The Brookings Institution published new research this morning on “cluster” initiatives — when cities decide to center their economic development strategies around one or two industries. I’ll dig into more of the findings in a separate post for VentureBeat, but I wanted to highlight some aspects I imagine readers of this newsletter will be interested in. First, the report identified five traits shared by successful cluster initiatives:

1. They’re focused on creating a whole ecosystem, not just quick job gains.
2. They’re driven by the private sector but collaborate with public institutions.
3. They have a long-term mindset and are unafraid to take risks.
4. There are clearly identifiable leaders within the initiative.
5. They have a physical center to serve as “visible proof” that business is booming.

The report also used five regions/cities with cluster initiatives as case studies: Central Indiana (agriculture, life sciences), Milwaukee (water technology), St. Louis (ag tech), Syracuse (drones), and Upstate South Carolina (automotive research). I’ve only read through the St. Louis case study thus far, but a few points stand out.

While St. Louis’ initiatives in ag tech haven’t created new Fortune 500 or unicorn companies, there are signs that the effort is encouraging new startup formation — which can pay off economically, albeit not always in a flashy way. In 2014, nearly 10 percent of businesses in the St. Louis metro were less than a year old, compared to 7 percent in 2009.  Additionally, the ag-tech cluster has seen an increase of nearly 2,000 research jobs between 2000 and 2015 — which again, is something that might not be measured by traditional economic development studies. This underscores the importance of figuring out which metrics are right for capturing traction in your city.

More importantly, I’m curious to hear your thoughts on how effective (or not) a cluster initiative has been in your city. Do you feel like it’s given you a unique advantage or that it is difficult operating in an industry that doesn’t get as much attention? Do you think that your city’s economic development efforts are too dominated by large industries, or do you truly feel like they get at your city’s unique advantages?

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Thanks for reading, and send me an email with your commentary and feedback. You can also sign up here for VentureBeat’s Heartland Tech newsletter to get this column in your inbox weekly.

Anna Hensel
Heartland Tech Reporter

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