Exploring Strategies for Enhancing the Regional Economy Module Six

Reflecting on the Previous Session

• What did you find most useful or valuable?

• What progress have you made since then?

• Any questions or clarification needed?

Overview of Module Six

• Identify the economic leaks in the region • Explore basic avenues for strengthening clusters • Provide an overview of some specific strategies within each avenue • Select some potential directions for the region to explore

The Leaky Bucket

The Regional Economy Goods or Services Purchased outside of the Region

Plugging the Leaks

Regional Supplier

Regional Demand

Outside Supplier

Strengthening Clusters through Import Substitution

Identify: • Industries that support the cluster • Goods and services being purchased from outside the region • Capacity for supplying these inputs regionally • Resources needed to help promote the creation, expansion, retention or attraction of businesses to supply inputs

Identify Potential Leakages and Opportunities for New Businesses Grapes Advertising Wine Zero inputs available regionally Small % of inputs available regionally Large % of inputs available regionally 100% of inputs available regionally Research

Looking at Regional Leakages in [Fill in Your Region’s Industry]

Substitute your region’s chart for Temporary Help Services this example.

Engineering Services All Other Professional, Scientific, and… Residential Property Managers Real Estate Credit Administrative Management and General… Wired Telecommunications Carriers Corporate, Subsidiary, and Regional… Offices of Real Estate Agents and Brokers Lessors of Nonresidential Buildings (except… Offices of Lawyers Lessors of Residential Buildings and… Investment Banking and Securities Dealing Investment Advice Portfolio Management Securities Brokerage Commercial Banking Insurance Agencies and Brokerages $0 $50 $100

Millions

$150 In Region Out of Region $200

Examining Your Region’s Cluster

Identify where: • Leakages are occurring • The regional may already have capacity to respond • Potential growth opportunities exist

C.A.R.E for the Cluster

Attraction Retention Creation Expansion Cluster Strengthening Source: Barta, et al (2010) CARE Model

Creation

Growing new enterprises locally to fill the gaps of goods and services purchased from outside the region

Creation: Sample Strategies

• Regional training • Business coaching • Entrepreneur networking • Business incubators

Creation: Providing Regional Support Access to Capital Intellectual Stimulation Education Community Support New Business & Entrepreneur Development Information Connections & Networks Infrastructure Services & Amenities

Source: Based on Reynolds, et. al., Small Business Economics 23: 263–284, 2004.

Creation: Our Region

• What has the region done to support or encourage new business or entrepreneur development in the past?

• What are some potential strategies to consider for the future?

Attraction

Attraction seeks to reduce leakages by recruiting into the region firms that can supply missing goods or services that support the cluster.

Attraction: Targeting Effectively

• Past: Blindly attracting industry • Now: Targeting

cluster related

businesses that are likely to be successful in the region

Attraction: Location Models

• Analyzes the probability of an industry moving to the region • Evaluates the region’s ability to respond to industry needs • Selects industries with the highest likelihood of success

Attraction: Community Business Matching Model Community Assets Goals The Ideal Compatibility Desirability Needs Business

Source:

Cox et al., 2009

Profile

Attraction: Our Region

• Past successes • Past challenges • Potential attraction strategies related to regional clusters

Retention & Expansion

Supporting existing businesses within a cluster so that they can survive and thrive is another avenue for stopping or preventing cluster leakages.

Retention & Expansion Strategies

• Business Retention and Expansion Study • Business Network Development

Retention & Expansion Study

• Lets businesses know they are valued • Helps solve regional business issues • Connects businesses to regional resources • Creates connections among regional organizations • Fosters job retention & growth

Cluster Retention & Expansion Study

• Planning Phase • Action Phase  Recruit volunteer visitors  Visit local businesses • Follow-up   Respond to concerns Plan for future

Business Network Development

A formal or informal collaboration among firms that are part of a

cluster

for the purpose of creating a

net benefit

for all involved

Retention & Expansion: Our Region

• What has the region done to support: – Retention of cluster-related firms?

– Expansion of cluster-related firms?

• What are some potential future strategies to support cluster retention and expansion?

Connecting Competitive Advantage to C.A.R.E.

Competitive Advantage C.A.R.E. Strategies

Creation Demand Conditions Firm Strategy, Structure, Rivalry Factor Conditions Related & Supporting Industries Attraction Retention Expansion

What’s Next?

• Consider other potential strategies that could be successful in the region • Further examine the regional data

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?

Looking Ahead: Module Seven

We will:   Examine regional assets Explore the region’s seven capitals  Take an honest look at potential barriers  Take steps to link assets to your potential regional goals