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IndustryClusterAnalysis <br />Industryclusteranalysisisacommonapproachusedineconomicdevelopmenttoevaluate <br />theeconomicbaseofaregion,usuallyatthecountyormulticountylevel.Clustersarehighly <br />integratedgroupsofbusinesseswithstrongverticalandhorizontallinkages.Notonlydoes <br />industryclusteranalysisdescribethecurrentstate,butthistechniqueisoftenusedto <br />identifyareasofrecruitmentopportunity.Industryclusteranalysis,however,isabroad <br />conceptratherthanapreciseterm.Thereisnotaunifieddefinitionofindustryclustersor <br />theirsubcomponents. <br />Ingeneral,aclusterconsistsoffirmsandrelatedeconomicactorsandinstitutionsthatdraw <br />productiveadvantagefromtheirmutualproximityandconnections.First,linkagesare <br />establishedinwhichbusinessesbuildrelationshipswithexistingspecializedsupplierfirms <br />throughoutaregion.Second,thesedevelopingclustersattractadditionalsupplierfirmsand <br />supportingbusinessfromoutsideofthearea.Finally,bycreatingacriticalmassof <br />production,labor,andinformation,relatedmanufacturersandsupplierfirmsareattractedto <br />thesedevelopingclusterregionstotakeadvantageoftheexistinghumanandphysical <br />infrastructure. <br />Acomprehensiveanalysisofindustryclustertechniquesreleasedby TheBrookingsInstitute <br />(MakingSenseofClusters:RegionalCompetitivenessandEconomicDevelopment,2006) <br />highlightssevenclusterdriverscalledͻƒźĭƩƚŅƚǒƓķğƷźƚƓƭͼofclustering: <br />Table8:ClusterIndustryMicrofoundations <br />MicrofoundationsDescription <br />LaborMarketPoolingStrongmarket/supplyforthedistinctiveskilledlaborneeded <br />SupplierSpecializationLargenumberofindustrialcustomersinthenearbyarea <br />createsufficientdemandtoenablesupplierstoacquireand <br />operateexpensivespecializedmachinery <br />KnowledgeSpilloversConcentrationofmanypeopleworkingonasimilarsetof <br />economicproblemsproducesawidelysharedunderstanding <br />ofanindustryanditsworkings <br />EntrepreneurshipEntrepreneurshipincludesboththewillingnessofindividuals <br />toformnewbusinessesandthewillingnessofownersof <br />existingbusinessestoundertakenewideas <br />PathDependenceandLockInSetofopportunitiesavailabletoanyparticularplacewillbe <br />shapedbytheeconomicactivitiesithasalreadyestablished <br />CultureCulturemaybeparticularlyimportantinhelpinglocal <br />economiesandclustersadapttochangeovertime <br />LocalDemandDemandinglocalconsumerscanpressurefirmstoinnovate <br />andtomaintainandimproveproductquality,whichinturn <br />improvestheircompetitivenessinothermarkets <br />14 <br />| <br />City of La Porte, Texas - Economic & Demographic Assessment January 2009 <br /> <br />