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Generate Cluster-Based Economic Development

What is it? Localities invest significant time and resources in attempts to generate economic development.  Too often, these efforts are unfocused.  Cluster-based development entails identifying the existing or emerging enterprise groupings in a region.  The clusters may be vertical (different types of businesses all contributing to a common value chain) or horizontal (similar types of enterprises, such as technology oriented) in nature.  By identifying important groupings, development officials can better target their business creation, attraction, retention and expansion activities to support the growth of those clusters.

How has it been used? In Virginia, two multi-county regions applied and were competitively selected to participate in the USDA’s Strengthening Economies Together program.  The project was led by a state-wide multi-agency training team, consisting of Virginia Cooperative Extension faculty, Virginia Department of Housing and Community Development and Virginia Tourism Corporation staff, and USDA representatives.  Trainers led regional stakeholders through an intensive year-long process of examining clusters and developing plans to grow the region’s clusters. Participants reported an increased awareness of regional economic strengths and a number of specific, targeted initiatives were developed in each area. (Source:  Virginia Cooperative Extension, Community Viability)

Further Reading

Cluster-based Economic Development Strategies – ICMA International

A Practical Guide to Rural, Cluster-Based Economic Development Strategies – University of North Carolina Chapel Hill, Department of City and Regional Planning

U.S. Cluster Mapping

Clusters and Cluster Development – Institute for Strategy and Competitiveness