Cluster-Compatible

With Its Conservative Legacy, Clusters Policy Represents an Opportunity for Bipartisanship

SOURCE: AP Photo/Gerald Herbert President Barack Obama, accompanied by business leaders, makes remarks about the connection between innovation and jobs, in the Rose Garden on July 2, 2009. The Obama Administration, with help from the Recovery Act, has spearheaded a number of new programs designed to advance regional innovation clusters policy and bolster American competitiveness.

The Obama administration’s enthusiasm for regional innovation clusters (or, RICs) as an organizing framework for sector-based economic growth and job creation is something that policy organizations (like Science Progress and the Brookings Institute) and regional columnists like me have followed closely over the past two years. In my articles I’ve described what clusters are and why they matter, what the administration is doing to catalyze clusters and in particular the unique role of Small Business Association Administrator Karen Mills in driving this approach. Given the new political realities of the mid-term election, I now offer some insight into cluster policy’s historic origins, and suggest that they may be a policy in which both parties can find common ground.

The Republican provenance of clusters in policy

Harvard Business School Professor Michael Porter is the most widely recognized advocate for this strategy for regional competitiveness. And one of the earliest organizations formed to advocate for competitiveness—including a full embrace of clusters—is the Council on Competitiveness, a nonprofit policy group formed in 1986 by the chairman of then President Ronald Reagan’s Commission on Industrial Competitiveness, John A. Young; Porter was on the council’s board and still serves on its executive committee.  The council sponsors conferences, seminars, and other special events to help catalyze new ideas and solutions, and to circulate its findings in topics that speak to competitiveness in specific regions (e.g. Brazil) and in key sectors (e.g. energy).  The council’s Regional Initiatives reports serve to describe and prescribe cluster development process and strategies.

Michael Porter’s support for a Republican viewpoint is not limited to the council.  Porter was tapped to chair Republican Mitt Romney’s Global Competitiveness Policy Advisory Group, which also included ex-eBay CEO Meg Whitman and JP Morgan Chair William Harrison.  A Google search turns up Porter’s personal donations to Republican campaigns and organizations in Massachusetts. HBS’s Institute for Strategy and Competitiveness, ISC,—founded and led by Porter—serves as the center of Porter’s life’s work on the competitive advantage of companies, of region, and of nations.

SBA Administrator Karen Mills—an Obama appointee—began working with Porter when she chaired Maine’s Council on Competitiveness and the Economy for Maine Gov. John E. Baldacci and helped organize a boat-builders cluster in the state. Mills is widely recognized for introducing and driving Porter-centric cluster policy and programs at the federal level—from SBA to the Department of Commerce’s Economic Development Administration, EDA, to Department of Energy to USDA.  Mills co-authored a 2006 Brookings Institute report that described a roadmap for a federal role for clusters; like most cluster reports, this one cited Porter’s work as its framework.  During 2010, each of these federal agencies funded regional innovation cluster related projects—including EDA granting $1 million to ISC for its Cluster Mapping Project—catalyzed by Mills’ advocacy and leadership.

Another historical point of interest—the America COMPETES Act—America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act of 2007—was signed by President George W. Bush and became law in August 2007. This act was designed, “to invest in innovation through research and development, and to improve the competitiveness of the United States.” COMPETES was reauthorized in May in the House by a vote of 262-150—so included more than a few Republicans. This updated version of the act included language to create a competitive regional innovation cluster grant program. While this House approved bill has yet to pass the Senate, it shares the same right-leaning legacy that spawned the Council on Competitiveness.

Clusters are good value for money

As argued by SBA’s Karen Mills and others, cluster development is private sector led and is a good “bang for the buck”—activating, growing, and sustaining clusters requires convening and connecting regional sector market actors for education, network-formation, and commerce.  Existing technology, trade, economic, and community development organizations are well suited to lead and tend to find ready support for these activities through private-sector sponsorship and member fees.  The FY 2010 slew of cluster awards is meant to be just the first step in a multiyear push for clusters at the federal level. In the contentious political environment that seems to suggest stalemate across a range of fiscal and social issues however, this initiative could get swallowed up with a host of other Democratically developed plans to stimulate the economy to create jobs.

An opportunity for agreement

Given that cluster policy has its roots in Republican thought, has a high return on investment, and is inexpensive and thus deficit-friendly, there seems to be an opportunity for this issue to gain bipartisan support even in a contentious political environment. Republicans in Congress ought to be happy (and justified) to claim it as their own, while Democrats too can tout their success in advancing progressive, job-creating, innovation-accelerating economic policies.

Both federal and state governments have precious little capital lying around to fund much of anything new.  But considering its historical Republican support and the cross-agency buy-in from a Democratic administration working to find common ground, this seems one program that ought to be win-win for both parties and for the country.

Michael Gurau is president of Clear Innovation Partners, a firm formed to catalyze, grow, and sustain regional innovation clusters.  You can reach Michael at mgurau@clearinnovationpartners.com

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