Commerce Industry Cluster Strategy
Chris Harder
NC Department of Commerce
Division of Policy, Research & Strategic Planning
The Purpose Behind Targeting Industries and Clusters
• The goal of strategic economic development is to guide NC’s economy with foresight
– Industry clusters are one strategy used to address the question of foresight
• Strategic analysis (effectively utilize limited/scarce resources)
• Priority setting (planning for the future)
Why Develop Industry Clusters?
Competitive advantages for companies:
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Companies can draw from specialized labor pools
More efficient and expedient supply chain
Integrated infrastructure
Knowledge spillovers
Greater opportunities to share best practices and innovative technologies.
Competitive advantages for N.C.’s economy:
• Reduces economic leakage; more economic activity within N.C.
• Increases export base and job growth (increase multipliers)
Commerce uses cluster analysis to:
• Strategically target industries ‐ Recruitment and Expansion
‐ Proactive marketing strategies
‐ Identify and leverage buyer‐supplier relationships
• Inform workforce development strategies
‐ Align education, training and skill development programs with target industries
• Other: Identify export/trade potential; rural development strategies, etc.
Existing Target Industry Clusters
• Aerospace and Aviation
• Advanced Manufacturing
• Automotive, Truck and Heavy Equipment
• Biotechnology/Life Sciences
• Business and Financial Services
• Chemicals, Plastics and Rubber
• Forest Products/Agribusiness
Furnishings
Green Energy
Healthcare Services
Military/Defense
Information and Communications Technologies
• Textiles
• Transportation, Logistics and Distribution
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Example Analysis ‐ Aerospace/Aviation
1. Identify core Aerospace/Aviation industries
2. For each core industry, identify supply chain industries
• Use U.S. & N.C. input‐output tables
• Industries significantly linked through trade.
3. Benchmark the competitiveness of each core‐industry and their supply‐chain in NC against the nation as a whole
• Employment growth, concentration, wages, output, etc.
• Tool developed by UNC‐CH to monitor and track clusters and their supply chains on an ongoing basis. Aerospace/Aviation ‐ Core Industries in U.S
Aircraft Manufacturing
Guided Missiles and Space Vehicles
Air Transportation Support Activities
Aircraft Engine & Engine Parts Manufacturing
Propulsion Units & Parts Manufacturing
Search, Detection, and Navigation Instruments
Other Aircraft Parts & Auxiliary Equipment
Air Transportation
Broadcast & Wireless Communications Equipment
Supply Chains
Supplier Industry
Buyer Industry
Buyer Industry
Supplier Industry
Core
Industry
Buyer Industry
Supplier Industry
Supplier Industry
Buyer Industry
Inputs & outputs of product and service markets
U.S. Supply Chain
Aircraft Engine & Engine Parts Manufacturing
Broadcast & Wireless Communications Equipment
Aircraft Manufacturing
Air Transportation
Nonferrous Metal Foundries
Aircraft Engine & Engine Parts
Scientific Research & Development
Specialized Design Services
Metal Valve Manufacturing
Guided Missiles and Space Vehicles
N.C. Value Chain
Aircraft Engine & Engine Parts Manufacturing
Broadcast & Wireless Communications Equipment
Aircraft Manufacturing
Air Transportation
Nonferrous Metal Foundries
Aircraft Engine & Engine Parts
Scientific Research & Development
Specialized Design Services
Metal Valve Manufacturing
Guided Missiles and Space Vehicles
Blue = industry linked in NC; White = industry not linked in NC
Conclusion
• Clusters utilize information on existing companies and industries, and the relationships between them, to determine industry strengths, weaknesses, opportunities and threats
• Well developed clusters increase company and industry competitiveness
• Cluster data can be used to:
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Market industry strengths
Target recruitment efforts
Broker services for existing industries and companies
Inform workforce development strategies
• Use in coordination with other ED strategies (market analysis, trade, workforce development, etc.)
Questions?
Contact: Chris Harder
Director of Economic Analysis
Policy, Research & Strategic Planning
charder@nccommerce.com
919‐715‐1025