maryland manufacturing strategic plan 1225712553575740 9
Post on 03-Apr-2018
213 Views
Preview:
TRANSCRIPT
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 1/60
February 23, 2006
Maryland Manufacturing in the
Global Digital Economy
Maryland Advisory Commission on Manufacturing Competitiveness
January 2007
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 2/60
© Copyright 2006 Archstone Consulting LLC
Confidential2
February 23, 2006
Table of Contents
Executive Summary
Purpose and Overview: Manufacturing in Maryland
Advanced Technology Manufacturing
Cluster Overview and Benefits
Cluster Identification, Development, and Support
Recommendations and Next Steps
Appendix
Current Situation of Maryland’s Manufacturing
− Competitive Advantages
− Challenges
Cluster Background
− Cluster Classification
− Cluster Policies and Pitfalls
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 3/60
© Copyright 2006 Archstone Consulting LLC
Confidential3
February 23, 2006
Executive Summary
Maryland manufacturing contributes significantly to the development of the knowledge
economy in the global digital arena
Maryland’s manufacturing sector is being transformed throughout the state; and although itappears to have experienced a steady decline…
The traditional manufacturing workforce in 2003 was 5.9% compared to more than 9% in early1990s
Gross State Product (GSP) related to traditional manufacturing was 7.2% in 2001 compared toapproximately 10% in early 1990s
…And despite a drop in the job growth and GSP, the manufacturing sector has actually
Steadily increased the total output since 1992
Created significant earnings and jobs in other sectors
And provided a strong foundation for managing the global supply chain
In addition, traditional metrics and classification schema do not fully capture the full breadth of
manufacturing and related capabilities in the state and across the globe
Research and analysis into the multiplier effect across the manufacturing sector in Maryland
revealed that the following industries have traditionally provided the most economic value tothe state
Food and beverage manufacturing Printing and related support activities Transportation equipment manufacturing Chemical Manufacturing Furniture and related product manufacturing
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 4/60
© Copyright 2006 Archstone Consulting LLC
Confidential4
February 23, 2006
Executive Summary (Continued)
To foster manufacturing growth, Maryland should continue to support targeted traditional
manufacturing clusters:
Traditional: Food and Beverage Manufacturing, Printing, Aerospace and Defense, Modern Agriculture, and Distribution and Warehousing
More importantly though, Maryland should emphasize a manufacturing transition that supports
the knowledge economy and the commercialization of Maryland’s core research competencies:
Strategic technology: Bio-technology, Information Technology, Nanotechnology, Miniaturization,Transportation Systems, Energy, Aerospace & Defense, Advanced Agriculture, and CraftManufacturing
The focus should be on growing those manufacturing capabilities that leverage Maryland’s
unique position in the realm of disruptive research competencies and process innovation
Maryland should follow a rigorous approach to promote the creation, development, and
maintenance of clusters—especially those that leverage the global supply chain for Maryland
manufacturing
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 5/60
February 23, 2006
Purpose
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 6/60
© Copyright 2006 Archstone Consulting LLC
Confidential6
February 23, 2006
Purpose
The State of Maryland:
Has proximity to major markets
Unparalleled access to state and national governments
A base of natural, technological, and transportation resources
A strong history of innovative manufacturing
This suggests manufacturing should have a favorable future in
Maryland
by leveraging its d isrup t ive research competenc ies and
manufactur ing proc ess innov ation to enhance i ts abi l ity to
manage the global sup ply ch ain
The purpose of this report is to provide a critical understanding of
where and how the state should focus its key resources
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 7/60
February 23, 2006
Overview:
Manufacturing in Maryland
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 8/60
© Copyright 2006 Archstone Consulting LLC
Confidential8
February 23, 2006
Manufacturing in Maryland has reached a critical inflection point
The strong role manufacturing has traditionally played in Maryland’s economy
has been declining since the early 1990s
Its contribution to the state’s Gross State Product (GSP) declined from 10% to7.2% in 2001
Employment dropped from 9.3% of Maryland’s workers to 5.9% in 2003
Though this decline appears to paint a dire picture, it is largely due to faster growth in
other sectors, process automation, and increased productivity…
…Maryland’s manufacturing output and growth rate have actually been expanding.
