Connecticut Industry ClustersConnecticut’s cluster-based economic development initiative is built around the idea that nurturing the state’s key industries improves the competitiveness of businesses within these industries, in turn boosting our economy. By combining the market knowledge and expertise of businesses with the talents and resources of government, education and economic development organizations, Connecticut’s industry clusters better prepare each of their members to face the challenges created in the global marketplace.
"Industry cluster" is an economic development concept championed by Dr. Michael Porter of the Harvard Business School. Dr. Porter is respected worldwide as an expert in global economic strategies and was among the first to recognize the power of clusters to boost regional economies.
A cluster is defined as a concentration of companies and industries in a geographic region, which are interconnected by the markets they serve, and the products they produce, as well as the suppliers, trade associations and educational institutions.
Clusters have been forming naturally for years, both in the U.S. and abroad. The most famous clusters include: Silicon Valley for its microelectronics, biotechnology and venture capital markets; Route 128 in Massachusetts for its software, computer and communications hardware, and health care technology sectors; and North Carolina’s Research Triangle for its pharmaceutical, agriculture and telecommunications sectors.
Creating a business environment in which clusters can grow and prosper takes an enormous amount of cooperation between government and industry. In 1998, a task force of 125 business leaders from Connecticut was assembled to study the best method of implementing cluster-based economic development in our state.
The task force identified six industry areas key to Connecticut’s economic competitiveness: manufacturing, financial services, telecommunications and information, health care services and high technology. The task force’s research led to the legislation passed in 1998, effectively launching Connecticut’s Industry Cluster Initiative under the Department of Economic and Community Development.
Throughout 1998, progress was made in a number of areas related to nurturing industry clusters. One of the most important accomplishments was the establishment of the Governor’s Council on Economic Competitiveness and Technology, composed of CEOs from a cross-section of industries, legislative leaders, heads of key educational institutions, labor representatives, officials of industry associations and several state commissioners. The council meets each quarter to monitor cluster progress and find ways to enhance and support it.
In October 1998, the BioScience cluster was the first cluster to be formally launched. Overseen by Connecticut United for Research Excellence (CURE), the cluster started with $300,000 in state seed money and $700,000 from industry contributions. The cluster has since received more than $370,000 in additional funds from DECD and $61.5 million in public funds. Currently, more than 110 Connecticut organizations are members of CURE. The cluster’s activities have led to the establishment of a BioScience Facilities Fund totaling $60 million; administered through Connecticut Innovations, the state’s technology investment arm, the fund will underwrite the development of incubator and lab space.
In July 1999, the Aerospace cluster, under the direction of Aerospace Components Manufacturers (ACM), was introduced. The state’s investment of $769,000 was leveraged by $2.3 million in industry funds and $140,000 in other public funds. ACM is made up of more than 40 manufacturers from the aerospace industry to date and is at work in areas such as progressive manufacturing, workforce development and consolidated purchasing, and to identify future roles in the worldwide aerospace market.
In October 1999, the Governor launched a Software/Information Technology cluster known as eBizCT, an affiliate of the Connecticut Technology Council (CTC). This cluster immediately worked to identify and address obstacles in areas such as workforce development and regulatory environment. To date, the group has received more than $1 million in state and industry dollars. CTC continues to develop a strategic plan to strengthen its industry, promote growth, visibility and ability to compete in a global market, and to support e-business strategies of all Connecticut companies.
Also in 1999, what originally began as a Business Training Network was identified as the Metal Manufacturing cluster. Originally launched with a $10,000 grant, the Metal Manufacturing Education and Training Alliance (METAL) received a $1.7 million federal workforce-training grant for a two-year project to provide a range of training in new workplace technologies and manufacturing processes. The cluster’s efforts have been funded by $135,000 from DECD and over $970,000 from industry contributions.
In December 2000, Maritime was introduced. Its organizational center, the Connecticut Maritime Coalition (CMC) was formed to manage its activities and initiatives in the areas of workforce development, dredged material management, transportation strategy, and commercial fishing advocacy. Seeded by $103,000 of state funds and matching private sector resources, CMC represents five components of the industry – transportation, manufacturing and services, recreation, commercial fishing and environment – and is currently made up of 21 member businesses. To date, the cluster has received more than $165,000 in state money, $270,000 in industry dollars and $63,000 in public funds.
In February 2001, the seventh operational cluster, Plastics, was recognized. CPC is dedicated to workforce development and eliminating threats to the industry such as labor pool depletion, market share erosion and relocation pressures from other states and countries. The state provided the initial seed money to develop the plastics cluster; to date, that has totaled $165,000 from the state, $192,000 in industry funds and close to $78,000 in other public monies. With those funds, the cluster plans to develop its image and membership during its first year, and to activate programs in the areas of workforce development, progressive manufacturing, business practices and shared services.
In March 2002 Connecticut’s Agricultural Business cluster (CAB) was launched. The cluster is seeking to raise the level of competitiveness and increase profitability of individual agricultural businesses while maintaining responsible stewardship of the state’s natural resources. Funding has been provided by the state, $140,000, industry cash, $100,000 and public funds, $130,000.
The Insurance and Financial Services cluster marks the ninth cluster in the state, ensuring that Connecticut continues to compete as a primary location for insurance, asset management, banks and other financial services companies. DECD is providing $100,000 in funding, while industry adds more than $175,000.
A number of other cluster-related projects have taken shape over the last year, in areas including manufacturing, workforce development, urban revitalization, transportation infrastructure, regulatory and tax climate, and international trade.
Teamwork is the key to making Connecticut competitive in today’s global economy. The Industry Cluster Initiative, as this strategy has come to be known, puts Connecticut companies on the fast track; develops the resources needed to compete globally; achieves sustained, measurable growth in jobs, education levels, start-ups and R&D funding; and ensures that positive results extend beyond a single contract, company or city. To learn more about Connecticut’s cluster initiative, look thru the other links available throughout the DECD website.