarketing service – strategic air command center

Las Vegas amusement/casino/conventions California Wine Industry

A Regional Cluster Example• The greater Reno-Carson

Area is a hub of small productions machining and electronic component job shops

• Many re-located to the are in the late 1980’s and 1990’s primarily from southern California due to the collapse of the aerospace industry

Regional Manufacturing Snapshot

• 125+ Machine (precision) shops• 20+ High-performance automotive parts

manufacturers• 20+ Electronic components • 10+ Gaming device• 15+ Aerospace components• 10+ Plastics/composites

SummaryBusiness Cluster 101

Clusters

Productivity

Prosperity

QUESTIONS?Discussion

For Example – Plan Similarities

• 2006 NVision

• 2010 Community Assessments

• 2012 GOED State Plan

Plans + Commonalities + Actions

NVision 2006

NVision 2006 Target Industry Recommendations

NVision 2006 Target Recommendations Per County

Community AssessmentCommonalities

Nevada State Plan 2012

Nevada State Plan 2012

Nevada State Plan 2012

Mining Cluster Supply Chain

Regional strengths attractive to a wide range of people and businesses• Abundant recreational opportunities • Excellent business cost climate, with low taxes

and energy costs • Strong sense of community pride and excellent

quality of life for families and retirees • Central location in Western U.S., with easy access

to mountains, coasts, and large urban areas • Expanding presence on the national scene

Our Greatest Weakness!

Ten Priority Actions