By G. Matt Sybrant
EDCO Key Industry Coordinator
Have you ever noticed the phenomenon of a company establishing themselves successfully then over time, other businesses in that same sector open in the same area? Nationally, we see companies gather around particular strengths – aerospace in Washington’s Puget Sound, high tech in Silicon Valley and bioscience in Massachusetts. Locally, Deschutes Brewery’s ability to organically grow an entire brewing industry is one example that comes to mind. And now, we’re also seeing tech, outdoor gear, bioscience and food products forming “clusters” in Bend.
Industry clustering, a term coined by Michael Porter of Harvard Business School, is very common. The occurrence of industry clusters is based in the economic principle of comparative advantage. In practice, when someone gets really good at something, that knowledge is passed on to employees and in turn, a small number of those people will spin off and start their own companies. When a small cluster turns into an industry sector with a critical mass of businesses assembling in a geographic area, synergies occur. Companies share a talent pool, suppliers, industry techniques, and other resources making that specific location in the state, country, or world very good at what they do.
But how is critical mass in a specific industry attained? How can a budding bioscience industry find a comparative advantage against regions that have been at it for decades? Part of the answer lies in communication, or more importantly connection to information and resources. When the wine industry first branched into the Willamette Valley in the late 60s and early 70s it developed more as a community effort, not a singular company. The early winemakers (along with OSU) banded together to form a small and very cooperative industry cluster. They traded equipment. They worked each other’s vineyards. They shared secrets and any other resources acquired by trial and error in order to compete with the more mature wine industries in California and Europe.
Our emerging industry clusters here in our region share a similar story. Peer problem solving and shared learning have proven to be an incredibly effective strategy in growing successful groups of businesses in a particular industry. Traditionally, they may have been thought of as competitors, but this is a global economy our small companies are learning that communication and sharing of best practices, supply chain resources, production efficiency improvements is a better way to get a toehold in the marketplace.
For example, mature outdoor companies such as Ruffwear and Hydro Flask have so much to offer to new a business, such as SnoPlanks. Often more experienced companies are happy to give advice, share hard-learned lessons, and in some cases even resources and suppliers, but it’s not just a one-way street. Larger, more established companies can gain insights about their markets, customer preferences, and the nimbleness of startups. A key element to making this happen: a forum or venue to meet each other and collaborate.
Oregon Outdoor Alliance has supplied that venue for companies with products in the recreational gear and apparel sector. The same is happening with Bend Bioscience Consortium for medical device, medical software, and pharmaceuticals development sectors; the Tech Alliance of Central Oregon for hardware, software and IT companies, and the newly formed specialty food products cluster. These industry organizations are driving measurable economic growth in our region. EDCO, through my work as the Key Industry Coordinator, is pleased to support these game-changing efforts that are “moving the needle” in the long-term effort to strengthen and diversify our economy.
You can reach Kelly by email at [email protected].