Manufacturing as % of Total Employment
0%
2%
4%
6%
8%10%
12%14%
16%
18%
1 9 9 0
1 9 9 1
1 9 9 2
1 9 9 3
1 9 9 4
1 9 9 5
1 9 9 6
1 9 9 7
1 9 9 8
1 9 9 9
2 0 0 0
2 0 0 1
2 0 0 2
2 0 0 3
Time
%MD
US
Manufacturing as % of GSP
0%
5%
10%
15%
20%
25%
1 9 7 7
1 9 7 8
1 9 7 9
1 9 8 0
1 9 8 1
1 9 8 2
1 9 8 3
1 9 8 4
1 9 8 5
1 9 8 6
1 9 8 7
1 9 8 8
1 9 8 9
1 9 9 0
1 9 9 1
1 9 9 2
1 9 9 3
1 9 9 4
1 9 9 5
1 9 9 6
1 9 9 7
1 9 9 8
1 9 9 9
2 0 0 0
2 0 0 1
Time
% o
f G S
US
MD
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 9/60
© Copyright 2006 Archstone Consulting LLC
Confidential9
February 23, 2006
Though Maryland’s manufacturers have seen steady growth,
not all types of manufacturers have grown at the same rate
Traditional manufacturing is well established and has served Maryland well in the past, but
has limited growth potential and does not capture new industries nor leverage many of Maryland’s strengths
Advanced technology manufacturing involves more risk but offers more growth potential
as it supports and aligns with industry throughout the global knowledge-based economy
Traditional Growth Rate Advanced Technologies Growth Rate
Tobacco 1.21% Aerospace and Defense 8.47%
Chemical manufacturing 2.04% Transportation systems 8.94%
Printing and related support activities 2.92% Energy 11.57%
Transportation equipment manufacturing 7.58% Information Technology 12.59%
Food and Beverage 7.75% Bio-technology 19.46%
Furniture and related product manufacturing 11.32% Nanotechnology 25.00%
Miniaturization 34.00%
In addition to offering strong rates of growth, research shows advanced
technology manufacturing provides an additional benefit to the State
economy through strong multiplier effects…
(Source: Stern School of Business, NYU, January 2005)
Manufacturing can be broken into the following groups:
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 10/60
© Copyright 2006 Archstone Consulting LLC
Confidential10
February 23, 2006
Advanced technology’s higher growth rates and stronger multiplier
effects can significantly increase economic activity in Maryland
Traditional Benefits to MD* Jobs** Growth
Tobacco $1.92 2.0 Low
Food and Beverage $1.92 2.0 Medium
Printing $1.94 1.1 Low
Transportation Systems $2.01 2.13 Medium
Information Technology $2.06 1.42 High
Biotechnology $1.96 N/A High
The State’s existing base of traditional manufacturers is relatively established and
slow growing
* Benefits to MD: each $1 activity in the industry generates X amount of activity in other industries.** Jobs: based on the direct-effect multiplier of employment, each job added in that industry adds an additional number of jobs in the area.
Advanced Tech. Benefits to MD* Jobs** Growth
Example Multiplier Effects
Supporting the development of higher-growth industries will allow Maryland to
increase its economic base without disturbing traditional manufacturing
businesses
Time
Emerging Industries
Traditional Industries
E c o n
o m i c
A c t i v i t y
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 11/60
© Copyright 2006 Archstone Consulting LLC
Confidential11
February 23, 2006
While Maryland has much to offer high-growth advanced
technology manufacturers, challenges remain to be addressed…
Strengths
• Proximity to the Federal Government provides
opportunities to enhance lobbying efforts
• Access to 92 mi l l ion consum er base within500 mile radius provides opportunities to beclose to wide range of customers
• Acc ess to the port of Balt imore, one of thebusiest ports in the US offers assembly
opportunities at the dock before exporting
• In tensity in R&D demonstrates commitment toinnovation and process improvement
• Vibrant econom y that has ample access toventure capital and the value generated by IPOs
• Highly educated workfo rce provides a skilledworkforce base
• Manufactur ing assistance programs focusedon enhancing manufacturing through taxincentives, sharing of technology and resources
Challenges
• Manufactur ing im age suffers an outdated
reputation and fails to communicate modernaspects of the manufacturing environment
• Signif icant drop in the manufactur ing
workforce does not bode well with themanufacturing businesses
• Gap in educat ion of the manufactur ing
workforce results in lacking in basic skills andhigher training costs
• In f rastructure issues such as traffic congestionand high cost of housing makes it difficult toattract employees
• Taxes and Gov ernment regulat ions lead to ahigh cost of doing business
• Low export dol lar per capita and lack of signif icant FDI indicates a lack of openness toglobalization and makes economies lesscompetitive
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 12/60
© Copyright 2006 Archstone Consulting LLC
Confidential12
February 23, 2006
By addressing the evolution of traditional manufacturing into world class competencies
and emphasizing the emerging knowledge economy, Maryland can improve
manufacturing’s image
Messaging should be directed at customers, service providers, and the perception of the
general public
The approach will necessitate aligning and connecting customers to resources, as well as
sharing results throughout the manufacturing industry and with the public
Focus on Public PerceptionIdentify Key Audiences
Develop successful approaches for changing perceptions
Develop advocates for industry’s public perception
Assess Impact
Communicate Results
Focus on CompaniesEstablish meaningful relationships with manufacturer
Connect Appropriate Solutions
Focus on Business Competitiveness and growth (Supply Chain)
Assess Impact
Communicate Results
Focus on Service ProvidersIdentify Key Service Providers
Coordinate Among Providers
Align Various Programs of value to the Industry
Make it a customer friendly system
Reduce costs through cooperation
Assess Impact
Communicate Results
To emphasize the role of the emerging knowledge economy and
traditional manufacturing, one must address the manufacturing image
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 13/60
© Copyright 2006 Archstone Consulting LLC
Confidential13
February 23, 2006
The Pappas Commission Report has identified near-term actions
Maryland should take to support the growth of advanced technology
The report’s recommendations are intended to:
