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InRoads Research: Regional Clusters

Cluster thought offers insight into regional economic induction. How does sheer proximity stimulate growth, business to business? With today’s regional markets facing competition at even a global level, location is all the more vital in gaining a competitive advantage. According to Harvard’s US Cluster Mapping Project, a regional cluster is “a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular industry [with] various linkages that span across industries.” That interconnectivity can increase productivity and encapsulate knowledge spill-over in ways not available at a distance.

Cluster analysis takes us beyond raw data into a visual picture of where we are, touching the very ground level decisions of businesses that make up the region. This is because, “Firms trade subject to transport costs and technology diffuses spatially,” according to Desmet and Rossi-Hansberg on Spatial Development out of Princeton’s 2014 American Economic Review. Clusters provide a landscape for understanding economic ties, giving an easier base to measure industry competitiveness. It is the difference in growing, for example, a cyber-security and unmanned systems footprint by developing more effective computer engineers and technicians and growing it by also examining the accountants, corporate managers, and even venture capitalists that are involved in building a technological firm’s infrastructure.

To ensure Hampton Roads remains a world-class business community, The Alliance focuses on several specific industry clusters:

  1. Advanced Manufacturing
  2. Aero Space, Aviation and Defense
  3. Bio-medical and Bio-Science
  4. Business & Financial Services
  5. Cross-Cutting Industries
  6. Distribution and Logistics
  7. Food Processing
  8. Information, Analytics, and Security

The Alliance’s Business Intelligence has prepared a video showing the footprint in Hampton Roads of these eight (8) traded clusters, industry groups who are primarily export-oriented. Using the Virginia Employment Commission’s most recent data from the second quarter 2016, Business Intelligence has mapped these companies to a respective cluster using their primary NAICS code. Each company is then plotted on a local area map using the company’s corresponding longitude and latitude. The size of each plot is fit to a custom scale by employment, the smallest representing those with 1 to 15 employees and the largest, 1000+ employees. In the video, we first build industry upon industry within each cluster, for the region as a whole, in simple alpha-numeric order to gradually produce a visualization of spatial development. We then do the same for each represented locality utilizing all eight clusters.

New to market recruitment, local expansion and entrepreneurship all play roles in the development of these regional clusters over time, whether by design or natural evolution. This video is a presentation of what has developed in Hampton Roads – what is here for us to expand upon. Our objective is to bolster our region’s strengths to encourage new and expanded business development. The rationale is, as Dr. Filer of ODU puts it, “The region does not possess a monopoly in any of these clusters, so we are competing against other regions for excellence.” 

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