Wednesday, December 22, 2010

How I See It

Clusters represent a bipartisan opportunity

By Michael Gurau, president of Clear Innovation Partners

Since April 2009, I’ve written a few columns for Mass High Tech on the Obama administration’s push for an economic and competitiveness development strategy tied to regional innovation clusters or RICs. In prior articles, I described the concept of clusters, SBA Administrator Karen Mills’ leadership in driving clusters, and the first round of competitive multi-agency awards for clusters.

The Obama administration funded more than $140 million of grants and contracts for RIC’s in 2010 and has more than $350 million budgeted for 2011. With mid-term election results likely to have an impact on any new Obama program, one could make the case that this initiative has no chance of going anywhere. I suggest otherwise, given clusters’ provenance both in previous Republican administrations and in one of its greatest advocates, a right-leaning Harvard Business School professor Michael Porter.

One of the earliest U.S. voices advocating cluster development as a framework for regional competitive strategy is the Council on Competitiveness, a policy organization formed in the Reagan years, with the goal of increasing American competitiveness in the global marketplace. The council is one of a small group of respected cluster research organizations — its Regional Initiatives reports serve as a valuable resource that describes and prescribe cluster development process and strategies. Porter — unquestionably the leading researcher and spokesman for clusters — served then and now on the council’s executive committee.

Porter’s support for a Republican viewpoint is not limited to the council. He was tapped to chair Mitt Romney’s Global Competitiveness Policy Advisory Group. Notwithstanding his political bent, Porter has proven himself accessible to all political parties through his Institute for Strategy and Competitiveness at Harvard, and has provided counsel to SBA’s Mills of her work. The ISC received $1 million this fall from the U.S. Department of Commerce (EDA) to support its long-standing cluster mapping initiative.

Another historical point: The America COMPETES Act  was signed by President Bush and became law in August 2007. This was an act, “to invest in innovation through research and development, and to improve the competitiveness of the United States.” COMPETES was re-authorized in May in the House by 262-150 — so it included more than a few Republicans.

In a tight fiscal environment, it turns out that clusters are not that expensive. As argued by Mills and others, cluster development is private sector led and provides good “bang for the buck.” Activating, growing and sustaining clusters involves gatherings of regional sector market actors and sustaining these connections over time, activities that can largely be carried forward by technology and trade organizations (and/or cluster development organizations such as the Mass Technology Leadership Council) with sponsorship support from professional services firms, utilities and other such players. While the government can play a catalytic role, the private sector can and should carry the ball to drive toward the benefits that accrue to well functioning clusters: productivity, innovation, higher wage jobs, and economic growth.

Given that cluster policy has its formative roots with Republican advocates, is inexpensive to implement and is private sector driven, there seems a unique opportunity for this issue to gain bi-partisan support. Republicans in Congress can be happy (and justified) to claim it as their own, while Democrats can speak to making clusters part of the federal government’s DNA. Cluster development is a long term game so there will be plenty of opportunity for future administrations — whether D or R — to continue to carry this ball forward. For now, it’s got sufficiently compelling optics — focused on regional innovation, led by private sector, inexpensive — to give each party something to crow about. 

 

Michael Gurau is a regular contributor to Mass High Tech.