1. Make Maryland more competitive in attracting and growing
technology companies
2. Increase the commercialization of research and development
(R&D) being created by the many government laboratories
and universities within Maryland’s borders
3. More effectively market Maryland as a center of valuable R&D
and as a home to many leading technology companies
The following pages provide specific recommendations to enhance Maryland’s ability
to attract high-growth manufacturers
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 14/60
© Copyright 2006 Archstone Consulting LLCConfidential
14February 23, 2006
To make Maryland more competitive in attracting and growing
technology companies…
1. Increase state pension funds investment in private equity
2. Raise investment by Maryland banks in Small Business Investment
Companies
3. Restore and increase funding for investment financing programs
4. Encourage foundations in Maryland to invest in technology companies
5. Use State tax incentives to affirm that Maryland welcomes and encouragesadvanced technology investments
a. Promote investment in advanced technology equipment and
construction materials
b. Align Maryland’s tax policy for capital gains on technology
investments to be similar to Federal tax policy
c. Increase research and development credits for businessesd. Provide investment tax credits for early stage investors
6. Survey CEOs on regulatory processes
7. Invest in the Business/Technology Case Management Program
…Maryland should:
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 15/60
© Copyright 2006 Archstone Consulting LLCConfidential
15February 23, 2006
To increase the commercialization of R&D being created by the
laboratories and universities within Maryland’s borders…
1. Establish a permanent State Chief Technology Officer
2. Increase utilization and effectiveness of Maryland Technology Councils
3. Encourage entrepreneurial initiatives and technology transfer
4. Support the State’s incubator network with capital and operating funds
for best practices
5. Allow State higher education institutions greater leeway under Statepersonnel and procurement rules for activities that are not directly
supported by State General Funds
6. Increase state funding for academic research
7. Encourage Maryland research consortia to compete for large federal
funding opportunities
8. Create alternative financing vehicles to create more laboratory space atMaryland’s Universities
9. Promote increased coordination at University and college technology
transfer offices
…Maryland should:
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 16/60
© Copyright 2006 Archstone Consulting LLCConfidential
16February 23, 2006
To more effectively market Maryland as a center of valuable R&D,
and as a home to many leading technology companies…
1. Increase state pension funds investment in private equity
2. Leverage the Office of the Governor to encourage and sustain
Maryland’s advanced technology enterprises
3. Develop a comprehensive marketing strategy to ―brand‖ Maryland as a
leading home for technology business and innovation
4. Create a central database of Maryland academic and federal laboratorytechnology resources
5. Pursue targeted international investment in Maryland
6. Create an Executive Job Corps
7. Create a Governor’s Science Advisory Board
To effectively capitalize on its manufacturing strengths and overcome existingweaknesses, Maryland must focus its limited resources on strategically supporting
key manufacturers.
The fol lowing sect ion prov ides a model for ident ify ing th ese opp ortuni t ies and
optimizing use of the State’s resources.
… Maryland should:
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 17/60
© Copyright 2006 Archstone Consulting LLCConfidential17
February 23, 2006
To this end, Maryland should marshal its manufacturing resources from
around the state and across the globe to reinforce this transformation
The approach outlined herein is intended to:
1. Make Maryland more competitive in attracting and growingmanufacturing companies that emphasize disruptive
innovation and research
2. Increase the emphasis that Maryland places on
manufacturers who provide creative advances in processes
3. Encourage manufacturers who aggressively engage
customers beyond the current customer set, particularly in
terms of leveraging the global supply chain
The following pages provide specific recommendations to enhance Maryland’s
ability to attract high-growth manufacturers in the new IT – ―Innovation and
Transformation‖
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 18/60
February 23, 2006
Cluster Overview and Benefits
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 19/60
© Copyright 2006 Archstone Consulting LLCConfidential19
February 23, 2006
Promoting industry clusters is an effective means for a state to
foster economic growth
Core companies form the basis for the cluster and the impetus for the value from the cluster
Supporting companies and institutions (e.g.,universities) provide crucial support to the core
and may include customers, suppliers andpartners to the core companies
Related businesses provide a more indirectsupport to the core by enabling supportivecompanies or providing services to the corecompanies
Impacted businesses are affected by thecluster but do not directly relate to theactivities of the cluster, such as restaurants or real estate support
A Cluster and its Levels of Interdependency
Clusters are geographically related networks of businesses that promote efficiency
with varying degrees of interdependency
Core
Suppor t ing
Related
Impacted
Cl t id i d t t b i hi h i
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 20/60
© Copyright 2006 Archstone Consulting LLCConfidential20
February 23, 2006
Clusters provide economic advantages to business, which in
turn drive benefits to the state
Higher Employment
Retention of existing companies and jobsthrough high switching costs
Creation of new jobs in growing industries
Creation of new jobs through spillover andmultiplier effects
Higher Incom es Increased demand for labor
Higher average skill level
Increased Tax Revenue
Higher personal incomes
Higher corporate incomes
Increased economic activity (sales tax,gasoline tax, telecom tax, per capita tax,property tax, etc.)
