By John Spears, U.S. Small Business Administration, presented at the 17th TCI Global Conference, Monterrey 2014.

1. SBA’s Regional Innovation Clusters Program
John Spears
Clusters in North America
13 November 2014

2. SBA’s Regional Innovation Clusters
Program
John Spears
Director of Clusters and Skills Initiatives
John.Spears@sba.gov

3. Agenda
• Cluster Initiative Mission
• SBA’s Work to Date
• Current Results
• Looking Ahead

4. Mission of SBA’s Clusters Program
The ability of small businesses to drive innovation is
critical to U.S. competitiveness.
The Small Business Administration Clusters Program
connects and enhances innovation hubs so that
small businesses can effectively leverage them to
commercialize new technologies and expand into
new markets, thereby positioning themselves and
their regional economies for growth.
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 4

5. Defining Clustering and Cluster Initiatives
Cluster initiatives build off organic clusters by
purposely integrating small, medium and large
companies and universities for business, funding and
research opportunities that create jobs, attract capital
and have long-term, positive economic impact. Its Core
functions:
Industry/Sector
Gov’t Agencies
Serves as a navigator/concierge to
assistance and rely on outside service
Community
Leadership
connect stakeholders
Maintain governance structure
Provide some in-house technical
providers
Entrepreneurs Lenders
Small
Businesses
Investors
Venture
Capital
Colleges
Trade
Cluster
Initiative
Associations
Large
Contractors
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 5

6. RICs Play an Important Role in Achieving President Obama’s Jobs Strategy
Regional Innovation Clusters:
a core component of this Jobs
Strategy
Launch new ventures and grow existing
businesses
Increase the depth and breadth of
technical assistance to small businesses
Spur innovation and commercialization of
new technologies
Enhance economic development and
growth at the regional level
The Administration’s Priorities
are focused on the following policy
elements:
Spurring innovation: making it easier and
faster to turn new ideas into new jobs and
new businesses
Making the U.S. a magnet for long-term job
creation and strengthening the middle class
Investing in place-based economic
development
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 6

7. Three Main Functions of SBA Clusters Program
1. Directly support regional cluster initiatives: At a community level, SBA-funded
cluster initiatives measurably connect sector-specific public and
private resources to provide small businesses with specialized
assistance, mentoring, showcasing, and access to capital.
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 7

8. Three Main Functions of SBA Clusters Program
1. Directly support regional cluster initiatives: At a community level, SBA-funded
cluster initiatives measurably connect sector-specific public and
private resources to provide small businesses with specialized
assistance, mentoring, showcasing, and access to capital.
2. Convene thought leaders, policy makers, and practitioners: In order to
foster healthy innovation ecosystems for small businesses in advanced
industries, the program convenes cluster leaders, shares best practices,
and encourages collaboration between public and private partners at
local, state and national levels.
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 8

9. Three Main Functions of SBA Clusters Program
1. Directly support regional cluster initiatives: At a community level, SBA-funded
cluster initiatives measurably connect sector-specific public and
private resources to provide small businesses with specialized
assistance, mentoring, showcasing, and access to capital.
2. Convene thought leaders, policy makers, and practitioners: In order to
foster healthy innovation ecosystems for small businesses in advanced
industries, the program convenes cluster leaders, shares best practices,
and encourages collaboration between public and private partners at
local, state and national levels.
3. Evaluate performance: Fact based and data driven analysis drives
investment.
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 9

10. Nationwide: 56 Federally Funded Cluster Initiatives
53
22
13
24
12
14
25 A
43
29
44
B
8
7
5
19
1
6
38
39
20
9
4
52
51
50
2
16
26
27
15
10
49
3
36
30
31
46
32
42
28
33
34
37
35
21
40
11
23
47
18 17
41
48
45
C
Initial Clusters (3), $134M
• SBA, EDA, NIST, DOE, NASA, DOL, EPA
SBA’s Pilot Contract Based Clusters (10), $14.7M
• SBA
Jobs Accelerator Collaboration Clusters (20), $37M
• EDA, ETA, SBA
Advanced Manufacturing Jobs Accelerator Collaboration Clusters (10), $20M
• EDA, ETA, NIST, DOE, SBA
Rural Jobs Accelerator Collaboration Clusters (13), $9M
• EDA, USDA, DRA, ARC
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 10

