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Tech Clusters in Southern Arizona Examined

Arizona was one of the first states to embrace cluster-based economic development in the early 1990s. While the formal clusters have had varying degrees of
success since then, one of the challenges of a cluster-based approach to technology-based economic development is the fractionalized focus across sectors.
Because of this, clusters can end up competing against each other for limited public resources, making cross-sector strategies difficult to identify or implement.

Research and studies also are usually concentrated on a particular sector rather than looking at the similar needs and issues that arise in several clusters or span
many clusters.

The University of Arizona released a study earlier this year that establishes for the first time in Southern Arizona baseline measurements for all six of the region’s
technology clusters: aerospace, bioindustry, environmental technology, information technology, optics/photonics, and plastics and advanced composite materials.

By designing a study that examines all six clusters using a consistent methodology, the University’s Office of Economic Development felt the results would facilitate
future evaluation of the health and progress of each of all clusters. The study captured primary data in many areas, including interaction between firms and clusters,
workforce, finances, longevity, ownership and size. The impact of September 11 also is examined.

The results revealed that despite nearly a decade of cluster-based ED at the state level, there remained tremendous opportunity to strengthen the region’s
competitiveness through the benefits of partnering, strategic alliances, joint ventures and basic networking:

The number of firms engaging in collaboration and joint ventures was very low — ranging from 8 to 22 percent across the sectors.
Approximately 20 percent of the firms involved in the survey purchase R&D services, and two-thirds of those acquire some or all of that research in
Southern Arizona. Only 12 percent of other procurement budgets is spent in the Tucson area.
More than 50 percent of the industrial participants in the project did not belong to any of the cluster organizations currently; the prospects for greater
alliances and partnerships is greatly enhanced, particularly in clusters with participation rates of less than 15 percent.
A full 86 percent of the tech firms used the Internet for developing buyer-seller relationships.

The Office of Economic Development further points out the project yielded two additional and equally valuable resources for the region: a directory of profiles for
more than 400 tech firms located in the area and extensive supply chain and procurement information for use in Tucson’s business assistance efforts. The complete
Industry Clusters in Southern Arizona 2001 Status Report can be downloaded at: http://oed.arizona.edu/updates.htm

SSTI Weekly Digest
A Publication of the State Science and Technology Institute
State Science & Technology Institute, 5015 Pine Creek Drive, Westerville, Ohio 43081
Phone: (614) 901-1690 Fax: (614) 901-1696
Email Address: [email protected] Web Address: http://www.ssti.org

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