Source: UNIVERSITY OF CALIFORNIA, DAVIS submitted to NRP
IDENTIFYING INDUSTRIAL CLUSTERS FOR ECONOMIC DEVELOPMENT: METHODOLOGY AND ANALYSIS
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
Reporting Frequency
Annual
Accession No.
0188780
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
Oct 1, 2001
Project End Date
Sep 30, 2006
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
UNIVERSITY OF CALIFORNIA, DAVIS
410 MRAK HALL
DAVIS,CA 95616-8671
Performing Department
HUMAN AND COMMUNITY DEVELOPMENT
Non Technical Summary
(N/A)
Animal Health Component
50%
Research Effort Categories
Basic
50%
Applied
50%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
61061103080100%
Goals / Objectives
1. The first research objective is to continue previous work on the development of a standard definition of industrial clusters that can be utilized in rural and urban areas, giving replicable results consistent with the data needs of economic development organizations. The result will be a preliminary catalog of these clusters by region in the state, with additional detail for selected counties as needed. 2. The second research objective is to show how the cluster methodology evaluates emerging and declining clusters in local areas and regions. The issue of emerging clusters is one of the most difficult to treat statistically, and research will look at alternative ways of identifying emerging clusters and evaluating the utility of each approach. 3. The third objective is to examine the specialized infrastructure in each region that supports the clusters and to explore how that infrastructure contributes to or limits the clusters which depend on it. For example, we understand the role of research universities in developing technology supporting new technology, but case studies are needed to show how the technology actually is transferred to industry. Five case studies will be completed. 4. The fourth objective is to explore how local areas can actually support the development of clusters in local communities. This objective involves studying how local economic development personnel and organizations actually work to utilize cluster methodologies to extend their economic development strategies. A series of interviews will be completed that follow up on previous work done by a student, Sarah Worley, for her thesis. About 40 organizations were interviewed and will be contacted again to see how their work has been enhanced by further cluster analysis.
Project Methods
Task 1. Cluster Identification. The cluster identification methodology being utilized in this study has been under development for several years by the PI and his colleagues. The first step is to utilize ES202 data and in each region to identify the level of concentration (location quotient) and relative competitiveness (relative growth rate or local differential in shift-share) of basic industries. Industries are then classified into a four-fold table based on concentration and competitiveness. The extent to which key industries are over-represented suggests the possibility of industries that have a strong competitive advantage. The next step is to determine if the firms have advantageous buyer-seller relations with other firms in the region and if they share an advantageous physical or social infrastructure. At the end of this step it is anticipated that about 10-15 major clusters will be identified for further analysis. Task 2. Emerging and Declining Clusters. Emerging clusters will be selected based on previous research and the availability of data. Research will explore a number of industries which have high growth but which are not yet concentrated in the regions because they are still a small part of a larger SIC code. A second challenge is discover emerging clusters which are part of many industrial categories. As such, employment in the various sectors may not show up until new data are collected. This task is seen as exploratory and more subjective, although descriptive material will be presented on a range of likely emerging clusters for subsequent analysis. Declining clusters will be worked out with the verification of an index methodology which shows how strong a cluster is and whether a cluster is losing its competitive edge. Task 3. Specialized infrastructure studies. The methodology for this task will be to develop models for each cluster that estimates the relative importance of major specialized industry structure and infrastructure variables identified in previous tasks and for which data are available. The model will evaluate factors such as locations of research universities with specialties in relevant fields, number of university graduates in occupations related to cluster, total number of graduates, number of workers trained in college, community college, and vocational programs, availability of venture capital, practices of legal specialists and other professionals, transportation and communications infrastructure, trade associations, marketing programs. Research will see if these capacities are related to concentration and competitiveness of cluster firms. Task 4. Local Use of Cluster Analysis. The final task examines the way local economic development agencies are using clusters of the sort identified in the previous steps. The major task here is to collect data from local economic development agencies on their cluster studies. The issue here is to contribute to policy analysis as well as economic development tools.

Progress 10/01/01 to 09/30/06

Outputs
Due to the passing of the P.I. earlier this year this project has been terminated.

Impacts
Due to the passing of the P.I. earlier this year this project has been terminated.

