The impact of industry clusters on the economy in the United States

 Morfessis, I, T. (2007). Defining economic development leadership for the 21st century global economy. Economic Development Journal. Spring

Below is a sample of a previous critique

The impact of industry clusters on the economy in the United States

Sanchez, T. & Omar, A. E. (2012) The impact of industry clusters on the economy in the United States. Academy of Entrepreneurship Journal, 18(1) pp. 99 – 114.

This article studies industry clusters in-depth and uses research data to show how they work and were originated, explaining the advantage and disadvantages of industry clustering.

Cluster industries are “a geographically proximate group of interconnected companies and associated institutions in a particular field, including product producers, service providers, suppliers, universities, and trade associations” according to Harvard University. According to Michael Porter, the person responsible for the term, clusters can affect competition by increasing productivity, driving innovation, and facilitating new business formation. The author also looks at the role of government in clusters, and states deployment should take place in industry level instead of supporting individual companies only (Sanchez, 2012).

The author lays the advantages and disadvantages of clustering. Advantages include (1) lower cost of doing business; (2) access to larger customer base; (3) attract and retain high quality; (4) Developing IT professionals and technical talent; and (5) having a better quality of life. Disadvantages include (1) Broad definitions; (2) Difficulty for regions to determine the industries best suited for clustering; (3) not easy to establish trust and supportive institutions (clusters require collaborations among the companies).

The article takes Silicon Valley as the target for the research. The area is an information technology cluster, where key technologies are being developed for over 40 years with the collaboration of workers and firms, and the leadership of Stanford University. Silicon Valley had been the most famous for innovations in software and Internet services and has significantly influenced computer operating systems, software, and user interfaces (Sanchez, 2012).

The study showed that the cost of living is forcing workers to relocate throughout the nation and join offshore companies and that the IT workforce the system is important to help a region’s workers and business to succeed.  

The article ends up concluding that clusters continue to develop with increased productivity and capability to compete in a global market. Clusters are the main factors for increase of jobs, income, and global export goods (Sanchez, 2012).There should be more incentive in an innovative economy than a service economy for the United States, by creating a strong collaborative workforce, maintain a suitable infrastructure for innovation, have the government invest in advancement for innovative technology and provide an incentive to companies.

 

Critique 

1.  Do you agree or disagree with the main conclusions of the article?  Explain why. 

I agree with the main conclusions. I think clusters provide a competitive environment where companies will fight to produce and innovate more than ever. As mentioned in the article “nothing sparks productivity better than having your competitor across the street.” The drive for innovation in technology highly benefited Silicon Valley and the development of that region. If The United States has more drive to be an innovative economy, it will definitely help with the economic development.

 

 

 

2.  Was there anything left out of the article?  Often, it is not what is said, but what is not said that makes the difference. 

I think that this article was mostly self-explanatory. However, I would like to understand more how the results of the study are going to influence the Cluster in Silicon Valley. Will the fact that the workers need to relocate have a negative impact on that specific cluster? 

 3.  How could you use the information presented in the article? 

 I think the article is important to understand how clustering can benefit your business. The article also talks about the steps to run a successful cluster ((1) Core Industry) (2) Potential Cluster Region, (3) Potential Cluster Members, (4) Conduct Supply Chain Analysis, (5) Conduct a Social Network Analysis, (6) Conduct SWOT Analysis, (7) Select Cluster Strategy Team, Program Member, Champion, (8) Implement and Manage The Cluster), which helps entrepreneurs to understand a cluster, find the best fit for the company, and how to introduce the new business to that cluster.

 

4.  Discussion Questions 

What is the biggest takeaway from this article that you think you might use?