Growth-minded businesses know and value collaboration and pursue it through various networks. Many join industry-focused groups or regional cohorts. Some look to vertical market partners and build relationships with like-minded businesses.
With the power of business clusters you can achieve all of these connections.
What Defines a Business Cluster?
The concept of business clusters was first introduced in 1998 by Michael Porter in his book, The Competitive Advantage of Nation. Porter described clusters as geographic concentrations of businesses, institutions, and organizations serving the same industry or field. These interconnected entities have similar interests and drives, focusing in on a common economic arena. Often, the entire value chain exists within a cluster including suppliers, manufacturers, distributors, academic institutions, researchers, and workforce training, as well as those who provide relevant support services.
Examples of well-known clusters include the tech cluster in Silicon Valley and the automotive cluster in Detroit. But, clusters exist on a smaller regional scale as well. The state of Ohio is home to the largest polymer industry cluster in America, and is often referred to as a “polymer powerhouse”. It is home to more than 2,400 polymer related companies, including seven Fortune 1,000 polymer company headquarters. The cluster includes a world-class supply chain of resin suppliers and compounders, designers and materials suppliers, mold builders, plastic and polymer processors, equipment manufacturers, industry associations, academic and technical institutions, and economic development groups. Close proximity across the value chain provides the businesses within Ohio’s polymer cluster significant advantages over those industry participants outside it.
For more information on clusters throughout the U.S., see the Cluster Mapping page created by a collaboration between the Harvard Business School and the U.S. Economic Development Administration, and the U.S. Small Business Administration’s Clusters Initiative.
How to Identify Your Clusters
For the manufacturing industry, cluster members can include those performing the same processes (i.e. casting, molding, forming), producing similar products (i.e. dies, machine pieces), or those serving the same industry (i.e. medical, automotive, defense).
Looking at your industry, materials, products, and processes can help you identify your regional clusters. Start by analyzing the NAICS codes of the industries you serve and compare with businesses in your area. Those with codes similar to your industry should be considered potential cluster members.
Next, look into companies performing similar work. For example, injection molders and food processors may fall into different industries, but they have similar equipment, regulations, and workflow processes. For example, an injection molder could learn more about how a common material behaves from a business using it in an extruder.
Finally, development firms, universities, consultants, lawyers, and other research organizations should be included. Any group with a vested interest in improving your business processes or industry should be considered a cluster member.
How Clusters Benefit Your Business
You can use clusters to build a competitive advantage by sharing knowledge and resources with other members. In this manner you can solve problems faster, enhance productivity and boost innovation.
Members of a cluster benefit by:
- Close proximity to suppliers and buyers
- A well-trained, highly skilled labor pool
- Access to a wide array of resources (equipment, services, technical and business knowledge)
- Support from government and public sector programs
How You Can Participate in Your Clusters
The most effective avenue to leverage this powerful network is to engage in local meetings and events, especially those that have a cross section of industry participants in both industry segments and scale ranging from Fortune 500 companies to entrepreneurs. While national or international events may draw a larger audience, local events cement relationships with more diverse and potentially more valuable collaborators to accelerate your growth.
Leverage Local Resources
Effectively navigating the array of available resources, leveraging developments within the region and collaboration building can be challenging for participants. OH!Manufacturing is here to help! Projects such as the STEAM Innovation Center are designed as a hub for manufacturing businesses, researchers, investors, and other local organizations to collaborate, and grow the manufacturing industry in Central Ohio.
To learn more about how OH!Manufacturing can help you leverage your clusters, contact us at 614-776-5265 or fill out a short contact form today.
Gary is responsible for ensuring the Manufacturing Services team provides comprehensive, high-quality services that help manufacturers grow their business and improve operating efficiency.He has been consulting with manufacturing companies on technology development, commercialization and implementation for more than 20 years.Gary began his career as a manufacturing engineer in the glass and steel industries, then moved into managing the development of process energy technologies for several manufacturing industries. Gary’s work with manufacturers has resulted in the development of new products and services, as well as cost reduction and efficiency improvements in numerous manufacturing operations.
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