Publications

  • No publications reported this period


Progress 01/01/05 to 12/31/05

Outputs
This project is winding down now and I expect to finalize it by December 2006. The objective of the research project was to continue work on the definition and elaboration of the concept of industrial cluster. I have started another book on the California energy industry following the publication of Agile Energy Systems: Global Lessons from the California Energy Crisis (Elsevier Publishers, Cambridge, 2004.) This book has been well received, and as a follow-up I have proposed a more accessible and interpretive book that will deal with the challenges of energy policy in a changing world. Since our book was published, blackouts and grid failures have hit different parts of the world, natural gas has gotten much more expensive and no longer is seen as an easy solution to the energy crisis, and California has failed to resolve the basic supply and demand problems that led to the energy crisis in the first place. Nationally, the energy act similarly failed to set policies in place that are favorable to industry clusters in California. I am working on several additional cluster studies. First, I have revived an interest in highly energy efficient housing as part of the building industry cluster. The potential to save huge quantities of energy in cooling houses (mostly peak demand) remains one of the most easily tapped arenas for more effective energy policy. I have a proposal accepted to present preliminary results of this research at the prestigious ACEEE conference on buildings in Asilomar this summer. I will host another conference on housing and energy efficiency in cooperation with California Rural Housing Coalition. I have also started a project looking at the food processing industry and its cluster structure with Kathie Studwell of Applied Development Economics. This study will look at the interrelation of innovation and energy efficiency in the context of an industry with rapidly changing technology and increasing global competition. Finally, I have several papers on economic development issues that are being drafed. My earlier study of the link between the environmental technology industry and rural tourism in the town of Arcata was completed and needs to be published with information about its contribution to eco-villages.

Impacts
I have continued to participate in a national task force on the Hydrogen economy led by Jerimy Rifkin with the objective of furthering the potential hydrogen use in fuel cells for transportation and other uses. We expect this to have national and local policy impact. My work on entrepreneurship has included participating in a growing network of evaluators looking at the comparative impact of entrepreneurship, and it has taken me to Kentucky several times. Based on this exposure I have been invited to help the Great Valley Center develop projects in the California foothills. The impact of entrepreneurial development for California rural communities is very significant. I continue to be asked to testify to the legislature about California Enterprise Zones. I am on the board of the Western Rural Development Center (John Allen, Director), and am playing a leading role in that organization. The board will meet in Davis this Spring. The Center is a leading multi-state coordinating program for research and practice in rural economic development. I continue to be a Board Member of the California Association of Local Economic Development's (CALED) Economic Development Academy. The Academy will be more active this year. We imagine that the Academy will increasingly bridge practice and academic work in all California's cities and counties.

Publications

  • No publications reported this period


Progress 01/01/04 to 12/31/04

Outputs
This project has been going well this year, with the publication of my book which was completed and revised this year, and the initiation of a new emphasis. The objective of the research project was to continue work on the definition and elaboration of the concept of industrial cluster. I am continuing the work on California's emerging clusters with selected industry studies - the first on the California electric utility industry. My book, Agile Energy Systems: Global Lessons from the California Energy Crisis has been published (Elsevier Publishers, Cambridge, 2004.) This is part of their well regarded energy policy series and it has already received considerable positive attention, including a large Publication event at the Milken Institue in Los Angeles with over 100 attendees. I described the main contents in the 2003 report. The second study is on the environmental technology industry, and I have collected and analyzed commercially available data on that industry, showing the growth and concentration in the state. I have not pursued the earlier data collection efforts because the data were not rich enough. However, I have started another project looking at the extent to which the environmental technology industry can lead to increased rural tourism in the town of Arcata. Arcata has some of the highest density of environmental technology industries especially given the size of its population, and I am working with city officials to study tourism and an eco-village concept. Finally, this year I have invested considerable energy since the publication of my book in exploring the linkage of energy efficiency, affordability, and smart growth in the residential housing industry. I spent a week at the ACEEE energy efficiency in buildings summer workshop at Asilomar this summer where I revitalized my connections with the energy efficiency researchers and organizations internationally who come to that conference. The energy efficiency cluster is one of the most important assets for California, and in conjunction with the California Rural Housing Coalition we are building linkages to the rural affordable housing industry.

Impacts
Based on the work on my book Agile Energy Systems, I have participated in a national task force on the Hydrogen economy led by Jerimy Rifkin with the objective of furthering the potential hydrogen use in fuel cells for transportation and other uses. The Enterprise Zone study led to a presentation to the Legislature and several consultations with high level legislative staff. I also participated in a legislative hearing on the Guaranteed Loan Program evaluation I completed several years ago and I was asked by the Secretary of the Business and Transportation Agency to conduct an updated study, which is now being negotiated. I organized and held a workshop on Affordable, Green and Smart Growth housing in early September with the top 75 leaders in these sectors in attendance. We generated policy initiatives to further this initiative. I continue to be a Board Member of the California Association of Local Economic Development's (CALED) Economic Development Academy.

Publications

  • Bradshaw, Ted & Clark, Woodrow 2004 Agile Energy Systems: Global Lessons from the California Energy Crisis, Elsevier Ltd Publishers (Global Energy Policy and Economics series) published October 2004 (With Woodrow Clark).