State BenefitsBusiness Benefits
More Eff ic ient Access to Inputs:
Raw materials
Industry-specific suppliers
Skilled labor
More Eff ic ient Processing :
Fast diffusion of knowledge, innovations,
benchmarking, etc.Economies of scope and scale
Industry-specific services (e.g., legal,finance)
More Effic ient Access to End Markets:
Existing customers
New customers
H i kill d l b f i f th k f t f th
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 21/60
© Copyright 2006 Archstone Consulting LLCConfidential21
February 23, 2006
Success Factors Value to Clusters Example
Skilled Labor Force Most important determinant for a cluster’s success
Knowledge of the industry supplemented by formaleducation drives the cluster and attracts newmembers
Specialized skills were vital to thedevelopment of the semiconductor in the
Silicon Valley
R&D Capability Availability and accessibility of research centersand expert individual researchers to providecutting-edge research and solve pressing problems
Specialized optics and imaging institutesand active professional associationsprovided channels for developing an opticsand imaging cluster in Rochester, NY
Proximity of
Suppliers
Proximity of suppliers assist in reduced inventorycarrying costs, innovation, and delivery time
Quick dissemination of information between cluster members and knowledge sharing reduces productdevelopment and R&D costs
Hosiery cluster in North Carolina alsoencompasses yarn, needle, dyestuff and
packaging materials suppliers Proximity assists the cluster in organizing
events for exchange of knowledge
Access to
Specialized
Services
Specialized services provide functions tailored toindustry and are integral to cluster’s success
The Industrial Technology Institute in Ann Arbor, MI was established to support themodernization of the auto industry
Entrepreneurial
Energy
Small firms rely on research institutions,associations or other special services in order to
remain competitive
Entrepreneurs highlight benefits of the cluster andwill attract new members
Entrepreneurial energy was one of the keyreasons for the success and expansion of
the Silicon Valley
Shared Vision and
Leadership
Increases competitiveness and profitability of itsmember firms
North Carolina, hosiery industrystrengthened the buying power againstmajor customers such as Wal-Mart bynegotiating collectively
Having a skilled labor force is one of the key factors for the
success of clusters
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 22/60
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 23/60
© Copyright 2006 Archstone Consulting LLCConfidential23
February 23, 2006
Clusters can be classified in six main groupings…
Competitive Clusters with scale, such as Hollywood, Silicon Valley, or Detroit
Strategic Clusters with high growth rates, such as biotech
Emerging Clusters which are small but vital to region’s interests
Potential Clusters with some core competency that might be developed, suchas environmental technology
Mature Clusters with low or no employment growth
StabilizingClusters which add diversity to economy, such as tourism or
business services
While there is no set criteria by which to classify clusters, there is value inassessing them to determine which have the potential to add the most value to
the state economy
Using the taxonomy discussed above, emerging clusters should receive first attention followed by strategic and potent ial , as these are most likely to promote manufacturing growth
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 24/60
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 25/60
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 26/60
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 27/60
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 28/60
The Operational Advantage TM Program has defined five major strategy
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 29/60
© Copyright 2006 Archstone Consulting LLCConfidential29
February 23, 2006
The Operational Advantage TM Program has defined five major strategy-
level improvement objectives focused on profitability and growth
Improve Quality
Develop New
Products &
Services
Improve
Customer
Service
Reduce Costs
Enter New
Markets
Strategic Objectives are tied to critical
business metrics, providing the initial
links in the accountability chain
Grow Revenue
Increase
Gross Margin
Reduce
Working
Capital
Increase
Operating
Earnings Improve
Return on
Assets
Profitability
Growth
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 30/60
Identifying and developing clusters requires a similar
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 31/60
© Copyright 2006 Archstone Consulting LLCConfidential31
February 23, 2006
Identifying and developing clusters requires a similar
systematic and disciplined approach
• Identify major companies in thearea
• Conduct survey
with selectcompanies
• Identify trendsacross major industries
• Develop selectioncriteria
- PromisingTechnology
-Economic Benefit
- Competitive Advantage
• Identify impact onstrategic technologymanufacturing sector
• Develop cluster strategy for eachof the clusters
• Prioritize clusters
• Identify gaps inthe clusters
• Allocateresources, fundsand efforts basedon prioritization
• Develop minimumrequirements toqualify for statesponsorship
• Conduct quantitativeand qualitativeevaluation
• Develop a committeeof government andprivate sector
• Take measuresto formalizecluster communications
• Organizecommittee for each cluster
ProfileManufacturing
Industry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster SpecificStrategy
EstablishPolicy for State
SponsorshipFormalize
Cluster Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
PlanDevelop
CommunicationPlan
• Carefully plan
and manageprocessesdesigned to
diversify aculture
• Develop detailedexecution plan
• Attributes of theexecution plan
-Project managementteam
- Project timelines
- Communication plans
- Legal documents
• Develop CommunicationPlan
- Improvemanufacturing image
-Facilitatemanufacturingeducation initiative
- Facilitate risk takingfor entrepreneurs
Maryland has ample data available to identify traditional and
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 32/60
© Copyright 2006 Archstone Consulting LLCConfidential32
February 23, 2006
Maryland has ample data available to identify traditional and
emerging advanced technology manufacturing clusters
Maryland’s manufacturing sector has experienced steady decline
Workforce in 2003 was 5.9% compared to more than 9% in early 1990s
Gross State Product (GSP) was 7.2% in 2001 compared to approximately 10% in early1990s
Despite a drop in the job growth and GSP, the manufacturing sector has
Steadily increased the total output since 1992
