Building Strong Clusters for Strong Urban Economies: Insights for City Leaders from Four Case Studies in the U.S.

August 11, 2017

Every metro area in the U.S. has strong industry clusters that are readily identifiable and reflect the unique compet - itive advantages of the region--Oil and Gas in Houston, Automotive in Detroit, and Financial Services in New York City are just a few examples. These clusters represent the backbone of their metro economies. The importance of clusters to regional competitiveness and economic performance was first established in the 1990s. Since then, research has shown that the co-location of busi - nesses in clusters increases the productivity of compa - nies and job creation, drives innovation, stimulates the formation of new businesses, and supports the survival and growth of small businesses.

WHAT IS A CLUSTER? A cluster includes closely related and intercon - nected industries operating within a specific geog- raphy. The companies operating within a cluster are connected by a shared workforce, supply chain, cus - tomers or technologies. Every cluster includes core businesses and industries, and the companies that support them, which forms a mutually beneficial business ecosystem. Clusters occur organically and reflect the unique assets and core competencies of a given region that create unique competitive advantages for certain industries.

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