The Indy Star reported comments by Lilly CEO John Leichleiter speaking at a conference in Washington DC sponsored by The Brookings Institute. He praised Federal efforts to support regional innovation clusters in the life sciences arena. He said such policies "can unleash America's true capacity for innovation".
Clusters are geographic concentrations of interconnected firms, and supporting or coordinating organizations. Silicon Valley is the most famous example in the US. The Brookings Institution, a nonprofit think tank, contends that clusters produce lasting value in economies. According to the Insitute, the US has lagged in supporting clusters as compared to other nations but is catching up.
"We know that when you get businesses, government, academia and nonprofits together in one place, pulling toward similar goals, good things happen," Commerce Secretary Gary Locke told the forum.
Michael Porter has published extensively on clusters. According to him, clusters arise because they increase the productivity with which companies can compete. The development and upgrading of clusters is an important agenda for governments, companies, and other institutions. Cluster development initiatives are an important new direction in economic policy. The Cluster Mapping project at Harvard will identify and map all US clusters for the government to aid policy formulation and support.
Porter explains how clusters affect competition in three broad ways: first, by increasing the productivity of companies based in the area; second, by driving the direction and pace of innovation; and third, by stimulating the formation of new businesses within the cluster.
Geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance. The more complex, knowledge-based, and dynamic the world economy becomes, the more this is true.
Clusters represent a new way of thinking about national, state, and local economies, and they necessitate new roles for companies, government, and other institutions in enhancing competitiveness.
Posted by Bruce Lehr September 24th 2010.