Created significant earnings and jobs in other sectors
Research and analysis into the multiplier effect across the manufacturing sector inMaryland revealed that the following industries provided the most economic value to the
state*
Food, beverage and tobacco manufacturing
Printing and related support activities
Transportation equipment manufacturing
Chemical Manufacturing Furniture and related product manufacturing
However, advanced technology manufacturing offers significant opportunity for
Maryland to invest in the future
* The multiplier effect accounts for the total impact of the manufacturing sector on Maryland’s output, employment and earnin gs, indicating that it is larger than thedirect manufacturing measures indicates
Profile Manufacturing Industry
ProfileManufacturing
Industry
ClassifyManufacturingIndustry into
Clusters
Develop aCluster SpecificStrategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
RecruitCompanies to
Fill Gaps inCluster
Develop anExecution
Plan
DevelopCommunication
Plan
ProfileManufacturing
Industry
ClassifyManufacturingIndustry into
Clusters
Develop aCluster SpecificStrategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
RecruitCompanies to
Fill Gaps inCluster
Develop anExecution
Plan
DevelopCommunication
Plan
Promising technology and economic benefits are key criteria
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 33/60
© Copyright 2006 Archstone Consulting LLCConfidential33
February 23, 2006
Promising technology and economic benefits are key criteria
for developing clusters
Qualitative Criteria
• Promising Technology
• Environmentally Friendly
• Legal Requirements
• Resources Requirements
• Location and Area Requirements
Quantitative Criteria
• Economic Value to the State
• Size of the industry
• Growth Potential
• Funding Requirements
• Tax incentives
• Impact on Other Industries
• Tax Revenues
Institutionalizing an unbiased evaluation process for
developing clusters depends on both qualitative and
quantitative criteria
Classify Mfg Industry into Clusters
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 34/60
Traditional manufacturing industries add value to other sectors in
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 35/60
© Copyright 2006 Archstone Consulting LLCConfidential35
February 23, 2006
Traditional manufacturing industries add value to other sectors in
areas such as product development, environment and transportationClassify Mfg Industry into Clusters
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Food and
Beverage
Manufacturing
Printing Aerospace and
Defense
Modern
Agriculture
Distribution and
Warehouse
Bio-Technology Environmental Friendly,Product Development
Product Development
Information Technology Print ManagementSoftware
Miniaturization, ProductDevelopment
Nanotechnology Genetic ModificationsPrinting Material
DevelopmentMiniaturization, Product
Development, R&DGenetic Modifications
Miniaturization RFID, ProductDevelopment
Miniaturization, ProductDevelopment
Bio-intensive GrowthRFID, ProductDevelopment
Transportation System Transportation SolutionDevelopment
Transportation SolutionDevelopment
Intelligent TransportationSystem Solutions
Development, ProductDevelopment
Transportation SolutionDevelopment
Energy (hydrogen, fuel
cell, alternative energy) Environmental Friendly Environmental Friendly Environmental Friendly
Aerospace and Defense Next generation sensors
for process control,Defense, Security
Advanced Agriculture Genetic Modifications,Environmental Friendly
Product Development,Genetic Modifications,Environmental Friendly
Craft Manufacturing
Industries Environmental Friendly Transportation
Traditional Manufacturing Industries
E m
e r g i n g M a n u f a c t u r i n g I n d u
s t r i e s
Cross cluster themes that support multiple industries will also enhance
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 36/60
© Copyright 2006 Archstone Consulting LLCConfidential36
February 23, 2006
Security Defense Miniaturization Environmental
Friendly
Next
Generation
Sensors for Process
Control
Protecting
IntellectualProperty
Transportation
ProductDevelopment
(CommercializingTechnology)
Traditional
Manufacturing
Industries
Food and BeverageManufacturing X X X
Printing X X X
Aerospace X X X X X X X
Modern Agriculture X X X X
Distribution andWarehouse X X
Strategictechnology
Manufacturing
Industries
Bio-Technology X X X X X
IT X X X X
Nanotechnology X X X X
Miniaturization
(actuators withcomputing technology),
RFID
X X X X
Transportation X X X X Energy (hydrogen, fuel
cell, alternative energy) X X
Aerospace X X X X X
Advanced Agriculture X X X X
Craft Manufacturing X X X
Cross cluster themes that support multiple industries will also enhance
Maryland’s strategic ability to focus critical manufacturing resources
Cross Cluster
Themes Industries
Classify Mfg Industry into Clusters
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Maryland should develop a strategy specific to each of the
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 37/60
© Copyright 2006 Archstone Consulting LLCConfidential37
February 23, 2006
Maryland should develop a strategy specific to each of the
target clusters
3 Allocate Resources1 Prioritize Clusters 2 Identify Gaps
Qualitative Criteria
Quantitative Criteria
Tier 1
Tier 2
Tier 3
Prioritization
Core
Suppor t ing
Related
Impacted
Core
Suppor t ing
Related
Impacted
Requiredbusinesses/institutions
Marketing R&D
Education Incentives
Develop Cluster Specific Strategy
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
The state should then determine the policies that will best
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 38/60
© Copyright 2006 Archstone Consulting LLCConfidential38
February 23, 2006
The state should then determine the policies that will best
foster the targeted clusters…
Increase Cluster
Network ing and
Learning
Reestablish or recognize cluster associations and alliances
Facilitate external connections
Encourage inter-cluster communications
Eff iciently Organize
And Deliver
Services
Aggregate and publish information by cluster
Form cross-agency quick response teams
State Policy Levers*,**
Make Targeted
Investments
Invest in cluster R&D
Establish cluster-specific technology centers or parks
Support cluster-based entrepreneurial activity
Improve Workforc e Develop a more skilled and specialized labor force
Establish cluster skills centers
Qualify people for employment
* From “A Governor’s Guide to Cluster -Based Economic Development” ** These recommendations should be planned and executed conjunction with the recommendations of the Pappas Commission
Develop Policy and Communications
Profile
ManufacturingIndustry
ClassifyManufacturing
Industry intoClusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Profile
ManufacturingIndustry
