Munnich

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  • Munnich

    1. 1. Rural Knowledge Clusters: Strategic Planning & Practical Application State and Local Policy Program Lee Munnich Senior Fellow and Director State and Local Policy Program Humphrey Institute of Public Affairs University of Minnesota Phone: (612) 625-7357 E-mail: lmunnich @ hhh . umn . edu
    2. 2. Overview <ul><li>Defining rural knowledge clusters and keys to cluster success </li></ul><ul><li>Minnesota successes and other cluster examples in Southern states </li></ul><ul><li>Steps to developing a rural knowledge cluster initiative </li></ul>
    3. 3. Rural Knowledge Clusters <ul><li>Specialized networks of innovative, interrelated firms </li></ul><ul><li>Centered outside major metropolitan areas </li></ul><ul><li>Deriving competitive advantages primarily through accumulated, embedded, and imported knowledge among local actors </li></ul>
    4. 4. Keys to Cluster Success <ul><li>Understand your local knowledge base. </li></ul><ul><li>Foster linkages between firms and the local institutions that support them. </li></ul><ul><li>Develop strategies for promoting innovation around rural knowledge clusters. </li></ul><ul><li>Don’t try to go it alone – promote a regional vision to guide strategies. </li></ul>
    5. 5. Minnesota Success Stories illustrating <ul><li>Competitive advantage </li></ul><ul><li>History </li></ul><ul><li>Institutions </li></ul>
    6. 6. Case Example 1: Competitive advantage <ul><li>Factors that give local firms a market advantage: </li></ul><ul><li>Supply or demand in the marketplace </li></ul><ul><li>Related industries </li></ul><ul><li>Local rivalry </li></ul>
    7. 7. Northwest Minnesota: Key Facts <ul><li>Population (2000): 88,472* </li></ul><ul><li>Major Cities: </li></ul><ul><li>Crookston: 8,192 </li></ul><ul><li>East Grand Forks: 7,501 </li></ul><ul><li>Roseau: 2,756 </li></ul><ul><li>Thief River Falls: 8,410 </li></ul><ul><li>Population Density (pop/sq mi): 11 </li></ul><ul><li>(Twin Cities: 601; MN state: 62) </li></ul><ul><li>Population Growth (1990-2000): -2% </li></ul><ul><li>(MN non-metro: 4%; US non-metro: 9%) </li></ul><ul><li>Job Growth (1990-2000): 16% </li></ul><ul><li>(MN non-metro: 25%; US non-metro: 18%) </li></ul><ul><li>  </li></ul><ul><li>* Kittson, Marshall, Norman, Pennington, Polk, Red Lake, Roseau counties (Region 1) </li></ul><ul><li>Source: Census Bureau ; Bureau of Economic Analysis </li></ul>
    8. 8. Northwest Minnesota: Recreational Transportation Equipment <ul><li>Key Industries </li></ul><ul><li>Other transportation equipment manufacturing (NAICS: 3369/SIC: 3799) </li></ul><ul><ul><li>2000 Employment: 2,197, 20.5 times more concentrated than U.S. overall </li></ul></ul><ul><li>Source: County Business Patterns </li></ul>
    9. 9. Competitive Advantage: Recreational Transportation Equipment <ul><li>Key Employers </li></ul><ul><li>Arctic Cat (Thief River Falls) 1,500 employees </li></ul><ul><li>Machinewell (Grygla) 110 employees </li></ul><ul><li>Polaris Industries (Roseau) 2,100 employees </li></ul><ul><li>TEAM Industries (Bagley) 250 employees </li></ul><ul><li>Source: MN Dept of Trade and Economic Development </li></ul>
    10. 10. Case Example Two: History <ul><li>An historical base of knowledge about an industry or technology that is used to create new products or services </li></ul>
    11. 11. Alexandria: Key Facts <ul><li>Population (2000): 210,059* </li></ul><ul><li>Major Cities: </li></ul><ul><li>Alexandria: 8,820 </li></ul><ul><li>Fergus Falls: 13,471 </li></ul><ul><li>Moorhead: 32,177 </li></ul><ul><li>Population Density (pop/sq mi): 26 </li></ul><ul><li>(Twin Cities: 601; MN state: 62) </li></ul><ul><li>Population Growth (1990-2000): 6% </li></ul><ul><li>(MN non-metro: 4%; US non-metro: 9%) </li></ul><ul><li>Job Growth (1990-2000): 25% </li></ul><ul><li>(MN non-metro: 25%; US non-metro: 18%) </li></ul><ul><li>*Becker, Clay, Douglas, Grant, Otter Tail, Pope, Stevens, Traverse, and Wilkin counties (Region 4). </li></ul><ul><li>Source: Census Bureau; Bureau of Economic Analysis </li></ul>
    12. 12. Alexandria: Automation and Motion Control Technologies <ul><li>Key Industries </li></ul><ul><li>Packaging Machinery (NAICS: 3339/SIC: 3565) </li></ul><ul><ul><li>2000 Employment: 1,209, 4.5 times more concentrated than U.S. overall </li></ul></ul><ul><li>Machine Shops and Related (NAICS: 3327/SIC: 3599, 3451, 3452) </li></ul><ul><ul><li>  2000 Employment: 844, 2.1 times more concentrated than U.S. overall </li></ul></ul><ul><li>  </li></ul><ul><li>Source: County Business Patterns </li></ul>
