tci 2016 a cluster analysis of the great lakes region in north america

Titel presentatie[Naam, organisatienaam]

Working Day - Track: Modern cluster policyClusters strengthening macro-regional collaboration

Saad Usmani, Chris Mack

A Cluster Analysis of the Great Lakes Region in North America

A Cluster Analysis of the Great Lakes Region in North America

TCI Conference 2016, EindhovenNovember 10, 2016

Mark Fisher, President & CEO

Presented by:

Saad Usmani, Policy AnalystChris Mack, Policy Analyst

Great Lakes–St. Lawrence RegionHighlights

Prosperity in the Region

GLR Weighted Productivity:

$55,724

Growth: 1.56%Canada & US Weighted Productivity:

$55,482

Growth: 1.28% Mixed performance

Large heterogeneity across individual jurisdictions

Policy making at the State/Province level matters!

Economic interaction within the region

Minneso

taIllin

ois

New Yo

rk

Pennsy

lvania

Wiscon

sin

Indian

aOhio

Michiga

n0%5%

10%15%20%25%30%35%40%

% of total exports to Ontario and Québec

Heavy concentration of trade and value chain linkages between jurisdictions

Cross-border effects of economic shocks, barriers to trade, infrastructure, environmental issues, etc. are prominent

When one region does well, the other regions benefit

Understanding the region through a traded Clusters lens

Focus on traded clusters

Clusters performanceRelative specialization

Change in market share, 2000 - 2013

Absolute employment in 2013Net gain in job creation

Net loss in job creation

Source: Clusters and Regional Economies: Implications for the Great Lakes-St. Lawrence Region (Christian Ketels)

Clusters profileProminent across the region Prominent in larger metropolitan

areas


Manufacturing in focus Decline in cluster performance particularly pronounced for

clusters involved in manufacturing activities

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 201340

50

60

70

80

90

100

110

120

130

140

Gross Value Added in Manufacturing

US and Canada average

Great Lakes

Macro-Regional Economic Collaboration

? ?Success on two fronts

Water as a unifying factor Stewardship and clean-up of the Great Lakes and St. Lawrence River is a

longstanding and crucial unifying factor International Joint Commission; Great Lakes Fishery Commission; Great Lakes Water

Quality Agreement Policymakers have typically not viewed the region as a shared economic zone

Notable exceptions: Great Lakes-St. Lawrence Deep Waterway Treaty of 1932; Auto Pact of 1965

The Conference of Great Lakes and St. Lawrence Governors and Premiers (formerly: Council of Great Lakes Governors) in its early years focused on coordinating regional water policy

Branched off into: Opening trade offices Great Lakes-St. Lawrence Maritime Strategy (2015) Cluster analysis


Economic linkages largely defined and driven by industry Auto manufacturing

By-product is policy fragmentation at many levels Investment attraction, infrastructure renewal, market regulation, worker

mobility, border security, etc. Today’s climate of borderless trade, capital and mobility, forcing a

renewed government-business conversation around harnessing the region’s assets.

Cluster formation and connectivity offer a distinct opportunity

Auto cluster in perspective

Clusters and Regional Economies: Implications for the Great Lakes-St. Lawrence Region (Christian Ketels)



History of auto collaboration The Canada-US Auto Pact signed in 1965 Bi-national rescue packages post 2008-09 recession

Integrated supply chain and geographic concentration of firms Heavy losses over past decade

Market share drop from 64% to 58% over last 10 years Net loss of 220,000 jobs

Recent developments Memorandum Of Understanding between Michigan and Ontario to promote

innovation and regional competitiveness in the auto industry Competing on unique competitive advantages

Low carbon manufacturing industries Renewable bio-based materials

Regional Assets Third largest economy in the world if it were a country

Accounts for almost 25% of total US merchandise exports and more than 60% of Canadian shipments

Large industrial base along with a growing services sector Roughly 50% of Canadian manufacturing and 25% of U.S. manufacturing

Approximately 30% of the combined Canadian and US workforce 19 of the top 100 universities in the world are in the Region

Produced 47% of university graduates in both countries Represents nearly 24.1% and 72.1% of R&D funding in the US and

Canada Generated 26.2% and 68% of patents in the U.S. and Canada respectively

Expansive, globally integrated transportation system

Challenges Rapid global change and technological innovation presents significant

challenges Global flow of goods, services, people and capital increasing to record

levels Exchange of information and knowledge is becoming virtually

instantaneous Ensuring the region’s long-term success requires new strategies:

Leveraging commercial supply networks and value; Freeing up the border while identifying potential threats; Harnessing energy resources and systems as part of shift to a low carbon

economy; Developing, attracting and retaining talent; and, Optimizing the performance of the region’s transportation network

Opportunities Different mandates and competing organizations affect ability to think

strategically about the Great Lakes-St. Lawrence Region as a shared economic zone

Lessons from around the world show the positive value and significant impact that collaboration across borders, sectors and organizations can have on shared economic regions Cali-Baja Bi-National Mega Region between the United States and Mexico Economic cooperation in the Baltic Sea Region Free Trade Zones along Danube River and in the Persian Gulf

Council of the Great Lakes Region creating a more dynamic culture of collaboration in harnessing the region’s comparative economic advantages Acting as a unifying force between government, business and academia by

developing a shared economic vision and strategy

Opportunities Other recommendations put forward by Dr. Christian Ketels that would

inform and advance this work include: Establishing a cluster network with the emerging water technology groups

across the Region Launching a policy peer group for the study and exchange of best practices in

cluster renewal and diversification Creating a Great Lakes–St. Lawrence Region STARS challenge fund Producing a regular State of the Great Lakes–St. Lawrence Region report

tci 2016 a cluster analysis of the great lakes region in north america

Economy & Finance