Industry Clusters - South Carolina Council on Competitiveness

A cluster is a geographic concentration of related companies, organizations, and institutions in a particular field or industry that can collectively raise the industry’s presence, productivity, and economic impact.

Importance of Clustering
to South Carolina’s Economy

Clusters allow companies to be more innovative and productive by providing access to a shared pool of specialized resources without having to look outside of the region.

TALENT

RESEARCH & DEVELOPMENT

FINANCING

SUPPLIERS

SERVICES

INDUSTRY KNOWLEDGE

The existence of established industry clusters in place add value to the state’s economy by serving as a resource to recruit, expand, and create new opportunities for new and existing businesses. As current businesses expand and new companies looking to locate to South Carolina, the state’s network of clusters can be key in determining long-term success.

A cluster is a geographic concentration of related companies, organizations, and institutions in a particular field or industry that can collectively raise the industry’s presence, productivity, and economic impact.

Importance of Clustering to South Carolina’s Economy

Clusters allow companies to be more innovative and productive by providing access to a shared pool of specialized resources without having to look outside of the region.

CREATE

Clusters improve the entrepreneurial environment and
drives competition that fuels new ideas and innovation

EXPAND

Companies already located in the state grow due to
the presence of industry clusters

RECRUIT

New companies locate to the state
to be closer to clusters

CREATE

EXPAND

RECRUIT

CREATE

Clusters improve the entrepreneurial environment and drives competition that fuels new ideas and innovation

EXPAND

Companies already located in the state grow due to the presence of industry clusters

RECRUIT

New companies locate to the state to be closer to clusters

**Clusters & Initiatives directly managed by The Council:**

**Clusters & Initiatives supported by The Council:**

CREATIVE

ENGINEERING

RECYCLING

SC FUTUREMAKERS

Other Clusters & Initiatives in South Carolina

PALMETTO AGRIBUSINESS COUNCIL

SC AUTOMOTIVE COUNCIL

SC BIO

OTHER INDUSTRY CLUSTERS IN SOUTH CAROLINA

What is an industry cluster?

Have you ever wondered why certain industries tend to be located in certain areas? For example, Napa Valley in California is famous for its wine production. A large number of tech companies and start-ups are concentrated in Silicon Valley. New York is the center of the American publishing industry, and London is a capitol of global finance. Each of these is an industry cluster – a group of companies in a similar industry located close to one another.

How does an industry cluster work?

Companies tend to stay in the same location for a long time. Over the years, a natural concentration or “cluster” of specialized suppliers and skilled workers is created, along with institutions that provide specialized training and education, research, and technical support to the industry.

Shared Labor Pool

Businesses perform better where they can find employees with specialized skills, and workers want to be where companies can hire them. People are also drawn to places where others share their interests and ideas. These “pools of talent” generate new ideas and attract other talented people.

Supplier Specialization

Almost every company relies on specialized supplies provided by another company. The competitive environment in clusters forces specialization of suppliers. New market demands are met more quickly and efficiently than they would be outside of the cluster.

Knowledge Spillover

The competition inside industry clusters encourages new ideas and innovation. Industry clusters also encourage entrepreneurship as workers move between employers and more easily spot opportunities to create their own companies.

Throughout its existence, the Council’s push to promote clusters has made a discernible impact on the state. The concept of clustering has become standard practice as other economic development groups have begun organizing their industry recruitment around clusters.

More importantly, the Council has successfully brought attention to the various clusters that have developed and evolved over the years while maintaining the understanding that the life cycle of a cluster is difficult to predict and that, while all cluster initiatives are good, they do not necessarily have advantageous timing or an optimal mix of resources and focus. Thus, over the years some initiatives have evolved into new partnerships or have been absorbed into other while other initiatives have become dormant and new areas of focus have emerged in their place.

WHY ARE INDUSTRY CLUSTERS IMPORTANT?

Industry clusters attract new companies to South Carolina.
Industry clusters attract new companies because the suppliers and workers necessary to support their operations are already in place. In most cases, the cluster’s location is also desirable because it offers easy access to research and development institutions. Cluster leaders develop institutional knowledge of the industry and become marketers to prospect companies.

Industry clusters grow existing companies in South Carolina and create jobs.
The infrastructure created by industry clusters increases the efficiency and productivity of individual companies. In turn, companies expand and create more jobs.

Industry clusters make it easier to start new companies in South Carolina.
Industry clusters create opportunities for entrepreneurs to succeed. New lines of business are more visible, and the specialized suppliers and talent pools make it easier to start a company.

How does the SC Council on Competitiveness support industry clusters?

In some cases, the cluster leaders organize their own non-profit organization without facilitation from a third-party. In other cases, the cluster leadership organizes with the assistance of another organization like the South Carolina Council on Competitiveness. The level of support the Council provides varies according to the cluster’s stage of growth and specific needs.

PUBLICATIONS

A Strategic Plan for South Carolina, by Michael Porter (2005).

OTHER RESOURCES

Harvard University Institute for Strategy & Competitiveness

U.S. Cluster Mapping Project