1Copyright©2001ProfessorMichaelE.Porter;CouncilonCompetitiveness;MonitorCompanyGroup,L.P.;andontheFRONTIERRegionalFoundationsofU.S.Competitiveness2Copyright©2001ProfessorMichaelE.Porter;CouncilonCompetitiveness;MonitorCompanyGroup,L.P.;andontheFRONTIERRegionalFoundationsofU.S.CompetitivenessInnovationandProductivityGrowthInnovativeCapacityInnovativeCapacityInnovativeCapacityCompetitiveness(Productivity)CompetitivenessCompetitiveness(Productivity)(Productivity)ProsperityProsperityThemostimportantsourcesofprosperityarecreatednotinheritedProductivitydoesnotdependonwhatindustriesaregioncompetesin,butonhowitcompetesTheprosperityofaregiondependsontheproductivityofallitsindustriesInnovationisvitalforlong-termincreasesinproductivityIntroduction3Copyright©2001ProfessorMichaelE.Porter;CouncilonCompetitiveness;MonitorCompanyGroup,L.P.;andontheFRONTIERRegionalFoundationsofU.S.CompetitivenessEducational,Research,andTradeOrganizations(e.g.,WineInstitute,UCDavis,CulinaryInstitutes)Educational,Research,andTradeEducational,Research,andTradeOrganizations(e.g.,WineInstitute,Organizations(e.g.,WineInstitute,UCDavis,CulinaryInstitutes)UCDavis,CulinaryInstitutes)Growers/VineyardsGrowers/Growers/VineyardsVineyardsWineries/ProcessingFacilitiesWineries/Wineries/ProcessingProcessingFacilitiesFacilitiesGrapestockGrapestockGrapestockFertilizer,Pesticides,HerbicidesFertilizer,Pesticides,Fertilizer,Pesticides,HerbicidesHerbicidesGrapeHarvestingEquipmentGrapeHarvestingGrapeHarvestingEquipmentEquipmentIrrigationTechnologyIrrigationTechnologyIrrigationTechnologyWinemakingEquipmentWinemakingWinemakingEquipmentEquipmentBarrelsBarrelsBarrelsLabelsLabelsLabelsBottlesBottlesBottlesCapsandCorksCapsandCorksCapsandCorksPublicRelationsandAdvertisingPublicRelationsPublicRelationsandAdvertisingandAdvertisingSpecializedPublications(e.g.,WineSpectator,TradeJournal)SpecializedSpecializedPublicationsPublications(e.g.,WineSpectator,(e.g.,WineSpectator,TradeJournal)TradeJournal)FoodClusterFoodClusterFoodClusterTourismClusterTourismClusterTourismClusterCaliforniaAgriculturalClusterCaliforniaCaliforniaAgriculturalAgriculturalClusterClusterStateGovernmentAgencies(e.g.,SelectCommitteeonWineProductionandEconomy)StateGovernmentAgenciesStateGovernmentAgencies(e.g.,SelectCommitteeonWine(e.g.,SelectCommitteeonWineProductionandEconomy)ProductionandEconomy)Source:CaliforniaWineInstitute,InternetSearch,CaliforniaStateLegislature.BasedonresearchbyMBA1997studentsR.Alexander,R.Arney,N.Black,E.Frost,andA.ShivanandaTheCaliforniaWineClusterIntroduction4Copyright©2001ProfessorMichaelE.Porter;CouncilonCompetitiveness;MonitorCompanyGroup,L.P.;andontheFRONTIERRegionalFoundationsofU.S.CompetitivenessClustersofInnovationInitiativeObjectivesToenhanceinnovationinregionaleconomiesby:UnderstandingthecompositionofregionaleconomiesUnderstandinghowclustersdevelopUnderstandinghowinnovationarisesDevelopinglessonsfromregionalcasestudiesthatinformkeydecisionmakers;and,Developingamethodology,process,anddatainfrastructurethatcanbeutilizedwidelyacrossAmericaIntroduction5Copyright©2001ProfessorMichaelE.Porter;CouncilonCompetitiveness;MonitorCompanyGroup,L.P.;andontheFRONTIERRegionalFoundationsofU.S.CompetitivenessClusterMappingProjectDataClusterMappingProjectDataClusterMappingProjectDataConsistentperformancemeasures,1990–1999–Employees–Wages–Establishments–PatentsSystematicdataonregionalclusters,industries,andpatenting–Empiricallyderivedclusterlinkages–EvolutionofclustersovertimeComparativedataatmultiplelevelsofgeography–County–MSA–Economicarea–StateConsistentperformancemeasures,1990–1999–Employees–Wages–Establishments–PatentsSystematicdataonregionalclusters,industries,andpatenting–Empiricallyderivedclusterlinkages–EvolutionofclustersovertimeComparativedataatmultiplelevelsofgeography–County–MSA–Economicarea–StateSurveysSurveysSurveysUniqueDataSourcesSurveys(1,025)–Bothpaperandelectronic–MeasurenumerousaspectsofbusinessandregionalclusterperformanceinaconsistentmatterthatallowsquantificationSurveys(1,025)–Bothpaperandelectronic–MeasurenumerousaspectsofbusinessandregionalclusterperformanceinaconsistentmatterthatallowsquantificationInterviewsInterviewsInterviewsInterviews(264)–Accesstheknowledgeandexpertiseofregionalleaders–Assessnumerousaspectsofbusinessenvironmentandclusterdevelopmentataqualitativelevel–Providenuancetootherdatasources–Helpidentifyuniquelessons,challenges,andopportunitiesInterviews(264)–Accesstheknowledgeandexpertiseofregionalleaders–Assessnumerousaspectsofbusinessenvironmentandclusterdevelopmentataqualitativelevel–Providenuancetootherdatasources–Helpidentifyuniquelessons,challenges,andopportunitiesIntroduction6Copyright©2001ProfessorMichaelE.Porter;CouncilonCompetitiveness;MonitorCompanyGroup,L.P.;andontheFRONTIERRegionalFoundationsofU.S.CompetitivenessRegionsandClustersStudiedPittsburghPittsburghPittsburghPharmaceuticals/BiotechnologyInformationTechnologyProductionTechnologyPharmaceuticals/BiotechnologyInformationTechnologyProductionTechnologyInterviews: