1. Focusing on Regional Competitive Advantage Module Five

2. Reflecting on the Previous Session What did you find most useful or valuable? What progress have you made since then? Any questions or clarification needed?

3. Overview of Module Five Investigate the elements that contribute to regional economic advantage Explore regional data that may help identify regional clusters Select clusters for further exploration

4. EXPLORING COMPETITIVE ADVANTAGE

5. Competitive Advantage Business shapes the economic value of a region, but places can help shape, nourish, and sustain local enterprises and industry.

6. 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)

7. 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

8. Factor Conditions Infrastructure Resources & Materials Skilled Workforce Demand Conditions Factor Conditions Firm Strategy, Structure, and Rivalry Related and Supporting Industry Competitive Advantage Elements

9. Who are the region’s workers?  Skilled/unskilled  Labor force participation rate  Unemployment rate  Occupation mix  Experience/age Factor Conditions: Workforce

10. Identifying Skills in the Region / INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE HERE

11. Region’s portfolio of businesses Entrepreneurship activity and support Mix of industries Firm Strategy, Rivalry, Composition Demand Conditions Factor Conditions Firm Strategy, Structure, and Rivalry Related and Supporting Industry Competitive Advantage Elements

12. Business and Industry INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE HERE

13. 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

14. 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 Growers/ Vineyards Wineries/ Processing Facilities Wineries/ Processing Facilities State Government Agencies California Agricultural Cluster Tourism Cluster Tourism Cluster Food Cluster Food Cluster Source: California Department of Food and Agriculture

15. OVERVIEW OF INDUSTRY CLUSTERS

16. Industry Clusters Defined Groups of similar and related firms in a defined geographic area that share common markets, technologies, worker skill needs, and that are often linked by buyer-seller relationships

17. 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

18. Identifying Industry Clusters Views firms and industries as interdependent, not isolated Identifies value chains Discovers collections of businesses producing similar outputs

19. Overview of Clusters in Your Region

20. Understanding Changes Moving Up or Down Change in Percentage of Jobs in Industry over Time

21. Understanding Changes Moving Left or Right Relative Concentration of Industry in the Region Compared to the Nation

22. Understanding Changes Location Quotient: Measure of Concentration of Industry Percent Change in Jobs over Time

23. Regional Clusters: 2002-2007 INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE HERE

24. Regional Clusters: 2006-2011 INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE HERE

25. Behind the Bubble Chart Location Quotient more than 1 = Concentration INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE – Move line to divide 1+ LQ

26. Behind the Bubble Chart Industries with Greatest Percentage Growth INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE – Adjust red circles to top 5

27. Examining the Leaky Bucket The Regional Economy Goods or Services Purchased outside the Region $

28. Looking at Regional Expenditures INSERT YOUR REGION’S CHART LIKE THIS EXAMPLE

29. 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

30. 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

31. 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?

32. Homework for Next Time Identify the potential clusters for the region Read the “C.A.R.E. for the Region” flow chart to prepare for Module Six

33. 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?

34. Looking Ahead to Module Six Identify the economic leaks in the region Explore basic avenues for strengthening clusters Provide an overview of some specific strategies within each avenue Select potential directions for the region to explore