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Focusing on Regional Competitive Advantage. Module Three. Producing a High Quality Plan: The Essential Components. Evidence-Based. Practical. Team’s Regional Plan . Aligned with Vision & Goals. Broadly Supported. Focused on Regional Economic Development . Overview of Module Three.
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Focusing on Regional Competitive Advantage Module Three
Producing a High Quality Plan: The Essential Components • Evidence-Based • Practical Team’s Regional Plan Aligned with Vision & Goals • Broadly Supported • Focused on Regional Economic Development
Overview of Module Three • Investigate the region’s economic advantage • Explore regional data to identify regional industrial clusters • Deliverable: Select industry clusters for further exploration • HQP: Draft a rationale for industries selected
Competitive Advantage Business shapes the economic value of a region, but places can help shape, nourish, and sustain local enterprises and industry.
Exploring Competitive Advantage Based on Porter’s Diamond Theory – Porter, M. (1990)
Demand Conditions What conditions influence demand for goods or services produced in the region?
Factor Conditions • Infrastructure • Resources & Materials • Skilled Workforce
Firm Strategy, Rivalry, Composition • Region’s portfolio of businesses • Entrepreneurship activity and support • Mix of industries
Business and Industry INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE HERE
Related and Supporting Industry Do industries buy and sell from each other regionally? Do any strong value chains exist in the region?
Value Chain Example Wine Winemaking Equipment Grape Stock State Government Agencies Fertilizers, Pesticides, Herbicides Barrels Bottles Growers/ Vineyards Wineries/ Processing Facilities Caps & Corks Grape Harvesting Equipment Labels Public Relations & Advertising Irrigation Technology Educational, Research & Trade Organizations Specialized Publications California Agricultural Cluster Food Cluster Tourism Cluster Source: California Department of Food and Agriculture
Industry Clusters Defined Similar and related firms in a defined geographic area that share: • Common markets • Technologies • Worker skill needs • Buyer-seller relationships
Two Types of Clusters Auto Industry • Value chains (Vertical clusters): working together toward a common product • Competing (horizontal clusters): drawing from the same raw materials, infrastructure, labor force Software Industry
Understanding Changes Moving Up or Down Growing Change in Percentage of Jobs in Industry over Time Declining
Understanding Changes Moving Left or Right Relative Concentration of Industry in the Region Compared to the Nation Less More
Understanding Changes PercentChange in Jobs over Time Location Quotient: Measure of Concentration of Industry
Regional Clusters: 2002-2007 INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE HERE
Regional Clusters: 2006-2011 INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE HERE
Behind the Bubble Chart INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE – Move line to divide 1+ LQ Location Quotient more than 1 = Concentration
Behind the Bubble Chart INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE – Adjust red circles to top 5 Industries with Greatest Percentage Growth
Examining the Leaky Bucket The Regional Economy Goods or Services Purchased outside the Region $
Looking at Regional Expenditures INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE
Regional Industrial Clusters: Digging Deeper • Identify the industries within the cluster • Determine if growing or declining • Evaluate regional capacity • Identify potential leakages & opportunities • Determine potential strengthening strategies
Cluster Choices • Advanced Materials • Agribusiness, Food Processing & Technology • Apparel & Textiles • Arts, Entertainment, Recreation & Visitor Industries • Biomedical/Biotechnical (Life Sciences) • Business & Financial Services • Chemicals & Chemical Based Products • Computer & Electronic Product Manufacturing • Defense & Security • Education & Knowledge Creation • Electrical Equipment, Appliance & Component Manufacturing • Energy (Fossil & Renewable) • Fabricated Metal Product Manufacturing • Forest & Wood Products • Glass & Ceramics • Information Technology & Telecommunications • Machinery Manufacturing • Mining • Primary Metal Manufacturing • Printing & Publishing • Transportation & Logistics • Transportation Equipment Manufacturing
Examining Clusters in the Region What industries: • Seem worth exploring further? • Should the region avoid investing for the future? • May be viable future regional industries? • Are declining but may be worth reviving?
Looking Ahead to Module Four • Identify the economic leaks in the region • Explore basic avenues for strengthening clusters • Consider specific strategies within each avenue • Select potential directions for the region to explore
Preparing for Module Four • Draft summary of why industries selected (HQP – evidence based) • Read the “C.A.R.E. for the Region” flow chart
Final Reflections • What topics did you find most helpful? • What did you find confusing? • What other data do you need? • Other items you want to mention?