Progress 01/01/03 to 12/31/03

Outputs
This project has been going well this year, with several preliminary results. The first objective of the research project was to continue previous work on the definition and elaboration of the concept of industrial cluster. I am continuing the work on California's emerging clusters with two industry studies - the first on the California electric utility industry. I have completed the manuscript and it will be published in 2004 by Elsevier Press. A key part of it is the analysis of the changes caused by deregulation in the electrical utilities and the response by industrial clusters of the renewable and alternative industry sectors. The first half of the book deals with the events leading to deregulation and the blackouts of 2000-2001, followed by an analysis of the response to the crisis and options for future solutions. We examine the role of renewable sources of energy and the eventual contribution of hydrogen to the solution of the ongoing crisis. Five key ideas provide the framework for both sections of the book - 1) technologies, 2) regulatory framework, 3) economic models, 4) planning and dealing with complexity, and 5) economic development. The economic development implications of the power sector and the potential for an emerging cluster in the future are relevant to the AES project. The second study is on the environmental technology industry, and I have collected and analyzed commercially available data on that industry, showing the growth and concentration in the state. This analysis follows up on a paper on the environmental technology industry, 'Science First', which appeared in the Journal of Higher Education. This year I organized some of the data collected on faculty doing research on the environmental technology industry and Jerry Last and I are starting to outline a paper using these data. We are not sure if there is enough data for a paper or not, but we are working on it. The project also has included two studies on economic development initiatives. First, I studied the role of university technology transfer and economic development. The importance of elite universities in technology transfer is well known; in the paper published we look at non-elite universities, which have less technology transfer per institution than elite universities, but in aggregate have about half the nation's research, patents, and spin-off firms. We show how these universities can increase their economic development impact. Second, I completed a study of the economic development impact of Enterprise Zones in California. The state has 39 Enterprise Zones, and we traced the growth in employment and earnings within these zones for the last ten years. The analysis showed that the tax incentives offered in the zones led to more rapid growth in employment and businesses, and that the new tax paid by firms in the zone greatly exceeded the costs of the program, even after taking into account growth that would have 'occurred anyway.' The data on small business survival rates has not progressed, as the graduate student who worked on this part of the project has not completed her work. I am not going to do that part of the project.

Impacts
The report I completed on Enterprise Zones has led to my being invited to keynote the California Enterprise Zone Association annual conference in October and to state policy continuing to support the zone program. The early work on the Energy book has been in conjunction with the Governor's Office of Planning and Research and has supported initiatives that are ongoing even after the recall. I continue to be a Board Member of the California Association of Local Economic Development's (CALED) Economic Development Academy.

Publications

  • Bradshaw, Ted. 2004. Agile Energy Systems for Complex Societies: Solving The California Energy Crisis, Elsevier Ltd Publishers (Global Energy Policy and Economics series) 2004 (With Woodrow Clark) (First draft accepted by publisher; Final draft to be mailed 1-9-04).
  • Bradshaw, Ted. 2004. "Economic Development Via University-based Technology Transfer: Strategies for Non-elite Universities." Journal of Technology Transfer (With Tapan Munroe and Mark Westwind, and assistance of Vlad Stasuc) (Accepted for publication 2004).


Progress 01/01/02 to 12/31/02

Outputs
This project has been going well this year, with several preliminary results. The first objective of the research project was to continue previous work on the definition and elaboration of the concept of industrial cluster. I have continued the work I initially had started on this and have written part of a book chapter and given a conference presentation on it. I chaired and made a major panel presentation at two sessions of the National Association of State Workforce Agencies Workforce Intelligence Summit, 2002 in Sacramento. This was hosted by the California Employment Development Department and about 150 people attended the two sessions. I am continuing the work on emerging clusters with two industry studies-the first on the California electric utility industry. This work is coming out as a book soon, and a key part of it is the analysis of industrial clusters of the renewable and alternative industry sectors. During the last year I have been collecting data and interviewing people about the future of the electrical power sector, and examining data on the causes and response to the California electricity crisis of 2000-2001. The work relevant to this project involves chapters on the economic development implications of the power sector and the potential for an emerging cluster in the future. The second study is on the environmental technology industry, and I have collected and analyzed commercially available data on that industry, showing the growth and concentration in the state. This analysis follows up on a paper on the environmental technology industry, "Science First", which appears in the Journal of Higher Education. The data on small business survival rates has not progressed, as the graduate student who worked on this part of the project has not completed her work.

Impacts
The notion of clusters has continued to be of concern in local and state policy arenas. The state EDD asked me to chair a conference session on clusters and cluster methodology attended by staff of the Labor Market Information Departments of California and similar state agencies around the nation. In addition, I have been helping the Governor's Office of Planning and Research prepare a white paper on emerging industries and the California economy.

Publications

  • Blakely, Edward J. and Ted K. Bradshaw (2002). Planning Local Economic Development, Chapter 5. Sage.


Progress 01/01/01 to 12/31/01

Outputs
This project has just begun and my first effort has been to look at the economic impacts of the energy crisis on industrial clusters in California. This will be included in a book on the California energy crisis, but it is not completed yet. I have also collected time data on changes in survival rates of small businesses in the state.

Impacts
There is no impact yet as this project is just beginning.

Publications

  • No publications reported this period