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OPENING REMARKS
Susan Crawford
National Economic Council
The White House
Ms. Crawford said that the Obama administration was
“committed to the idea of regional economic clusters and their role in
economic growth and innovation.” Together with colleagues at the
Office for Science and Technology Policy, she said she had worked to
initiate an interagency innovation group. The meetings had been attended
by many representatives of key federal agencies, especially the
Department of Commerce, and marked by bilateral discussions about
how best to advance the administration’s innovation agenda. She praised
the new Commerce secretary, Gary Locke, for whom “innovation is a
core pursuit.” It is, however, “a lot to get your arms around, because it’s
nothing in particular and everything at once,” and would require a great
deal of work.
In her remarks, she said, she would examine the role of clusters and
the role that federal policies can play to support them. Innovation, she
said, “cannot happen top-down alone, or bottom-up alone.” The
government’s role, she suggested, may be to provide a kind of trellis,
adding that “biological and gardening metaphors come up all the time in
discussing clusters.” She supported the use of evaluation metrics, saying
that these might be considered both fertilizer and “a kind of goal. What
kinds of outcomes do we want to see from these clusters?” she asked.
“It’s all extraordinarily difficult, the idea of providing targeted strategic
funding that leads to a sustainable effort.”
A Cluster Can Begin with “Something Successful on the Ground”
She said that an effective cluster “seems to require the preexistence of
something successful on the ground that needs to be encouraged.” She
continued with the gardening metaphor, saying that the green shoots
from a great university might need some fertilizing, and perhaps some
trellis structure if they are to find productive uses. Like a living process,
innovation has significant features that must be supported: it is always
35
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36 GROWING INNOVATION CLUSTERS FOR AMERICAN PROSPERITY
continuous, evolutionary, and inclusive. “It’s not just about invention,”
she said, “but about dispersing those inventions into the world.”
While universities can be at the heart of innovation clusters, she said,
so too can private firms, which bring the dual approaches of fierce
competition and collaboration. “We’ve seen that the success of Silicon
Valley has a lot to do with the easy flow of information and people
between and among firms. Cooperative attitudes can allow these
informal networks to emerge.” The cooperation among firms and
universities creates knowledge spillover, which is essential to economic
engines. It allows “iterations and repeated modifications so that nothing
is stuck. This is again biological, very dynamic, moving constantly.”
She said that it is easier to describe successful clusters after they
happen than to predict or create them. Silicon Valley, she notes, is
exhaustively studied—the quality of its elements and how they work
together. But such analyses are of little help in showing the federal
government how it can best facilitate the next Silicon Valley.
Coordinating Regional and Federal Initiatives
She then made a suggestion, and asked the participants’ help. She said
that more than 200 programs across the federal government are involved
to varying degrees with local and regional economic development. A
challenge, she said, is to make the best use of these scattered programs.
She proposed selecting two or three elements of those programs to create
a one-stop shop, or “mall of programs,” to help clusters move through
their life cycle. This was not a suggestion to create another federal
agency, but might only require “the work of a few purposeful people
with White House assistance in coordination.” Such a plan, she said,
might make funding strategic, targeted, and effective. Regional programs
would know where to direct queries and how to reach out for funding.
The question she posed was how to select the most appropriate candidate
for a pilot effort. “No one wants to see centralized control of all 200+
programs,” she said. “The whole system would come to its knees.” She
said that a handful of programs “could be drawn into this easy
availability for regions that have their act together and are looking for
better interaction with government.”
She noted that her suggestion reflected the administration’s priority to
improve the interface between government and its constituents. “The
effort is on transparency,” she said, “so people see how government
works and can gain access to it.”
She added that cluster policy should mimic the qualities of clusters
themselves—for example, the policy should gain efficiency by targeting
efforts, breaking down silos, and combining elements of agencies that
overlap. Another crucial element of policy, she said, is to recognize the
balance between top-down decree and bottom-up leadership. “It’s so
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37
SUMMARY OF PRESENTATIONS
important to find that local leader who makes things go,” she said. “The
person who is tightly networked and understands how community
works.”
She closed with an additional question for the symposium: What
outcomes can we expect from healthy clusters, and what metrics should
be used to evaluate them? “It seems to us,” she said, “that outcomes
should be tied to national priorities. This will give clusters a greater
chance of success.” She cited as an example the administration’s
engagement in clean energy policy and reducing the nation’s carbon
footprint. Clusters focusing on those areas would be more likely to find
support in federal agencies, as would clusters helping to lower the costs
of health care and increasing access to improved educational resources
for both young people and adults. What outcomes in cluster policy, she
asked, should be desirable in helping to achieve these and other
objectives?
“That’s my introduction,” she concluded. “We are all in this together.
Our doors are open. I’m very interested in engagement with you and
through the Academies to you.”
Discussion
Jane Siegel of the International Trade Administration, Department of
Commerce, recalled the example of a group in San Antonio, Texas,
which had attempted in 2004 to develop an innovation cluster. She said
that many people needed language training to participate fully, and asked
whether a bottom-up competition with proposals on how to use federal
money would be considered. Ms. Crawford replied that the idea of
competition was a priority for this administration, but that any cluster
proposals should have clear goals and outcomes. “There are risks that
you end up dribbling money all around and not understanding what
you’ve gotten out of it,” she said. “Be very purposeful. Clusters to what
end? Competition might be a great idea, and certainly that notion is in the
air.”
Scott Sklar of the Stella Group said that he worked with medium-
sized and small businesses that were trying to develop clean energy
technologies. He said that these firms benefited from the new emphasis
of the administration on clean energy and encountered many excellent
government federal programs, but that these programs did not cooperate
with each other. He asked what might be done to better blend those
programs with business and scientific expertise “so they can be more
agile and hand off to one another.” Ms. Crawford replied that the Small
Business Administration was working closely with the National
Economic Council and with science and agriculture agencies. “This is
exactly the direction we want to take,” she said. “We don’t want the
science ideas over here and business over there. We want to get people to
work together.”
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38 GROWING INNOVATION CLUSTERS FOR AMERICAN PROSPERITY
Ed Penhoet of the Academies STEP Board added that it is “hard to
overstate” the importance of a university in a cluster. He noted that much
of the nation’s biotechnology activity is located in five regions—San
Francisco, Boston, San Diego, Research Triangle Park, and Seattle—and
that each of them includes one or more major research universities. “One
of our challenges,” he said, “is to think about the timing of the
university’s role. NIH funding started in a significant way in 1950, but
biotech did not grow significantly until 25 years after that. A challenge is
to find ways to stimulate innovation from university research that don’t
have a 25-year lag.”
