Writing for The New Republic, Sarah Rahman says that cluster-based development is gaining ground in several Federal agencies: the Economic Development Administration (EDA), Agriculture Department and, most recently, the U.S. Small Business Administration (SBA). This follows the Obama administration's fiscal year budget for 2011, which asks for recognition that "competitive, high-performing regional economies are essential to a strong national economy."

Rahman asserts that the new direction of these Federal agencies is long overdue, but welcome, as it strategically targets limited federal investment dollars around regional industry clusters to maximize potential economic impact. She feels that more federal agencies should follow the example set by these three agencies and assume a smarter posture in investments for regional innovation. The new cluster paradigm will aim to provide bottom-up approach to support region-based systems of business development, innovation and talent matching by applying it across the entire spectrum of multiple Federal agencies..

According to Rahman, "EDA's proposed $75 million Regional Innovation Clusters program would provide regional planning and matching grants focused on leveraging regions' competitive strengths to boost job creation and economic growth."

Meanwhile, the Agriculture Department will strive to promote the role of rural areas as potential sources of regional innovation. Federal budget 2011 will support a creative Rural Innovation Initiative with $176 million by "promoting a regional outlook in the planning and coordination of rural development programs at USDA."

Finally, U.S. Small Business Administration (SBA) has announced two new programs focused on accelerating small business growth and job creation through existing regional industry clusters. Rahman writes that first of the programs, Regional Innovation Cluster program, "encourages applicants to identify in a bottom-up fashion their particular regional industry cluster focus and demonstrate the partnerships, technical capacity, and local and regional assets they have available to support its growth. The second, the Advanced Defense Technologies program, jointly seeks with the Department of Defense to identify and support regional innovation clusters that can specifically help meet critical defense needs in areas like advanced robotics, cyber-security, and applied lightweight materials. Both programs will award winning projects up to $600,000 for one year to provide the sort of business training, tech transfer, and mentoring services that could help support the growth and development of small businesses within the industry cluster. A total of 15 winners will be selected across the nation."

Sources:

Sarah Rahman: "SBA Gets Into the Clusters Business", The New Republic, July 14, 2010
Sarah Rahman and Mark Muro: "Budget 2011: Industry Clusters as a Paradigm for Job Growth", The New Republic, February 2, 2010

19 July 2010