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Mapping a nation of regional clusters

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      A cluster is a regional concentration of related industries that arise out of the various types of linkages or externalities that span across industries in a particular location. The U.S. Benchmark Cluster Definitions are designed to enable systemic comparison across regions. View and compare clusters across the U.S.

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      A region is broadly defined as a county, economic area (EA), metro/micropolitan statistical area (MSA), or state. The U.S. Benchmark Cluster Definitions use the U.S. Bureau of Economic Analysis defined economic areas. View and compare regions across the U.S.

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      The Community of Practice enables practitioners to share Resources, post Blogs, and find partner Organizations. View and contribute content of interest to the cluster based economic development community.

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Clusters and Entrepreneurship

by Mercedes Delgado, Michael E. Porter, and Scott Stern, U.S. Census Bureau Center for Economic Studies November 15, 2013

This paper examines the role of regional clusters in regional entrepreneurship, focusing on the distinct influences of convergence and agglomeration on growth in number of start-ups, as well as employment in such new firms in a given region-industry. While reversion to the mean and diminishing returns to entrepreneurship at the region-industry level can result in a convergence effect, the presence of complementary economic activity creates externalities that enhance incentives and reduce barriers for new business creation. Clusters are a particularly important way through which location-based complementarities become realized. The empirical analysis uses a novel panel dataset from the Longitudinal Business Database of the U.S. Census Bureau and the U.S. Cluster Mapping Project, which shows significant evidence of the positive impact of clusters on entrepreneurship. After controlling for convergence in start-up activity at the region-industry level, industries located in regions with strong clusters (i.e. a large presence of other related industries) experience higher growth in new business formation and start-up employment. Strong clusters are also associated with the formation of new establishments of existing firms, thus influencing the location decision of multi-establishment firms. Finally, strong clusters contribute to start-up firm survival.

Image: Nick Lowndes

PDF icon Clusters_and_Entrepreneurship.pdf
Entrepreneurship and Innovation
Academic Research
Source: 
U.S. Cluster Mapping
Organization: 
Harvard Business School, Institute for Strategy and Competitiveness
Author: 
Mercedes Delgado, Michael E. Porter, and Scott Stern
Publication/Specific Source: 
U.S. Census Bureau Center for Economic Studies
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The U.S. Cluster Mapping Project is led by Professor Michael E. Porter at the Institute for Strategy and Competitiveness, Harvard Business School.

This project is funded by the U.S. Department of Commerce, Economic Development Administration.