Economic development always has been a moving target. Not surprisingly, there is growing evidence that the shape of economic policy and practice is changing significantly in many American states at the dawn of the 21st century. This new approach has public officials addressing new issues, using new tools, and beginning to experience new types of results. It is called cluster-based economic analysis and strategy development. This article reviews key literature and events that point to a new phase emerging in state economic development. Then, using Arizona as a case study, it presents practical evidence of the benefits from this new approach. For example, Arizona uses clusters as a tool for better understanding the economy, getting key industry stakeholders together to address common problems, and providing high-value specialized services to key industries.
Image: Ian Whadcock