11. SBA’s Initial Regional Innovation Clusters
Advanced Power & Energy Cluster
(Upper Midwest)
Cluster Administrator:
Minnesota Wire
Industry focus:
Power and energy generation,
storage, distribution,
conservation, and supporting
technologies
53
FlexMatters – Northeast Ohio
Technology Coalition (OH)
Cluster Administrator:
NorTech
Industry focus:
flexible electronic products
22
13
24
11
12
14
6
25 A
43
Northeast Electrochemical
Energy Storage Cluster
(New England, NY and NJ)
Cluster Administrator:
Connecticut Center for
Advanced Technology, Inc.
Industry focus:
hydrogen and fuel-cell supply
chain
Huntsville Advanced Defense
Technology Cluster (HADTC)
(10 counties in Northern AL)
29
2
44
B
36
30
31
46
32
52
51
50
42
28
16
26
27
33
8
34
37
38
39
35
21
40
49
23
20
19
47
The Smart Grid Cluster
(IL and Midwest)
Cluster Administrator:
Illinois Institute of Technology
Industry focus:
smart electrical grid equipment
and technologies
18 17
7
5
15
41
48
45
C
1
9
4
10
3
San Diego Advanced
Defense Cluster
(San Diego, CA)
Cluster Administrator:
San Diego State University
Research Center
Industry Focus:
Autonomous systems,
cybersecurity, and C4ISR
Enterprise for Innovative
Geospatial Solutions Cluster
(MS, LA)
Cluster Administrator:
Magnolia Business Alliance
Industry Focus: geospatial
technologies
Cluster Administrator:
HADTC
Industry Focus:
Small spacecraft, environmental
monitoring, C4ISR, robotics, and
cybersecurity
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12. Results from Three Years of Evaluations
of SBA’s Regional Innovation Clusters
Cluster Activity Impacts Small Businesses
75% satisfaction from reporting small
businesses.
Nearly $4 billion in new economic activity (e.g., contracts,
grants, loans) was generated by small businesses affiliated
with the clusters
One-on-One Counseling More than 13,000 hours of
one-on-one assistance delivered to more than 460
small businesses
87% of small businesses reported that the
cluster services were unique and could not
be found elsewhere.
60% of participants agree that cluster
participation resulted in the development of
new products and services.
4.4x The number of times faster that cluster
payrolls grew relative to their local region.
new businesses started after
founders’ first participation
in their cluster 27
Of all small businesses
active in Year 1, 96%
remained active in Year 2.
Total small business
participation
increased 5X.
Number of Small Businesses
141
682
785
Year 1 Year 2 Year 3
76 new patents acquired
by participating small
businesses
84%
54%
42%
32%
28%
10%
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 12
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Business
Networking
Access to
cluster services
Government
Procurement
Opportunities
Supply Chain
Integration
Access to New
Markets
Other
Reasons Small Businesses Participate in Clusters
(Percent “Yes”)

13. Encouraging Momentum
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 13

14. JPMorgan Chase’s Small Business Forward
• Small Business Forward is JPMorgan Chase’s
five year, $30 million initiative to support
small businesses by connecting them to
critical resources that help them grow faster,
create jobs, and strengthen local economies.
• Small Business Forward supports program
models including access to investor networks,
cohort-based training, export promotion and
customer acquisition, facilities expansion.
• The initiative is seeking additional grantees in
key markets where the firm does business.
• Contact: David.a.Goldberg@jpmchase.com
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 14

15. Current Challenges
• Sustainability of cluster initiatives
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16. Current Challenges
• Sustainability of cluster initiatives
• Engaging underserved/underrepresented communities
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 16

17. Current Challenges
• Sustainability of cluster initiatives
• Engaging underserved/underrepresented communities
• Common performance metrics
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 17

18. Current Challenges
• Sustainability of cluster initiatives
• Engaging underserved/underrepresented communities
• Common performance metrics
• Lack of effective, common messaging about what clusters are and how cluster
strategies can drive regional economic growth
Mission Clusters Defined Why SBA SBA’s Work Results Looking Ahead 18