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Print Edition StoriesWednesday, April 14, 2010
How I See It
SBA's Mills making progress in forming clusters
By Michael Gurau, president of Clear Innovation Partners
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In a piece in this column a year ago (“Of Industry Clusters, Venture Capital and the Feds,” MHT 4/3/09), I noted that the then recently appointed Small Business Administration chief Karen Mills would focus some of her energy on aligning SBA with other federal agencies so as to create a more unified development strategy built on industry cluster theory.
Industry clusters — geographic concentrations of interconnected companies, suppliers and service providers in a region — represent an economic development strategy popularized by Harvard Business School professor Michael Porter, a collaborator and mentor to Mills. Porter has been the most visible and active catalyst for cluster theory as a strategic imperative for regional innovation and economic development.
At a recent conference Mills reflected on her first year in office, not from the perspective of where she’s spent the majority of time — trying to re-activate credit markets for small businesses — but on the success she had perceived in catalyzing alignment of federal agencies. There’s good evidence that Mills’ fingerprints can be seen in both current and future initiatives.
The most tangible evidence of agency alignment shows up in the Department of Energy’s $130 million Energy Efficiency Building Systems Regional Innovation Cluster request for proposals. With financial support from DOE, SBA and other agencies, this may be the first indication that Mills may be practicing what she preached.
Further evidence of Mills’ agenda might be found in looking at the Obama Administration’s 2011 budget. Obama has been talking about innovation clusters since 2009, inspired by Mills. In the 2011 budget, at least four agencies are proposing cluster initiatives along these lines:
•The Department of Commerce’s Economic Development Administration has long provided co-funding for cluster research at state and regional levels. EDA’s budget requests $75 million for innovation and cluster-related research.
•The Department of Agriculture describes allocation of 5 percent to 20 existing programs for a Regional Innovation Initiative. The $135 million is to be used to support “regional pilot projects tailored to local needs and opportunities. This effort will allow USDA to prioritize areas with the greatest need and potential by encouraging comprehensive and innovative approaches to foster rural revitalization.”
• Mills’ own agency proposes a $14 million pool to support business growth and cluster development. The budget includes $3 million for competitive technical assistance grants to expand SBA’s Emerging Leaders initiative and $11 million in competitive grants to enhance small business participation in regional clusters.
•The Department of Labor proposes a “Workforce Innovation Fund” of up to $108 million to help ensure that the work force development system aligns with regional cluster growth.
New England has the asset base — workforce, universities and risk capital — to be a dominant regional player. Greater Boston is already one of the centers of cluster activity in the U.S. New England can benefit from linking, leveraging and aligning its assets in ways that mirror the federal government’s agency alignment. Indeed, there’s evidence that this is already happening. In response to the DOE RFP noted above, MIT appears to be reaching out to other New England players in the energy cluster so as to present a super-regional approach that will draw this significant federal grant to New England.
The promise of clusters — greater competitiveness, innovation, high wage jobs and economic activity — is fostered by greater linkages between the varied players in a cluster. More regional collaboration will strengthen and extend greater Boston’s role as the economic hub of New England and enable the region to tap federal initiatives coming down the pike and drive innovation and economic development.
Michael Gurau is a regular contributor to Mass High Tech. He can be reached at mgurau@clearinnovationpartners.com.
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