    13. 13. Alexandria: Automation and Motion Control Technologies <ul><li>Key Employers </li></ul><ul><li>3M (Alexandria) 317 employees </li></ul><ul><li>Alexandria Extrusion (Alexandria) 274 employees </li></ul><ul><li>Brenton Engineering (Alexandria) 127 employees </li></ul><ul><li>Douglas Machine (Alexandria) 492 employees </li></ul><ul><li>Minnesota Automation (Crosby) 120 employees </li></ul><ul><li>Massman Automation (Villard) 100 employees </li></ul><ul><li>Schott Automation (Garfield) 35 employees </li></ul><ul><li>Thiele Engineering (Fergus Falls) 81 employees </li></ul><ul><li>  Source: MN Dept of Trade and Econ Development </li></ul>
    14. 14. Case Example Three: Institutions <ul><li>formal and informal; foster the creation, diffusion, and renewal of the local knowledge base </li></ul>
    15. 15. Winona: Key Facts <ul><li>Population (2000): 112,517* </li></ul><ul><li>Major Cities: </li></ul><ul><li>Winona: 27,069 </li></ul><ul><li>Lake City: 5,054 </li></ul><ul><li>Population Density (pop/sq mi): 44 </li></ul><ul><li>(Twin Cities: 601; MN state: 62) </li></ul><ul><li>Population Growth (1990-2000): 5% </li></ul><ul><li>(MN non-metro: 4%; US non-metro: 9%) </li></ul><ul><li>Job Growth (1990-2000): 21% </li></ul><ul><li>(MN non-metro: 25%; US non-metro: 17%) </li></ul><ul><li>*Blue Earth, Nicollet and Waseca counties </li></ul><ul><li>Source: Census Bureau; Bureau of Economic Analysis </li></ul>Winona
    16. 16. Winona: Advanced Composite Materials <ul><li>Key Industries </li></ul><ul><li>Custom compounding of purchased resin (NAICS: 325991/SIC: 3087) </li></ul><ul><ul><li>  2000 Employment: 517, 5.37 times more concentrated than U.S. overall </li></ul></ul><ul><li>All other plastics products manufacturing (NAICS: 326199/SIC: 3089) </li></ul><ul><ul><li>  2000 Employment: 241, 3 times more concentrated than U.S. overall </li></ul></ul><ul><li>  </li></ul><ul><li>Source: County Business Patterns </li></ul>Winona
    17. 17. Winona: Advanced Composite Materials <ul><li>Key Employers </li></ul><ul><li>RTP Company (Winona) 407 employees </li></ul><ul><li>Cytec Engineering (Winona) 175 employees </li></ul><ul><li>Ticona Celstran (Goodview) 69 employees </li></ul><ul><li>We-no-nah Canoe (Winona) 75 employees </li></ul><ul><li>Watlow Polymer Technologies (Winona) 24 employees </li></ul><ul><li>AFC Strongwell (Chatfield) 200 employees </li></ul><ul><li>Composite Products Inc. (Winona) 50 employees </li></ul><ul><li>CodaBow Composites (Winona) 15 employees </li></ul><ul><li>Miken Composites (Caledonia) 15 employees </li></ul><ul><li>Geotek (Stewartville) 35 employees </li></ul><ul><li>  Source: MN Dept of Trade and Economic Development </li></ul>Winona
    18. 18. Winona: Rural Knowledge Cluster Profile Advanced Composite Materials Mfg <ul><li>Competitive Advantages </li></ul><ul><li>Diverse local industry base </li></ul><ul><li>Skilled worker base around </li></ul><ul><li>composite engineering </li></ul><ul><li>Cooperative relationships </li></ul><ul><li>History </li></ul><ul><li>Miller Brothers – formed </li></ul><ul><li>Fiberite after WWII </li></ul><ul><li>Initial growth in aerospace, </li></ul><ul><li>military applications </li></ul><ul><li>Spin-off/startup activity </li></ul><ul><li>to new firms </li></ul><ul><li>Institutions </li></ul><ul><li>SAMPE – professional society </li></ul><ul><li>Winona St – composite eng </li></ul><ul><li>COMTEC – applied R&D/testing </li></ul><ul><li>Winona Composites Consortium </li></ul><ul><li>Technical college: custom training, </li></ul><ul><li>technical education </li></ul><ul><li>Firms and Industries </li></ul><ul><li>Composite materials producers </li></ul><ul><li>Existing products improved through use of composite materials (i.e. canoes, heated plastics, automotive products, violin bows) </li></ul>
    19. 19. A Cluster in Turmoil: Precision Agricultural Equipment in Southwestern Minnesota <ul><li>Agricultural sprayer technology </li></ul><ul><li>Highlights potential pitfalls of having a cluster of companies doing essentially the same thing, rather than diverse activities around the same technology </li></ul><ul><li>Vulnerability that comes from non-local ownership </li></ul><ul><li>Suffered from corporate consolidations, layoffs, and plant closings </li></ul><ul><li>Minimal start-up activity </li></ul>