ClassifyManufacturing
Industry intoClusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
...formalize cluster communication targeted and tailored for
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 39/60
© Copyright 2006 Archstone Consulting LLCConfidential39
February 23, 2006
...formalize cluster communication targeted and tailored for
specific constituencies…
educationbusiness
Education initiatives
University outreach
Trade shows
Business journals
Newsletters
Trade associations
Mass mediaadvertising
Community out-reach
Develop Policy and Communications
Profile
ManufacturingIndustry
ClassifyManufacturing
Industry intoClusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Profile
ManufacturingIndustry
ClassifyManufacturing
Industry intoClusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
…recruit companies by approaching a broad set and then
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 40/60
© Copyright 2006 Archstone Consulting LLCConfidential40
February 23, 2006
…recruit companies by approaching a broad set and then
progressively narrowing the field until the best remain…
Negotiation
Opportunity
Development Initial
Communication Opportunity
Assessment Follow-up
Communication
Proposal
Presentation PotentialCompanies
PotentialCompanies
Cluster Company
Recruit Companies to Fill Gaps
Profile
ManufacturingIndustry
ClassifyManufacturing
Industry intoClusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Profile
ManufacturingIndustry
ClassifyManufacturing
Industry intoClusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
…develop a rigorous implementation plan to execute the
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 41/60
© Copyright 2006 Archstone Consulting LLCConfidential41
February 23, 2006
p g p p
strategy…
Activities
Project Milestones
Week1 2 3 4 5 6 7 8 9 10 11 …
Init iat ive Kick -Off
Tier 1 Plan
• Define project management team
• Finalize approach
• Craft communication plans
• Integrate cluster companies
• Draft legal documents
Tier 1 Plan
• Define project management team
• Finalize approach
• Craft communication plans
• Integrate cluster companies
• Draft legal documents
Tier 1 Plan
• Define project management team
• Finalize approach
• Craft communication plans
• Integrate cluster companies• Draft legal documents
Develop Execution and Communication Plan
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
…and implement a comprehensive communication strategy that
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 42/60
© Copyright 2006 Archstone Consulting LLCConfidential42
February 23, 2006
p p gy
builds on success to create more and better clusters
PublicizeWins
ShareLearnings
Improve
Image
Attract MoreCompanies
DocumentSuccesses
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
Profile
ManufacturingIndustry
ClassifyManufacturingIndustry into
Clusters
Develop a
Cluster Specific
Strategy
EstablishPolicy for State
Sponsorship
FormalizeCluster
Communication
Recruit
Companies toFill Gaps in
Cluster
Develop anExecution
Plan
DevelopCommunication
Plan
R d ti
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 43/60
© Copyright 2006 Archstone Consulting LLCConfidential43
February 23, 2006
Recommendations
Maryland should pursue multiple activities to promote manufacturing:
1. Follow a rigorous approach to identify, create, promote, develop, and
maintain new and existing manufacturing clusters
2. Develop and promote a pro-manufacturing image for Maryland
3. More effectively market Maryland as a center of valuable R&D, and as
a home to many leading technology companies
4. Purse policy measures to attract technology companies to Maryland
5. Support the operational improvement of existing tradition
manufacturing capabilities within the state
If Maryland follows the above recommendations it will be well positioned to thrive
well into the future
Recommendations
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 44/60
© Copyright 2006 Archstone Consulting LLC
Confidential
44February 23, 2006
1. Establish a permanent State Chief Manufacturing Officer
2. Increase utilization and effectiveness of Maryland Manufacturing and Business
development Councils
3. Encourage entrepreneurial initiatives and technology transfer, especially for those
Maryland companies who can leverage manufacturing and the global supply chain
4. Support the State’s targeted manufacturing clusters with capital and operating
funds for best practices and operational excellence
5. Allow State higher education institutions greater leeway under State personnel and
procurement rules for activities that are not directly supported by State General
Funds
6. Increase state funding for academic research related to the broader view of the
Extended Enterprise represented by manufacturing
7. Encourage Maryland research consortia to compete for large federal funding
opportunities supporting the emphasis on Advanced Technology Manufacturing
8. Create alternative financing vehicles to create more laboratory space for applied
research and commercialization opportunities at Maryland’s Universities
9. Promote increased coordination at University and college technology transfer,
applied research, and advanced manufacturing offices
To increase the manufacturing commercialization of R&D being created by the laboratories and
universities within its borders, Maryland should:
Recommendations
Next Steps
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 45/60
© Copyright 2006 Archstone Consulting LLC
Confidential
45February 23, 2006
Next Steps
Apply lessons learned from Maryland biotechnology and education (Career Clusters) efforts to other
traditional and strategic technology clusters
Build a commission-based role to coordinate cluster activities across the state’s multiple constituencies
(including business, academia, government, and advisory services)
Further develop cluster concentrations to determine ways to marshal resources and develop
implementation plans for proposed manufacturing clusters
Pursue ways to consolidate/coordinate multiple constituencies interested in supporting manufacturing
across the state
Use academia’s unique position to optimize competing government (federal and state) and business
interests and gain consensus
Identify the most effective ―levers‖ to pull in support of manufacturing clusters
Institutionalize the Maryland Manufacturing Strategy Process to build on the momentum generated by
coordinating activities across business, government, academia, and industry advisors
Assess Progress
Continually Revaluate Initiatives and Clusters
Continue to emphasize those efforts to support the relationship between disruptive research,
innovation, and manufacturing competencies that lead to new products, processes, customers andmarkets.
