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Competitors Collaborate to Create Clusters

White County needed jobs. John Heimlich, chairman of the county commissioners, was concerned for the county's economic future. He saw the need for stable employment opportunities and a plan for directing resources in this west-central Indiana county comprised largely of rural areas and small communities.

Photo by Tom Campbell

Greg Bossaer (left) and John Heimlich stand at the site for a new industrial park in White County. Purdue Extension helped with the county's strategic plan, which led to the industrial park development.

But how could an economic underdog compete against big city neighbors for capital and potential employers?

He and other community leaders joined forces. He contacted Janet Ayres, Purdue University Extension economic and community development specialist, who helped White County officials take charge of their county's future. Working through the local Purdue Extension office, a steering committee of key leaders initiated a one-year, community-wide strategic planning program.

"The intent was to develop a vision, build consensus among residents and organizations, and take action on high-priority issues," said Ayres.

Economic development was one key goal, and task forces identified infrastructure improvements and workforce development as priorities.

"The county council approved $500,000 for water and sewer extensions to a new industrial site after hearing that it was a priority," said Ayres. To train workers, a learning network was established to coordinate educational services for business and industry.

Last winter, White County's newest industrial park was announced, thanks in part to the strategic planning efforts.

"Any industry in the area affects the entire county tax base," said Greg Bossaer, a task force member and Purdue Extension director in White County. "The businesses started here may attract other businesses to our county."

Community Collaboration Beats Competition

The White County story highlights new drivers of economic development. The pendulum is swinging away from communities contending against each other for companies. Today's jobs are more often attained by collaboration rather than competition.

Also popular is a trend to target related businesses and industries that cluster together, called an "agglomeration economy." In the same way that car dealers flock together and restaurants reside side-by-side, so do manufacturers and other businesses.

"By locating together, everyone gets more business," said Christine Nolan, Purdue Extension economic and community development specialist. "These businesses attract more customers, are easier to get to, and share some of the same services."

She said regions that want to attract new employers should try to target similar businesses to a specific location.

Last year Nolan helped conduct an analysis of business development in Indiana and in 12 regions within the state. The study identified the state's strengths, such as its central location, which aids in transportation and distribution. Also identified were weaknesses, like the need for more information technology and advanced business services. The results identify potential synergies and strategies for regional economic development.

Nolan said economic clusters can overcome some economic development problems. "Businesses and industries in a cluster can form a coalition to achieve common goals, such as improvements in infrastructure or workforce training."

The Purdue Center for Regional Development was established to provide information and form partnerships that foster regional approaches to development.

"Our goal is to help Indiana become the nation's leader in supporting creative regional development," said Sam Cordes, center co-director and Purdue Extension assistant director.

At the heart of the effort are ideas that hearken back to mom's advice: share and play nice.

"It's not easy for communities that have been fierce rivals to develop trust and work together," said Cordes. "But we are capitalizing on win-win efforts. We are showing people the power of sharing information and ideas. We also get groups talking to each other and finding ways to cooperate in order to meet common needs."

Clusters Attract Businesses with Common Needs

One endeavor to create a cluster economy is the BioCrossroads initiative. This effort to attract life sciences industries to Indiana targets an area from Purdue in the north, to Indianapolis, and down to Indiana University to the south.

"There is more to be gained by developing asset groups," said David Johnson, president of BioCrossroads, a statewide effort that includes Purdue.

He said the Hoosier state's drawing power in life sciences is well established. "Central Indiana has two world-class research universities nearby, a sophisticated health-care industry, and corporate leaders like Eli Lilly and Dow AgroSciences," said Johnson.

BioCrossroads operates through private funding and investments. Its partners share resources and could do the same for other life-sciences entities that locate within the sector. The goal is to accelerate job creation in businesses like biotechnology, the biomedical industry, agriculture, and pharmaceuticals.

"Part of the sign that the BioCrossroads effort is successful will be when all initiative partners report they are reaching their business potential better together than any of them would separately," said Johnson.