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Focusing on Regional Competitive Advantage. Module Three. Producing a High Quality Plan: The Essential Components. Evidence-Based. Practical. Team’s Regional Plan . Aligned with Vision & Goals. Broadly Supported. Focused on Regional Economic Development . Overview of Module Three. - PowerPoint PPT Presentation
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Focusing on Regional Competitive Advantage
Module Three
Producing a High Quality Plan: The Essential Components
Evidence-Based
Focused on Regional Economic
Development
Aligned with Vision &
Goals
Broadly Supported
Practical
Team’sRegional
Plan
Overview of Module Three
• Investigate the region’s economic advantage
• Explore regional data to identify regional industrial clusters
• Deliverable: Select industry clusters for further exploration
• HQP: Draft a rationale for industries selected
EXPLORING COMPETITIVE ADVANTAGE
Competitive Advantage
Business shapes the economic value of a
region, but places can help shape, nourish,
and sustain local enterprises and
industry.
Exploring Competitive Advantage
Demand Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and Supporting
Industry
Competitive Advantage Elements
Based on Porter’s Diamond Theory – Porter, M. (1990)
Demand Conditions
What conditions influence demand
for goods or services produced
in the region?
Demand Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and Supporting
Industry
Competitive Advantage Elements
Factor Conditions
• Infrastructure
• Resources & Materials
• Skilled Workforce
Demand Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and Supporting
Industry
Competitive Advantage Elements
Firm Strategy, Rivalry, Composition
• Region’s portfolio of businesses• Entrepreneurship activity and support• Mix of industries
Demand Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and Supporting
Industry
Competitive Advantage Elements
Business and Industry
INSERT YOUR REGION’S CHART
LIKE THIS EXAMPLE HERE
Related and Supporting Industry
Do industries buy and sell from each other regionally?
Do any strong value chains exist in the region?
Demand Conditions
Factor Conditions
Firm Strategy, Structure, and
Rivalry
Related and Supporting
Industry
Competitive Advantage Elements
Value Chain Example
Grape Stock
Fertilizers, Pesticides, Herbicides
Grape Harvesting Equipment
Irrigation Technology
Specialized Publications
Public Relations & Advertising
Labels
Caps & Corks
Bottles
Barrels
Winemaking Equipment
Educational, Research & Trade Organizations
Growers/Vineyards
Wineries/ProcessingFacilities
State Government Agencies
California Agricultural Cluster
Tourism Cluster
Food Cluster
Wine
Source: California Department of Food and Agriculture
OVERVIEW OF INDUSTRY CLUSTERS
Industry Clusters Defined
Similar and related firms in a defined geographic area that share:• Common markets• Technologies• Worker skill needs• Buyer-seller relationships
Two Types of Clusters
• Value chains (Vertical clusters): working together toward a common product
• Competing (horizontal clusters): drawing from the same raw materials, infrastructure, labor force
Auto Industry
Software Industry
Overview of Clusters in Your Region
Understanding ChangesMoving Up or Down
Change in Percentage of
Jobs in Industry over Time
Growing
Declining
Understanding ChangesMoving Left or Right
Relative Concentration of Industryin the Region Compared to the Nation
Less More
Understanding Changes
Emerging• Growth in % Jobs over Time
• Lower Concentration of Industry in Region
Stars• Growth in % Jobs over Time
• Higher Concentration of Industry in Region
Transitional• Decline in % Jobs over Time
• Lower Concentration of Industry in Region
Mature
• Decline in % Jobs over Time
• Higher Concentration of Industry in Region
Location Quotient: Measure of Concentration of Industry
Perc
ent C
hang
e in
Job
s ov
er
Tim
e
Regional Clusters: 2002-2007INSERT YOUR
REGION’S CHART LIKE THIS
EXAMPLE HERE
Regional Clusters: 2006-2011INSERT YOUR
REGION’S CHART LIKE THIS
EXAMPLE HERE
Behind the Bubble Chart
Location Quotient more than 1 = Concentration
INSERT YOUR REGION’S CHART
LIKE THIS EXAMPLE – Move
line to divide 1+ LQ
Behind the Bubble Chart
Industries with Greatest Percentage Growth
INSERT YOUR REGION’S CHART
LIKE THIS EXAMPLE – Adjust red circles
to top 5
Examining the Leaky Bucket
The Regional Economy
Goods or Services Purchased outside
the Region$
Looking at Regional Expenditures
INSERT YOUR REGION’S
CHART LIKE THIS EXAMPLE
Regional Industrial Clusters: Digging Deeper
• Identify the industries within the cluster• Determine if growing or declining• Evaluate regional capacity• Identify potential leakages & opportunities • Determine potential strengthening strategies
Cluster Choices
• Advanced Materials• Agribusiness, Food Processing &
Technology• Apparel & Textiles• Arts, Entertainment, Recreation
& Visitor Industries• Biomedical/Biotechnical (Life
Sciences)• Business & Financial Services• Chemicals & Chemical Based
Products• Computer & Electronic Product
Manufacturing• Defense & Security• Education & Knowledge Creation
• Electrical Equipment, Appliance & Component Manufacturing
• Energy (Fossil & Renewable)• Fabricated Metal Product
Manufacturing• Forest & Wood Products• Glass & Ceramics• Information Technology &
Telecommunications• Machinery Manufacturing• Mining• Primary Metal Manufacturing• Printing & Publishing• Transportation & Logistics• Transportation Equipment
Manufacturing
Examining Clusters in the Region
What industries:• Seem worth exploring further? • Should the region avoid investing for the
future? • May be viable future regional industries? • Are declining but may be worth reviving?
Looking Ahead to Module Four
• Identify the economic leaks in the region• Explore basic avenues for strengthening
clusters• Consider specific strategies within each
avenue• Select potential directions for the region
to explore
Preparing for Module Four
• Draft summary of why industries selected (HQP – evidence based)
• Read the “C.A.R.E. for the Region” flow chart
Final Reflections
What topics did you find most helpful?
What did you find confusing?
What other data do you need?
Other items you want to mention?
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