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 46/60
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 47/60
February 23, 2006
Current Situation
The manufacturing sector has steadily increased output as well
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 48/60
© Copyright 2006 Archstone Consulting LLC
Confidential
48February 23, 2006
as assisted other sectors in increasing earnings and job growth
Maryland’s manufacturing sector has experienced steady decline in the last decade
Workforce in 2003 was 5.9% compared to more than 9% in early 1990s
Gross State Product (GSP) was 7.2% in 2001 compared to approximately 10% in early 1990s
Despite a drop in the job growth and GSP, the manufacturing sector has
Steadily increased the total output since 1992
Created significant earnings and jobs in other sectors
Research and analysis into the multiplier effect across the manufacturing sector in Maryland
revealed that the following industries provided the most economic value to the state Food and beverage manufacturing
Printing and related support activities
Transportation equipment manufacturing
Chemical Manufacturing
Furniture and related product manufacturing
Proximity to the federal government, access to 92 million consumers,
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 49/60
© Copyright 2006 Archstone Consulting LLC
Confidential
49February 23, 2006
Category MetricUS
RankMaryland Current Situation
CurrentManufacturing
Sector
Total Mfg Employment
Mfg Output/GSP
43
46
148K jobs in the manufacturing sector represents only 5.9% of Maryland’sworkforce
Manufacturing sector is suffering from a poor image among the students
Quality of the
Work Force
Workforce Education
Manufacturing Education
1
32
Despite the highest ranking in overalleducation, Maryland’s manufacturingworkforce lacks basic skills
16.5% workforce represented by unions
Taxes,
Government and
Policy
Budget Deficit/Stability
Taxes
AAABond
43
Despite having AAA Bond rating and a lowbudget deficit, environmental andgovernment regulations coupled with hightaxes were hurting the businesses
Proximity to the Federal Government is a bigplus
Infrastructure Rental Cost for two bedroomapartment
Travel Time to Work
Household with internet access
39
49
6
Second longest commute time andcomparatively high cost of living don’t favor
well with the businessesMaryland has access to 92 millionconsumers within 500 mile radius and one of the busiest ports in the US
58% of households have access to theinternet
a vibrant economy and fiscal stability entices businesses…
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 50/60
Leveraging manufacturing strengths and working on overcoming
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 51/60
© Copyright 2006 Archstone Consulting LLC
Confidential
51February 23, 2006
major challenges will be the key to attracting companies
Strengths
• Proximity to the Federal Government providesopportunities to enhance lobbying efforts
• Access to 92 mi l l ion consum er base within500 mile radius provides opportunities to beclose to wide range of customer
• Acc ess to the port of Balt imore, one of thebusiest ports in the US offers assembly
opportunities at the dock before exporting
• In tensity in R&D demonstrates commitment toinnovation and process improvement
• Vibrant econom y that has ample access toventure capital and the value generated by IPOs
• Highly educated workfo rce provides a skilledworkforce base
• Manufactur ing assistance programs focusedon enhancing manufacturing through taxincentives, sharing of technology and resources
Challenges
• Manufactur ing im age suffers an outdatedreputation and fails to communicate modern
aspects of the manufacturing environment
• Signif icant drop in the manufactur ing
workforce does not bode well with themanufacturing businesses
• Gap in educat ion of the manufactur ing
workforce results in lacking in basic skills andhigher training costs
• In f rastructure issues such as traffic congestionand high cost of housing makes it difficult toattract employees
• Taxes and Gov ernment regulat ions lead to a
high cost of doing business
• Low export dol lar per capita and lack of signif icant FDI indicates a lack of openness toglobalization and makes economiesless competitive
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 52/60
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 53/60
Gain Consensus
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 54/60
© Copyright 2006 Archstone Consulting LLC
Confidential
54 February 23, 2006
Gain Consensus
Academia is uniquely positioned to optimize competing government
(federal and state) and business interests and gain consensus.
Business
Interests
Government
Interests
• Low taxes• Skilled employees• Low regulation• etc.
• Tax revenue• Full employment• Environment• etc.
