Puget Sound area still in search of 3rd economic cluster
Clean tech is another promising area, already employing more than 31,000.
Special to The Seattle Times
Economic clusters power a regionThe Puget Sound region is lucky to have two, but three would be better
This has been the center of an economic cluster for the region for years.
First came Microsoft, then all kinds of related businesses.
Life sciences, biotech or clean tech are all possibilities.
From Fresno, Calif., to Columbus, Ohio, almost every city and town in America claims or aspires to create economic clusters. Seattle actually delivers.
The Puget Sound region enjoys indisputably two of the world's leading clusters: aerospace and software. They disproportionately power the region's economic health, resilience and affluence.
Three — one of those nice charmed numbers — would be better. We're not there yet.
Professor Michael Porter, of Harvard, defines clusters as "geographic concentrations of interconnected companies, specialized suppliers, service providers and associated institutions in a particular field that are present in a nation or region."
Translation: Boeing and its 300 suppliers, backed by a world-class University of Washington — at least until the Legislature finishes taking the wrecking ball to the latter. And, Microsoft, Amazon.com, the gaming industry for software. So, a cluster is not just a big factory, even if it makes sophisticated semiconductors or airplane parts.
Real clusters, and the reason every community wants one, are the ticket to high-wage jobs and world-class competitiveness. They attract capital and talent. Their mixture of critical mass, collaboration, synergy and continual reinvention makes them formidable and desirable.
They're also almost impossible to build from scratch as a cure-all for an ailing regional economy, even though the cluster buzzword is ubiquitous. Silicon Valley, North Carolina's Research Triangle Park and Boston took decades to make, backed by multiple elite universities and massive public spending.
Remember this when some politician says her city is going to be "the next Silicon Valley."
No offense to, say, Phoenix, but you're not going to pick up a Cluster-Matic at Best Buy and have it hooked up and running in a few months on the cheap.
Seattle's challenge is different. First, retaining and expanding our successful clusters when everybody in the world wants our assets. Second, pushing ahead to achieve that illusive third cluster.
Now, one could argue that the Puget Sound ports represent a trade and logistics cluster. It's a valid point, but typically the term applies to leading-edge, dynamic, tech-based "ecosystems," to use the new favorite word.
A decade ago, it seemed as if biotech would make No. 3. Seattle had birthed Immunex and watched it grow to be a powerhouse. Even after it was bought by Amgen, the region was ranked fifth nationwide by an influential 2004 report by the Milken Institute.
But while life sciences, widely defined, is an important driver of the economy here, biotech faltered. It never achieved the continuing dominance seen in San Diego, San Francisco and Boston. We're still waiting on the next Immunex. Venture funding is harder to obtain. Competing clusters are found worldwide, especially where regulation of clinical trials is more streamlined.
That's not a reason to give up. According to the economic-development organization enterpriseSeattle, 160 life-sciences companies here employ 22,000. The boom in South Lake Union is partly driven by this sector and will provide the important density where collaboration and innovation happen.
According to Jeff Marcell, CEO of enterpriseSeattle, "The great thing about the region is the sheer amount of collaboration that goes on to support and grow the life-sciences cluster."
He cites teamwork involving state, county, cities and universities, working with groups such as enterpriseSeattle, the Washington Biotechnology and Biomedical Association, Washington Global Health Alliance, Innovation Partnership Zone for BioMedical Manufacturing, and Cascadia MedTech Accelerator.
The UW's ability to land research grants is another huge advantage, as is the global health efforts organized by the Bill & Melinda Gates Foundation. Paul Allen recently donated $300 million to the Seattle-based Allen Institute for Brain Science.
Clean tech is another promising area, already employing more than 31,000. The state Department of Commerce is leading a delegation that includes local companies to Hanover, Germany, this week for the world's largest industrial-technology trade show.
Still, a significant challenge is the federal pullback from supporting clean energy. The Brookings Institution warned last week that by 2014, the industry would face a 75 percent decline in funding support compared with 2009, unless Congress acts. This is causing venture capital to pull back, too.
With all the stealth subsidies for fossil fuels, it's not as if clean energy is a welfare queen. China is spending heavily to corner these emerging technologies. And, again, no advanced cluster happened without government support as a platform for private enterprise.
Brookings laid out a 65-page plan to wean the sector off subsidies. But whether this will lead to action in an election year or with gridlocked D.C. is doubtful.
Despite the collapse of Washington Mutual, enterpriseSeattle hasn't even given up on the notion of a financial-services cluster here, holding a summit on May 1. This will be challenging without a major bank headquarters, but who knows? Could one be built around Russell Investments and the high-net wealth-management firms here?
Nobody can unseat New York and, for now at least, Charlotte for this crown. But few places have our software cluster, whose expertise can morph into many directions, including banking.
Still, it's a longshot. That's the reality for most regions in a slow-growth, recession-clobbered America. That Seattle has two commanding clusters is a major achievement, one we must not take for granted.
I'm with Intel's Andy Grove: Only the paranoid survive.
That's why I want three.
You may reach Jon Talton at email@example.com. On Twitter @jontalton.
About Jon Talton
Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest