Prosperity scorecard measures how cities foster business hubs [industrial clusters]- by Richard Blackwell (Globe and Mail – March 26, 2012)

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But is it possible to force-feed clusters, or to shift a city’s existing
cluster mix? James Milway, executive director of the Martin Prosperity
Institute at the University of Toronto’s Rotman School of Business, said
the most effective move is “to take what you’ve got and make the best of
it.” Local educational institutions need to turn out skilled graduates
that the existing clusters need, he said, and “if the government can
prod that along, that’s great.”

For a thorough analysis of Sudbury’s four mining clusters, go to: Sudbury is the luckiest city in North America

Mike Tims is clearly in the sweet spot. The company he chairs, Peters and Co., is an investment bank that operates at the intersection of two of the most vibrant sectors of the Calgary economy – resource extraction and financial services.

Those two industry “clusters” are crucial to Calgary’s success, as they bring together a complex group of players whose interaction, competition and collaboration accelerate productivity and innovation.

Canadian cities are increasingly recognizing the need to nurture and refine these business hubs, getting leaders, educational institutions, and government agencies together to spur them along as they compete for economic activity with other municipalities in North America and around the world.

While the oil and gas cluster has been building in Calgary for decades, financial services is a more recent concentration – as businesses that explore, extract and transport energy resources look for help in financing their operations and taking their companies public.

“It was really kind of natural that a cluster of financial-related businesses would gather in the same location,” Mr. Tims said.

A report released Monday by the Toronto Board of Trade (TBOT) details how five Canadian cities stack up against seven major U.S. cities in 10 key industry clusters.

Some of the results are no surprise. Calgary, for example, ranks first in the energy cluster, thanks to its role as home to most Canadian companies that are active in oil and gas production and energy-related engineering and construction. Vancouver comes out on top among the dozen North American firms in transportation and logistics, mainly because of its position as a hub for Asia-Pacific trade. Los Angeles is at the head of entertainment, while Seattle wins out for aerospace.

Toronto gets good grades on a number of fronts, but it is ranked No. 1 only in the autos and parts group. (Detroit was not included in the TBOT study.)

Unfortunately, the report notes, the automotive industry has been in decline, so being ahead of the pack in this measure isn’t as good as leading the way in booming sectors such as information technology.

Toronto, however, is also a strong performer in finance, transportation, food and beverage manufacturing, and bio-pharma.

That diversity is a great strength for the city and region, said TBOT president Carol Wilding, but it also underlines that Toronto does not have a disciplined cluster strategy. This contrasts with cities such as Boston, she said, which has focused support on its bio-medical hubs. Toronto’s business leaders need to take action, with support from government, she said, to formulate a cluster strategy.

So why is it important to have strong clusters in a region’s or a municipality’s economy?

For one thing, it means there is a wide pool of specialized talent, along with a community of suppliers and financiers with complementary skills – all necessary factors to improve productivity.

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