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Wednesday, October 13, 2010
How I See It
New England tech clusters need more funding, leadership
By Michael Gurau, president of Clear Innovation Partners
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In September, I attended the Regional Innovation Cluster event in Washington, D.C. There, heads or assistant heads of four federal agencies — Department of Energy, Department of Commerce Economic Development Administration, Department of Agriculture and Small Business Administration — described their unprecedented and coordinated effort to spur regional cluster development in the U.S.
Brookings Center for American Progress’ Bruce Katz announced publication of a report on the “cluster moment” that exists as a result of the Obama Administration’s purposeful plan to drive innovation through this approach to regional economic development.
SBA Administrator Karen Mills described this report at as “a seminal, state of the art paper on clusters.” Recall from my April 2009 MHT article that Mills co-authored her own Brookings cluster report in which she laid out the road map she used to architect the federal strategy that now appears partly realized. In addition to having a clear commitment by agency heads, the government has formed a Taskforce for Advancing Regional Innovation Clusters (TARIC), an effort including representatives from seven federal agencies. Mills described as surreal the experience of sitting at this event with other agency heads describing the very actions she’d “conjured up” in her report.
Popularized by Harvard Business School professor Michael Porter, clusters describe self-organized, regionally defined vertical industry sector stakeholders and related organizations — universities, risk capital, incubators, specialty institutes, etc. Benefits include increased linkages among cluster market actors through knowledge sharing, networking and collaboration, leading to greater innovation, competitiveness, productivity, higher wage jobs and economic growth. Clusters are most effective when led by the private sector. They historically are implemented on a top-down approach. So this bottom-up federal effort is unprecedented in its breadth (seven agencies), leadership (the president) and funding support (more than $350 million in FY 2011).
The 2011 budget includes allocations for regional innovation or cluster funding from no less than five agencies. The Energy Efficiency Regional Innovation Cluster RFP issued by the Department of Energy is one of the first (and, at $122 million, most significant) initiatives supporting this new approach to clusters. A consortium centered at MIT was an applicant, although a Pennsylvania group won that award. Subsequently, four other agency announcements occured over the summer, and New England took its share, including one from EDA (Porter’s Institute for Strategy and Competition for a $1.5 million cluster mapping project), one of five from DoE (Fraunhofer Institute in partnership with New England Clean Energy Council $1.05 million), and one of 10 from SBA (Connecticut Center for Advanced Technologies’ multi-state Hydrogen Fuel Cell Coalition $600,000).
It’s an exciting time for those organizations with the capacity, asset base and will to catalyze, expand and nurture cluster development. Tech and trade councils are in unique positions to lead regional clusters, given that they tend to be conveners of sector participants within a region. New organizations are forming — including one that I am leading — to help organizations identify, catalyze and support clusters, whether in limited single jurisdiction regions (e.g. Greater Boston) on a multi-regional basis such as the Fuel Cell Coalition.
The Council on Competitiveness’ latest report describes key skills required to facilitate cluster development. For New England to continue to get its fair share of cluster funds, more private sector cluster leadership — trained on the language and practice of cluster development — will be needed. E-mail me if you have interest.
Michael Gurau is a regular contributor to MHT. He can be reached at mgurau@clearinnovationpartners.com.
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