The Small Business Administration announced on July 7 its first lead role in support of existing regional innovation clusters. SBA’s Regional Clusters Initiative (see www.sba.gov/clusters) will provide $600,000 in one-year contracts to each of 10-15 cluster systems throughout the U.S. that support small businesses. The program has a general flavor that applies to all sectors as well as an advanced defense-technology version.
As I’ve noted in “SBA Nominee Mills to Favor Clusters” (PBN, Feb. 28, 2009), SBA Administrator Karen Mills is a longtime advocate for the cluster economic-development theory. While serving as the jobs and innovation czar for Maine Gov. John Baldacci prior to joining Obama’s administration, Mills co-authored a 2006 Brookings Institute report advocating a federal role in catalyzing and expanding this sector-based economic approach to growth.
While in Maine, she also played an integral role in helping establish a boat-building, cluster- development program that resulted in a $15 million Department of Labor WIRED grant. Mills also was a part of a cohort that led an event in Maine that resulted in development of the Maine Food Producers Alliance, the first such organized effort to catalyze this cluster in the state.
There’s reason to believe that Mills’ knowledge and network in cluster development have resulted in the slew of other agency programs focused on regional innovation clusters, or RICs.
While it is difficult to confirm how central Mills has been to this shift, I spoke some months back to a former senior Bush administration official who worked in both the EDA and SBA who indicated that Mills was, at that time, one of very few in federal government who understood clusters and their use as a regional economic-development tool. So, it may be reasonable to assume that Mills is the behind-the-scenes player driving the Obama administration’s evident interest in this innovation and regional development paradigm.
This suggests a number of things:
• RICs are indeed a federal priority for regional economic development and innovation – never before have so many federal agencies shown this sort of concurrent commitment to a single economic-development strategy.
• If Mills can be credited for the federal government’s shift to RICs, her influence is significant in its breadth (across agencies) and commitment (hundreds of millions of federal dollars in the current fiscal year alone)
• The speed with which new programs have emerged (five RIC grant or contract initiatives since February) may indicate a desire by the federal government to commit to programs prior to the September fiscal year-end due to concerns about the midterm election and what it will mean to the administration’s fiscal 2011 budget priorities, which include continued and increased multiagency support for cluster development.
Whatever the reason, never before has any administration shown such aligned support for a discrete program.
Like any economic-development strategy, cluster development requires a long-term commitment. For clusters to succeed, several things will need to happen: 1) the federal government will need to show sustained support, over its present and potential future terms of office, to give clusters the proper policy and funding support; 2) as clusters are self-organizing, with private sector-led groups of players (e.g. companies, equity funders, universities, incubators, etc.), the private sector must carry the ball on cluster development, albeit with formative funding and policy support from the government; 3) private capital markets (individual and professionally managed venture capital), critical to clusters’ success, must remain robust.
The federal government seems to be doing its part to catalyze, expand and sustain cluster development. While it’s not going to get easier for them to do so, given political realities of the coming midterm elections, it’s critical that the private market not miss this opportunity to align with and leverage the government’s broad-based initiative. The government can’t and won’t bring us out of this recession and innovation challenge. We must all see ourselves as cluster catalysts. •
Michael Gurau is president of Clear
Innovation Partners, a cluster-development organization based in Freeport, Maine. He can be reached at mgurau@clearinnovationpartners.com.
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