In his column last weekend, Dean James Shaffer of the University of Southern Maine wrote about the role of business clusters for stimulating innovation and economic development. As clusters are indeed very important, I would like to elaborate further on the theory behind them and how it relates to Maine.
As Dean Shaffer wrote, clusters are very much about networking. Successful clusters are characterized by intense linkages at many levels between various entities:
- At the state and regional level: development agencies, incubators, universities and providers of specialized technical and vocational training.
- At the company level: firms both large and small, established and start-ups, both “upstream” and “downstream,” i.e. suppliers of specialized inputs and consumers of immediate output; venture capital firms and banks.
- At the people level: highly trained individuals. On the technical side, these are researchers, scientists, inventors, engineers and trained operators. On the business side, they are entrepreneurs, finance and marketing specialists and experienced managers.
Universities are a critical part of any cluster. In fact, the leading clusters author Michael Porter described all evolved around at least one major university. Faculty and university staff provide readily available expertise which serves as the backbone of entrepreneurial firms, while graduates and students supply a highly trained work force. In clusters, people often move back and forth between university labs and entrepreneurial firms, feeding current knowledge and talent into emerging business opportunities.
Importantly, firms and people in a cluster are usually located in close geographical proximity. This is somewhat paradoxical, because in today’s globalization, talent is often sourced throughout the world. All the same, business clusters are often circumscribed within a small geographical area, sometimes not merely a city, but even a city district: for example movies in Hollywood or advertising on Madison Avenue in New York. Such proximity allows immediate access to potential employees, suppliers and specialized information. Also, closeness brings intimate knowledge of capabilities which allows a high degree of specialization and complementarity.
Maine geography, for all its beauty, presents a challenge for clusters. Most of the specialized firms that are potential participants in clusters are in the more developed southern part of the state, while the flagship campus of the University of Maine, the academic home of most of the experts with national and worldwide reputation, especially in engineering and the sciences, where most of the National Science Foundation grants in the state are won, is a two-hour drive up in Orono. I drive this distance often. It is a nice drive, but not a trivial distance.
To develop the Maine technology cluster, we need to consider and adjust to it. I-95/I-295 is, of course, the main transportation artery of the state, providing the lifeblood for companies and banks, state agencies and colleges, hotels and restaurants from Kittery all the way to the Canadian border. But equally importantly, we need to make it our own innovation highway and commit to bringing the university’s innovativeness and business ingenuity together. This can be done by:
- Encouraging close and frequent contact between University of Maine scientists and businesses in the southern part of the state and collaborating on entrepreneurial ideas.
- Strengthening the partnership between the University of Maine and University of Southern Maine, as well as with other academic institutions where patents and research grants are obtained, to spur innovation.
- Establishing and strengthening partnerships with nonuniversity research labs, such as The Jackson Lab and Maine Medical Center.
The importance of clusters for stimulating innovation and promoting economic development cannot be overstated. We do not need to reinvent the wheel here; rather, let us study what has worked elsewhere and carefully adapt it to the conditions in Maine. University expertise, especially in the sciences and engineering, is at least as important for clusters as entrepreneurial drive. Linking the two often happens through a two-hour drive on I-95.
Ivan Manev, an accomplished scholar in international business and entrepreneurship, joined the faculty of the University of Maine in 1997 and currently serves as dean of the Maine Business School.