By Christopher Mack and Saad Usmani, presented at the 19th TCI Global Conference, Eindhoven, 2016.

1. Titel presentatie
[Naam, organisatienaam]
Working Day - Track: Modern cluster policy
Clusters strengthening macro-regional collaboration
Saad Usmani, Chris Mack
A Cluster Analysis of the
Great Lakes Region in North America

2. A Cluster Analysis of the
Great Lakes Region in North America
TCI Conference 2016, Eindhoven
November 10, 2016
Mark Fisher, President & CEO
Presented by:
Saad Usmani, Policy Analyst
Chris Mack, Policy Analyst

3. Great Lakes–St. Lawrence Region
Highlights

4. Prosperity in the Region
GLR Weighted
Productivity:
$55,724
Growth: 1.56%
Canada & US
Weighted
Productivity:
$55,482
Growth: 1.28%
 Mixed performance
 Large heterogeneity across
individual jurisdictions
 Policy making at the
State/Province level matters!

5. Economic interaction within the region
0%
5%
10%
15%
20%
25%
30%
35%
40%
% of total exports to Ontario and Québec
 Heavy concentration of trade and
value chain linkages between
jurisdictions
 Cross-border effects of economic
shocks, barriers to trade,
infrastructure, environmental
issues, etc. are prominent
 When one region does well, the
other regions benefit

6. Understanding the region through a
traded Clusters lens
Focus on traded clusters

7. Clusters performance
Relative
specialization
Change in market share,
2000 - 2013
Absolute employment in 2013
Net gain in job creation
Net loss in job creation
Source: Clusters and Regional Economies: Implications for the Great Lakes-St. Lawrence Region (Christian Ketels)

8. Clusters profile
Prominent across the region Prominent in larger metropolitan areas
Source: Clusters and Regional Economies: Implications for the Great Lakes-St. Lawrence Region (Christian Ketels)

9. Manufacturing in focus
 Decline in cluster performance particularly pronounced for
clusters involved in manufacturing activities
40
50
60
70
80
90
100
110
120
130
140
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Gross Value Added in Manufacturing
US and Canada
Great Lakes

10. Macro-Regional Economic Collaboration
? ?
Success on two fronts

11. Macro-Regional Economic Collaboration

12. Water as a unifying factor
 Stewardship and clean-up of the Great Lakes and St. Lawrence River is a
longstanding and crucial unifying factor
 International Joint Commission; Great Lakes Fishery Commission; Great Lakes Water
Quality Agreement
 Policymakers have typically not viewed the region as a shared economic zone
 Notable exceptions: Great Lakes-St. Lawrence Deep Waterway Treaty of 1932; Auto Pact
of 1965
 The Conference of Great Lakes and St. Lawrence Governors and Premiers
(formerly: Council of Great Lakes Governors) in its early years focused on
coordinating regional water policy
 Branched off into:
 Opening trade offices
 Great Lakes-St. Lawrence Maritime Strategy (2015)
 Cluster analysis

13. Macro-Regional Economic Collaboration
 Economic linkages largely defined and driven by industry
 Auto manufacturing
 By-product is policy fragmentation at many levels
 Investment attraction, infrastructure renewal, market regulation, worker mobility,
border security, etc.
 Today’s climate of borderless trade, capital and mobility, forcing a renewed
government-business conversation around harnessing the region’s assets.
 Cluster formation and connectivity offer a distinct opportunity

14. Auto cluster in perspective
Clusters and Regional Economies: Implications for the Great Lakes-St. Lawrence Region (Christian Ketels)

15. Auto cluster in perspective
Source: Clusters and Regional Economies: Implications for the Great Lakes-St. Lawrence Region (Christian Ketels)
 History of auto collaboration
 The Canada-US Auto Pact signed in 1965
 Bi-national rescue packages post 2008-09 recession
 Integrated supply chain and geographic concentration of firms
 Heavy losses over past decade
 Market share drop from 64% to 58% over last 10 years
 Net loss of 220,000 jobs
 Recent developments
 Memorandum Of Understanding between Michigan and Ontario to promote innovation
and regional competitiveness in the auto industry
 Competing on unique competitive advantages
 Low carbon manufacturing industries
 Renewable bio-based materials

16. Auto cluster in perspective

17. Regional Assets
 Third largest economy in the world if it were a country
 Accounts for almost 25% of total US merchandise exports and more than 60% of
Canadian shipments
 Large industrial base along with a growing services sector
 Roughly 50% of Canadian manufacturing and 25% of U.S. manufacturing
 Approximately 30% of the combined Canadian and US workforce
 19 of the top 100 universities in the world are in the Region
 Produced 47% of university graduates in both countries
 Represents nearly 24.1% and 72.1% of R&D funding in the US and Canada
 Generated 26.2% and 68% of patents in the U.S. and Canada respectively
 Expansive, globally integrated transportation system

18. Challenges
 Rapid global change and technological innovation presents significant
challenges
 Global flow of goods, services, people and capital increasing to record levels
 Exchange of information and knowledge is becoming virtually instantaneous
 Ensuring the region’s long-term success requires new strategies:
 Leveraging commercial supply networks and value;
 Freeing up the border while identifying potential threats;
 Harnessing energy resources and systems as part of shift to a low carbon economy;
 Developing, attracting and retaining talent; and,
 Optimizing the performance of the region’s transportation network

19. Opportunities
 Different mandates and competing organizations affect ability to think
strategically about the Great Lakes-St. Lawrence Region as a shared
economic zone
 Lessons from around the world show the positive value and significant impact
that collaboration across borders, sectors and organizations can have on
shared economic regions
 Cali-Baja Bi-National Mega Region between the United States and Mexico
 Economic cooperation in the Baltic Sea Region
 Free Trade Zones along Danube River and in the Persian Gulf
 Council of the Great Lakes Region creating a more dynamic culture of
collaboration in harnessing the region’s comparative economic advantages
 Acting as a unifying force between government, business and academia by
developing a shared economic vision and strategy

20. Opportunities
 Other recommendations put forward by Dr. Christian Ketels that would inform
and advance this work include:
 Establishing a cluster network with the emerging water technology groups across the
Region
 Launching a policy peer group for the study and exchange of best practices in cluster
renewal and diversification
 Creating a Great Lakes–St. Lawrence Region STARS challenge fund
 Producing a regular State of the Great Lakes–St. Lawrence Region report