Will future high-tech clusters match the success of Silicon Valley and Boston clusters?

New Orleans –  In a recently published article for FDI Intelligence,  Michal Kaczmarki discussed the attractiveness of creating a “high-tech hub” for communities looking to generate new sources of revenues, boost job creation and generally raise the profile of a location. Communities tend to me stuck in e “me too’ mode when considering economic development strategies. I remember the early economic development included building festival market places, convention centers, aquariums, and great urban parks. The new  formula is to replicate Silicon Valley and Kendall Square in Boston. But creating a successful cluster in Hometown USA is a far less clear cut choice given the multitude of factors, from the quality of local workforce, specialized facilities, university driven innovation, state and city support and accessible investment capital.

As noted by Michal Kaczmarki, high-tech clusters have attracted more than $472bn in FDI and created 1.4 million jobs in the past dacade, according to data from greenfield investment monitor fDi Markets. Moreover, investments into sectors such as life sciences, software and IT, and ICT not only create new, well-paid jobs, but they are also seen to bring with them a certain cachet. Most of this investment and wealth creation occurred in a dozen or so locations scattered through the world.

When a cluster is successful, the economic benefit is enormous. Huge increases in personal income, government revenues, high wage jobs and for housing. A successful cluster will cause a boom in building trades, supplies, and retail.  It should not be surprising to anyone, that every city and state is now planning, promoting and/or building to become the next Silicon Valley. A few have zero chance of survival because that lack the key ingredients and patience to actually be competitive. On the flip side, even fewer will ever “catch lighting in a bottle” and grow to the size or level of success Silicon Valley or Boston have. I will take bets, that if they had to start from scratch today, that even Silicon Valley and Boston could replicate their success. So most of us are going to fall somewhere in the middle. Even so, each cluster will have dramatic impact on the local and regional economies.

I love this quote by Nick Smillie, Associate Director at AED International, a company that specializes in advanced science and technology park development, who said: “Calling yourself a tech hub is not going to make you a tech hub. Neither will opening up a high-tech park or a business incubator.” Mr. Smillie is spot on, it require a holistic approach with a focus on the area’s core strengths. It will require relentless energy at building local, regional and global collaborations between industry and academia. Unfortunately, the membership of centralized economic development agencies, be they the non-profit chamber types or the public-private partnership models, do not have the lead time to see the long term development begin to pay benefits. They either hap-heartily work on the development or abandon the pursue to soon.  

Political, Community and economic development agency leaders need to understand that clusters are best created and function long term by means of  “Subsidiaritymodel which as defined in Wikipedia as an organizing principle of decentralization, stating that a matter ought to be handled by the smallest, lowest, or least centralized authority capable of addressing that matter effectively. The efficiency of a cluster like that of a campus is of a manageable size to actually be competitive in the business marketplace – generally speaking, cities don’t do economic development very well. Properly structured and supported Clusters provide the unique opportunity to gather all of the ingredients necessary to create the propinquity that a master planned area or district can provide. Otherwise, you have universities and their research and tech transfer groups, an incubator or two, hospitals and a dysfunctional eco-support system.

Once created, the identity provides the right size so as to not overwhelm all other economic development strategies and to the correct scale for branding, collaboration, marketing, development and management of both the industry sector and the specialized facilities within the true core of A+ assets of local university research. Once framed you are now set to create a truly competitive high-tech hub that is aligned with all levels of education and workforce training, attracts capital, lures and/or develops the next wave of Apple’s, Google’s, and Amgen’s to create high wage jobs, advocates for beneficial public policies and builds the complete eco-support infrastructure of the future successful location.


How high-tech clusters are defying science and logic – Sectors – fDiIntelligence.com.


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