Arizona, Connecticut and Minnesota have successfully
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 55/60
© Copyright 2006 Archstone Consulting LLC
Confidential
55 February 23, 2006
A few of the states have successfully implemented cluster policy include
Ar izona – The Greater Tucson Economic Council has adopted cluster policies as “framework for the
overall direction of the economic development activities and allocation of limited resources
Connect icut – The state has embarked on a cluster-based strategy built around the idea that
nurturing the state’s key industries improves the competitiveness of businesses within these industries
Minnesota – The University of Minnesota, in association with state and local policy programs, are
examining rural knowledge clusters as a model for innovative, dynamic rural economies
Maryland has successfully implemented cluster policy for secondary and post-
secondary education
Additional examples of cluster policies implemented by other states are listed below
State Organization Description of Activities
Kentucky Center for Urban and Regional Studies at UNC,
Chapel Hill
Used a sophisticated benchmarking technique to identify
clusters in Kentucky.
Maine Maine Science and Technology Foundation Commissioned a report to promote economic development
through the application of science and technology. The report
outlined eight clusters that exist in the New England area.New York Empire State Development Identified 12 industry clusters in the state to help guide
development strategies.
North Dakota Greater North Dakota Association The association's New Economy Initiative uses a cluster
approach to build relationships between businesses in each
cluster area.
Oregon Oregon Department of Community and Economic
Development
Developed cluster groups with firms and associations in key
productive industries between 1990 and 1996.
Wisconsin Wisconsin Department of Commerce The Department of Commerce has made the cluster approach a
focus of its economic development strategy.
implemented cluster-based policies
One of the key goals of cluster-based policies is to direct funds to
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 56/60
© Copyright 2006 Archstone Consulting LLC
Confidential
56 February 23, 2006
the most productive industry channels
Cluster-based economic development policies contain important ―spillover‖
effects that extend their influence beyond the specific business that are targeted
for support
Cluster-based policies reinforce two linkages that help to perpetuate a skilled
and educated workforce
Providing residents with more jobs in growing industries
Forging a healthy collaboration between industry and educational institutions
Cluster policies improve the scope of community involvement in the corporate
sector
Coordination efforts between communities and cluster leaders can lead to development of childcare services, transportation improvements, and home ownership programs
Industry clusters make it easier and more effective for town planning commissions to targetpotential businesses seeking to locate in the area
Public policy makers should know when to pursue them and when
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 57/60
© Copyright 2006 Archstone Consulting LLC
Confidential
57 February 23, 2006
to push them aside for cluster-based policies to be successful
Policy makers should avoid following pitfalls while developing cluster-based
policies:
Cluster-based po l ic ies are not the same as ind ustr ia l pol ic ies – cluster-based
policy initiatives must promote the competitive advantages of an interlinked groupof related industries
Cluster creat ion is best lef t to the m arket – policy makers should refrain fromthe temptation to create new clusters and leave cluster formation to the marketmechanism
Let research , no t pol i t ics , driv e the faci l i tat ion of clu sters – policy makersmust not bow to the pressures of political lobbyists pulling for certain industries,unless it is supported by specific research indicating tangible benefits
Cluster Pitfalls
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 58/60
© Copyright 2006 Archstone Consulting LLC
Confidential
58 February 23, 2006
Cluster Pitfalls
Cluster-based policies are not the same as industrial policies
Cluster creation is best left to markets
Let research, not politics, drive the facilitation of clusters
Having a skilled labor force is one of the key factors for the
f l t
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 59/60
© Copyright 2006 Archstone Consulting LLC
Confidential
59 February 23, 2006
Success Factors Value to Clusters Example
Skilled Labor Force Most important determinant for a cluster’s success
Knowledge of the industry supplemented byformal education drives the cluster and attractsnew members
Specialized skills were vital to the
development of the semiconductor in theSilicon Valley
R&D Capability Availability and accessibility of research centersand expert individual researchers to providecutting-edge research and solve pressingproblems
Specialized optics and imaging institutes andactive professional associations providedchannels for developing an optics andimaging cluster in Rochester, N.Y.
Proximity of Suppliers Proximity of suppliers assist in reduced inventory
carrying costs, innovation, and delivery timeQuick dissemination of information betweencluster members and knowledge sharing reducesproduct development and R&D costs
Hosiery cluster in North Carolina also
encompasses yarn, needle, dyestuff andpackaging materials suppliers
Proximity assists the cluster in organizingevents for exchange of knowledge
Access to Specialized
Services
Specialized services provide functions tailored toindustry and are integral to cluster’s success
The Industrial Technology Institute in Ann Arbor, Mich., was established to support themodernization of the auto industry
Entrepreneurial Energy Small firms rely on research institutions,associations or other special services in order toremain competitive
Entrepreneurs highlight benefits of the cluster andwill attract new members
Entrepreneurial energy was one of the keyreasons for the success and expansion of theSilicon Valley
Shared Vision and
Leadership
Increases competitiveness and profitability of itsmember firms
North Carolina hosiery industry strengthenedthe buying power against major customerssuch as Wal-Mart by negotiating collectively
success of clusters
Focus communication plans to improve the image of manufacturing
i d t d f ilit t f t i d ti i iti ti
7/28/2019 Maryland Manufacturing Strategic Plan 1225712553575740 9
http://slidepdf.com/reader/full/maryland-manufacturing-strategic-plan-1225712553575740-9 60/60
industry and facilitate manufacturing education initiative
Universities
Trade Schools
Primary
Schools
Management Workforce
Coordination &Feedback
Training &Education
• Literacy• Basic PC Skills• Skilled Trades
• Managerial Skills• Engineering Abilities
Educating the workforce and managers will be key to the success of the
cluster strategy.
Engineering Business
top related