Every area of the nation is known for industrial specialties. These areas are easily recognized and new companies in those industries tend to gravitate to those geographies. Silicon Valley is known for information technology, Pennsylvania and New Jersey are home to pharmaceuticals and Boston is well known for biotechnology.
One of the newest clusters is clean tech. Minnesota is quickly becoming the center of a clean tech cluster. Southern Minnesota is one of the leading wind energy producers in the nation and a host of Fortune 500 companies that are headquarted in Minnesota are implementing clean tech initiatives.
In 1890, Alfred Marshall noted that, “Geographical concentrations of specialized industrial activities, once established, reinforce themselves by attracting complementary activities at various stages in the supply chain. In addition,” he adds, “they create a pool of specialized labor which aid the spillover of know-how between firms.”
Over a century later, the same geographical concentrations exist. Michael Porter of the Harvard Business Review stated that “Today’s economic map of the world is dominated by…clusters: critical masses – in one place – of unusual competitive success in particular fields.”
By concentrating these specialties, entire industries can increase productivity, drive innovation and stimulate new business creation.
As clean tech becomes more relevant in today’s economy, look for these clean tech clusters to emerge in other parts of the country. When they do emerge, clean tech innovation and optimization will propel the industry faster than if there were no clusters at all.
Alfred A. Marcus is the Honeywell/Edson W. Spencer Chair in Strategic Management at the Technological Leadership Institute and Professor of Strategic Management and Organization at the Carlson School of Management at the University of Minnesota.
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