Cities that become hubs for regional economic expansion share some similar traits. There are benefits to opening businesses within existing clusters that lead to overall development of profitable opportunities. To understand this is beneficial to look at a district and how the cities are fostering their economic development. A study within the Economic Perspectives Journal offers insight into benefits of clusters within the U.S.'s seventh districts largest cities (Matton & Wange, 2014).
Wages, patents, and economic growth are often associated with hub oriented cities that support the development of strong industry clusters. Each of the regions appears to have their own competencies such as automotive, technology, aerospace, rubber, transportation, as well as other market driven activities. When enough of these industries exist and work in collaboration they have formed a meaningful cluster.
Each city tries to actively manage these clusters with varying degrees of success often based on how well they target growth sectors. Those that are successful, regularly find greater advantages in terms of the upswing in wages, patent creation and ultimately economic growth. These cities become known for their investment opportunities and products based on their capacity to produce quality products and services.
There are advantages for professionals who work within these clusters, in terms of wages and lifestyle. While the costs often rises, so does the income of the labor force that work within these clusters. Other benefits to lifestyle increase as educational and cultural organizations arise to support the budding skilled and professional classes.
When clusters are successfully managed the following five aspects seem to be present:
1. Lower Tax Rates
2. Strong Transportation Structure
3. Well trained workforce
4. Global investment appeal
5. Educational and cultural organizations
Clusters work well when products and services are moved around quickly. Knowledge development appears to be a main criteria for success as skill levels and wages arise. Development is catalyzed when costs, such as taxes are lower, and investments improve to keep these industries expanding. Educational and cultural organizations foster growth of new innovation and support the education of the skilled workforce.
Matton, R. & Wang, N. (2014). Industry clusters and economic development in the seventh districts largest cities. Economic Perspectives, 38 (2).