Download - Rural Knowledge Clusters
Rural Knowledge Clusters:Strategic Planning & Practical Application
State and Local Policy Program
Lee Munnich
Senior Fellow and Director
State and Local Policy Program
Humphrey Institute of Public Affairs
University of Minnesota
Phone: (612) 625-7357
E-mail: [email protected]
Overview
Defining rural knowledge clusters and keys to cluster success
Minnesota successes and other cluster examples in Southern states
Steps to developing a rural knowledge cluster initiative
Rural Knowledge Clusters
Specialized networks of innovative, interrelated firms
Centered outside major metropolitan areas
Deriving competitive advantages primarily through accumulated, embedded, and imported knowledge among local actors
Keys to Cluster Success
Understand your local knowledge base. Foster linkages between firms and the
local institutions that support them. Develop strategies for promoting
innovation around rural knowledge clusters.
Don’t try to go it alone – promote a regional vision to guide strategies.
Minnesota Success Stories illustrating
Competitive advantage History Institutions
Case Example 1:Competitive advantage
Factors that give local firms a market advantage:
Supply or demand in the marketplace
Related industries Local rivalry
Northwest Minnesota: Key FactsPopulation (2000): 88,472*Major Cities: Crookston: 8,192 East Grand Forks: 7,501 Roseau: 2,756 Thief River Falls: 8,410Population Density (pop/sq mi): 11 (Twin Cities: 601; MN state: 62)Population Growth (1990-2000): -2%(MN non-metro: 4%; US non-metro: 9%)Job Growth (1990-2000): 16% (MN non-metro: 25%; US non-metro: 18%)
*Kittson, Marshall, Norman, Pennington, Polk, Red Lake, Roseau counties (Region 1)
Source: Census Bureau; Bureau of Economic Analysis
Thief River Falls
Northwest Minnesota: Recreational Transportation Equipment
Key IndustriesOther transportation
equipment manufacturing (NAICS: 3369/SIC: 3799) 2000 Employment:
2,197, 20.5 times more concentrated than U.S. overall
Source: County Business Patterns
Thief River Falls
Competitive Advantage:Recreational Transportation Equipment
Key Employers Arctic Cat (Thief River Falls)
1,500 employees Machinewell (Grygla)
110 employees Polaris Industries (Roseau)
2,100 employees TEAM Industries (Bagley)
250 employees
Source: MN Dept of Trade and Economic Development
Thief River Falls
Case Example Two:History
An historical base of knowledge about an industry or technology that is used to create new products or services
Alexandria: Key FactsPopulation (2000): 210,059*Major Cities: Alexandria: 8,820 Fergus Falls: 13,471 Moorhead: 32,177Population Density (pop/sq mi): 26(Twin Cities: 601; MN state: 62)Population Growth (1990-2000): 6% (MN non-metro: 4%; US non-metro: 9%)Job Growth (1990-2000): 25% (MN non-metro: 25%; US non-metro: 18%)
*Becker, Clay, Douglas, Grant, Otter Tail, Pope, Stevens, Traverse, and Wilkin counties (Region 4).
Source: Census Bureau; Bureau of Economic Analysis
Alexandria
Alexandria: Automation and Motion Control Technologies
Key IndustriesPackaging Machinery
(NAICS: 3339/SIC: 3565) 2000 Employment: 1,209, 4.5 times
more concentrated than U.S. overall
Machine Shops and Related (NAICS: 3327/SIC: 3599, 3451, 3452)
2000 Employment: 844, 2.1 times more concentrated than U.S. overall
Source: County Business Patterns
Alexandria
Alexandria: Automation and Motion Control Technologies
Key Employers 3M (Alexandria) 317 employees Alexandria Extrusion (Alexandria) 274
employees Brenton Engineering (Alexandria) 127
employees Douglas Machine (Alexandria) 492
employees Minnesota Automation (Crosby) 120
employees Massman Automation (Villard) 100
employees Schott Automation (Garfield) 35 employees Thiele Engineering (Fergus Falls) 81
employees Source: MN Dept of Trade and Econ Development
Alexandria
Case Example Three:Institutions
formal and informal; foster the creation, diffusion, and renewal of the local knowledge base
Winona: Key Facts
Population (2000): 112,517*Major Cities: Winona: 27,069 Lake City: 5,054Population Density (pop/sq mi): 44 (Twin Cities: 601; MN state: 62)Population Growth (1990-2000): 5% (MN non-metro: 4%; US non-metro: 9%)Job Growth (1990-2000): 21%(MN non-metro: 25%; US non-metro: 17%)
*Blue Earth, Nicollet and Waseca counties Source: Census Bureau; Bureau of Economic
Analysis
Winona
Winona: Advanced Composite Materials
Key IndustriesCustom compounding of purchased
resin (NAICS: 325991/SIC: 3087) 2000 Employment: 517, 5.37 times
more concentrated than U.S. overall
All other plastics products manufacturing (NAICS: 326199/SIC: 3089)
2000 Employment: 241, 3 times more concentrated than U.S. overall
Source: County Business Patterns
Winona
Winona: Advanced Composite Materials
Key Employers
RTP Company (Winona) 407 employees Cytec Engineering (Winona) 175 employees Ticona Celstran (Goodview) 69 employees We-no-nah Canoe (Winona) 75 employees Watlow Polymer Technologies (Winona) 24
employees AFC Strongwell (Chatfield) 200 employees Composite Products Inc. (Winona) 50
employees CodaBow Composites (Winona) 15
employees Miken Composites (Caledonia) 15 employees Geotek (Stewartville) 35 employees
Source: MN Dept of Trade and Economic Development
Winona
Winona: Rural Knowledge Cluster Profile
Advanced Composite Materials Mfg
Competitive AdvantagesDiverse local industry baseSkilled worker base around
composite engineeringCooperative relationships
History•Miller Brothers – formed
Fiberite after WWII•Initial growth in aerospace,
military applications•Spin-off/startup activity
to new firms
Institutions•SAMPE – professional society•Winona St – composite eng
•COMTEC – applied R&D/testing•Winona Composites Consortium
•Technical college: custom training, technical education
Firms and Industries•Composite materials
producers
•Existing products improved through use of composite materials (i.e. canoes, heated plastics,
automotive products, violin bows)
A Cluster in Turmoil:Precision Agricultural Equipment in Southwestern Minnesota
Agricultural sprayer technology
Highlights potential pitfalls of having a cluster of companies doing essentially the same thing, rather than diverse activities around the same technology
Vulnerability that comes from non-local ownership
Suffered from corporate consolidations, layoffs, and plant closings
Minimal start-up activity
Current and Emerging Industry Clusters
Overview of past research Data on potential emerging
clusters
State and Local Policy ProgramRegional Cluster Studies
Twin Cities Southeast Minnesota
Southwest Minnesota
Northwest Minnesota
NortheastMinnesota
Printing and Publishing
Computers and
Software
Medical Devices
Machinery andMetalworking
Financial Services
Composites
Food Processing
Printing, Publishing, and
Software
Industrial
Machinery and
Computer Manufacturing
Computer and Electrical Components
Manufacturing
Value-Added Agricultural
Cooperatives
Agricultural Equipment Manufacturing
Dairy Processing
Recreation and Transportation
Equipment Manufacturing
Value-Added Agricultural Processing
Wood Products
Tourism
Forest Products
Information Technology
Health Services
Tourism
RTS Snapshots of Rural Innovation: Rural Cluster Vignettes
Auto Industry Supply Chain Automotive Carpet Manufacturing Crafts Furniture (Household) Gaming Hosiery Hosiery Houseboat Manufacturing Oil and Gas Pottery
Central TennesseeNorthwestern South CarolinaDalton, GeorgiaWestern North CarolinaNortheastern, MississippiTunica County, MississippiCatawba Valley, North CarolinaFort Payne, AlabamaSomerset, KentuckySouthern LouisianaSeagrove, North Carolina
Source: Stu Rosenfeld, RTS http://www.rtsinc.org/rc/rc_home.html
Identifying Clusters:Location Quotient
Measures employment concentration in a particular industry in a particular region
Measure of specialization LQ is calculated as a ratio of the industry’s
share of employment in the region to the industry’s share of employment in the nation LQ > 1 means that concentration of employment in
the industry in the region is higher than concentration of employment in same industry in the nation; i.e. the region specializes in that industry
Developing a Cluster Initiative: 6 Key Steps
1. Identify Cluster Candidates2. Select Key Industries3. Perform Stakeholder Analysis4. Hold Industry Stakeholder Roundtable5. Perform One-on-One Interviews6. Develop Action Plan
Knowledge Cluster Strategies Research and Innovation Cluster Branding and Awareness Strategic Partnerships Global Marketplace Knowledge Cluster Expansion
Cluster Initiative Sustainability
Project Team should be assembled prior to the cluster initiative development process
Concurrent to the development of the cluster initiative, Project Team requires training in: overall cluster approach and criteria for cluster identification qualitative assessment process design and coordination of cluster roundtables and
interviews
Conclusions
The cluster study approach: ensures that pertinent issues are brought to
the forefront, gives a voice to the region’s businesses,
leading to future economic development
And thus… secures the industries’ future secures jobs for the region’s residents motivates and engages industry leaders and
policy makers.
For further information:
Go to http://www.ruralvitality.orghttp://www.hhh.umn.edu/centers/slp/