    20. 20. Current and Emerging Industry Clusters <ul><li>Overview of past research </li></ul><ul><li>Data on potential emerging clusters </li></ul>
    21. 21. State and Local Policy Program Regional Cluster Studies Twin Cities Southeast Minnesota Southwest Minnesota Northwest Minnesota Northeast Minnesota Printing and Publishing   Computers and Software   Medical Devices   Machinery and Metalworking   Financial Services Composites   Food Processing   Printing, Publishing, and Software   Industrial Machinery and Computer Manufacturing   Computer and Electrical Components Manufacturing   Value-Added Agricultural Cooperatives   Agricultural Equipment Manufacturing   Dairy Processing Recreation and Transportation Equipment Manufacturing   Value-Added Agricultural Processing   Wood Products   Tourism Forest Products   Information Technology   Health Services   Tourism
    22. 22. RTS Snapshots of Rural Innovation: Rural Cluster Vignettes <ul><li>Auto Industry Supply Chain </li></ul><ul><li>Automotive </li></ul><ul><li>Carpet Manufacturing </li></ul><ul><li>Crafts </li></ul><ul><li>Furniture (Household) </li></ul><ul><li>Gaming </li></ul><ul><li>Hosiery </li></ul><ul><li>Hosiery </li></ul><ul><li>Houseboat Manufacturing </li></ul><ul><li>Oil and Gas </li></ul><ul><li>Pottery </li></ul><ul><li>Central Tennessee </li></ul><ul><li>Northwestern South Carolina </li></ul><ul><li>Dalton, Georgia </li></ul><ul><li>Western North Carolina </li></ul><ul><li>Northeastern, Mississippi </li></ul><ul><li>Tunica County, Mississippi </li></ul><ul><li>Catawba Valley, North Carolina </li></ul><ul><li>Fort Payne, Alabama </li></ul><ul><li>Somerset, Kentucky </li></ul><ul><li>Southern Louisiana </li></ul><ul><li>Seagrove, North Carolina </li></ul>Source: Stu Rosenfeld, RTS http://www.rtsinc.org/rc/rc_home.html
    23. 23. Identifying Clusters: Location Quotient <ul><li>Measures employment concentration in a particular industry in a particular region </li></ul><ul><li>Measure of specialization </li></ul><ul><li>LQ is calculated as a ratio of the industry’s share of employment in the region to the industry’s share of employment in the nation </li></ul><ul><ul><li>LQ > 1 means that concentration of employment in the industry in the region is higher than concentration of employment in same industry in the nation; i.e. the region specializes in that industry </li></ul></ul>
    24. 24. Developing a Cluster Initiative: 6 Key Steps <ul><li>Identify Cluster Candidates </li></ul><ul><li>Select Key Industries </li></ul><ul><li>Perform Stakeholder Analysis </li></ul><ul><li>Hold Industry Stakeholder Roundtable </li></ul><ul><li>Perform One-on-One Interviews </li></ul><ul><li>Develop Action Plan </li></ul>
    25. 25. Knowledge Cluster Strategies <ul><li>Research and Innovation </li></ul><ul><li>Cluster Branding and Awareness </li></ul><ul><li>Strategic Partnerships </li></ul><ul><li>Global Marketplace </li></ul><ul><li>Knowledge Cluster Expansion </li></ul>
    26. 26. Cluster Initiative Sustainability <ul><li>Project Team should be assembled prior to the cluster initiative development process </li></ul><ul><li>Concurrent to the development of the cluster initiative, Project Team requires training in: </li></ul><ul><ul><li>overall cluster approach and criteria for cluster identification </li></ul></ul><ul><ul><li>q ualitative assessment process </li></ul></ul><ul><ul><li>design and coordination of cluster roundtables and interviews </li></ul></ul><ul><li>  </li></ul><ul><li>  </li></ul><ul><li>  </li></ul>
    27. 27. Conclusions <ul><li>The cluster study approach: </li></ul><ul><ul><li>ensures that pertinent issues are brought to the forefront, </li></ul></ul><ul><ul><li>gives a voice to the region’s businesses, leading to future economic development </li></ul></ul><ul><li>And thus… </li></ul><ul><ul><li>secures the industries’ future </li></ul></ul><ul><ul><li>secures jobs for the region’s residents </li></ul></ul><ul><ul><li>motivates and engages industry leaders and policy makers. </li></ul></ul>
    28. 28. For further information: <ul><li>Go to </li></ul><ul><li>http://www.ruralvitality.org </li></ul><ul><li>http://www.hhh.umn.edu/centers/slp/ </li></ul>

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