Recommendation
Support the region's traded clusters

Clusters occur naturally in the economy as related businesses and institutions enhance productivity through advantages of proximity and interconnectivity. To build their own productivity and resilience, many regions have begun forming cluster initiatives that more deliberately bring together resources to tackle common concerns. Formal initiatives, directed by the needs and interests of the area’s businesses, can provide comprehensive support around the accelerated growth of a specific cluster. Such initiatives include the Chicago Metro Metals Consortium and the Chicagoland Food and Beverage Network. Cluster support can take many forms, such as enhancing educational and training offerings or addressing specialized infrastructure needs. As a result, strategies depend on the unique contexts in which industries operate at regional and sub-regional levels. Private sector leaders -- in partnership with public officials -- have a critical role to play in guiding policy and planning for cluster-oriented economic development. For traded clusters in particular, initiatives should create opportunities for businesses to expand into markets nationally and internationally. CMAP, CRGC, and other relevant entities should regularly convene public and private sector entities to develop systemic support for cluster initiatives.

Conduct additional analysis of the region’s globally traded clusters

Successful economic development depends on improving the region’s competitiveness as a place to do business by increasing the productivity of regional economic assets, including existing firms and workers. Clusters provide a framework for better organizing the many public policies and investments already directed toward economic opportunity and growth. Doing so requires a more detailed understanding of specialized clusters present in northeastern Illinois, and of their unique, often-multijurisdictional needs. Building on momentum from the private sector, this research should aim to serve as a basis for convening industry leadership and identifying initial opportunities for high-impact, cross-cutting collaboration.

Pursue inclusive growth by prioritizing clusters that support regional economic opportunity

Inclusive economic growth can improve wages and living standards for the average resident and achieve high participation in a skilled workforce. Yet proponents of cluster-oriented economic development and inclusive growth too often operate in parallel without acknowledging their joint interests. Due to their economic benefits, cluster initiatives can generate economic activity that improves outcomes in underserved or lower income areas, and an emphasis on decreasing inequality could further boost productivity and competitiveness. Likewise, a regional approach to prioritizing cluster support can decrease inequality by raising the demand for labor and increase the effects of policies aimed to spread opportunity. Economic development organizations and partners should take an active role in cluster initiatives, in part to ensure they implement strategies to support inclusive growth. CMAP and partners can make initial efforts to identify and prioritize support to clusters that promote equitable growth in different and diverse parts of the region.

Analyze the planning needs and opportunities of local clusters

Cluster-oriented economic development tends to focus on traded clusters because they serve national and global markets and have significantly higher levels of productivity, wages, and patenting. Some research has also begun to explore the role and needs of industry clusters that serve local businesses and residents. These local clusters provide the economic foundations that businesses in traded clusters rely on to operate. For example, such clusters provide most local healthcare services, education and training, utilities, industrial and vehicle repair services, and local commercial and personal services. These clusters tend to appear in metropolitan areas across the U.S. at concentration levels proportionate to a region’s population and the traded businesses they service.

Both traded and local clusters have discrete functions in the regional economy and distinct infrastructure, land use, and employment needs. Local business-to-business clusters, such as those selling industrial products and commercial services, depend on a transportation system that moves goods efficiently within the region. They also tend to boast higher levels of minority ownership and are well-represented in underserved or lower income areas. Additional cluster-oriented strategies -- such as opening up institutional and corporate procurement chains to a more diverse set of suppliers -- can reflect the broad set of opportunities within local clusters. Further analysis of the region's local industry clusters will help formulate plans to address their challenges and opportunities.

Analyze and plan for the human capital needs of clusters

Many of metropolitan Chicago’s clusters first emerged based on location advantages unique to the region like its central location in the agricultural and industrial Midwest, strong access to a variety of resources, and dense freight infrastructure. These remain some of the region’s strongest competitive advantages. Today, a skilled and adaptable workforce is increasingly important to sustaining and growing the region’s traded clusters. Their continued competitiveness will require coordinated, demand-driven approaches to education and workforce investments. Partnerships between the private and public sectors can help align training programs and hiring practices to ensure clusters have the talent to meet industry shifts.

Human capital is critical to improving the productivity and growth of each cluster, as well as the region as a whole. The value of deep talent pools extend beyond individual firms, as the exchange of ideas within a cluster contributes to higher levels of innovation and productivity. To capitalize fully on the region’s human capital, public and private institutions should continue to foster specialized networks that lead to knowledge spillovers and increase opportunities for innovation. These efforts will require employers to form stronger partnerships with the region’s universities and other institutions of higher education and research.