Max Ufberg, Pacific Standard -- Seemingly every American city, from Boston to New Orleans, wants to be “the next Silicon Valley.” This isn’t anything new; it has happened before with industries like film, video games, and alternative energy. Basically, if an industry looks profitable, city (and state) officials will often try to work tirelessly to bring their own municipalities a piece of the financial pie. But while tech is certainly the buzziest industry in the United States now, a recent study suggests that cities need not focus on becoming the “next Silicon Valley.” They simply need to try to become the next something.
Professor Scott Stern, who teaches entrepreneurship at MIT, led a study proving that business clusters—geographically and fundamentally adjacent industries—can help boost a city’s overall economy. Yes, that’s long been a popular belief; now, there’s empirical evidence to back it up. More than that, Stern’s work—which appears in the December issue of Research Policy—shows that a business cluster of almost any variety is good for a city’s economy.
Stern and his researchers focused on the role of business clusters in fueling employment and innovation growth, specifically in the individual industries that form the regional cluster. (An economic cluster, according to this study, has around 15 types of individual industries. Think of car manufacturing in Detroit: There’s not just the automaker, but also the engineering firms and parts manufacturers, maybe even the metal manufacturers.) Using the U.S. Cluster Mapping Project, the team collected 15 years’ worth of data from 41 larger clusters—that’s 589 specific industries—across 177 U.S. regions.