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Member News: C.C. Eship / NACCE Journal Summer/Fall 2010

One Community's Use of Business Clusters as a Strategy for Economic Development

Wednesday, July 21, 2010   (0 Comments)
Posted by: Matthew Montoya
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By Erin Givens, Continuing Education Coordinator; Felix Haynes, President;
April Robinson, Assistant to the Dean of Academic Affairs; and Tom Tankersley,
Grants Coordinator, Hillsborough Community College, Plant City Campus

In the early 1990sMichael Porter'sThe Competitive Advantage of Nationsand Paul Krugman'sGeography and Tradeanalyzed the use of business clusters. However, geographic concentrations of simultaneously competing and cooperating businesses benefiting from close proximity to each other date back more than one hundred years to the inter-organizational networks of Germany and the United Kingdom. As the term became instilled in the current business nomenclature, economists and small business owners alike realized that these clusters can provide several important benefits. A cluster can increase productivity, drive innovation and creative output, stimulate new business in the field, and create a larger pool of qualified workers for the cluster.

Generally, three types of business clusters have been recognized by economists. Technology clusters develop around renowned universities and research centers, such as California's Silicon Valley or The Research Triangle in North Carolina. Knowledge-based clusters focus on more traditional activities, are industry specific, and often are maintained for long durations, such as London's financial center. Finally, factor endowment clusters are created by advantages linked to geographical location, like wine production clusters in sunny, mountainous regions conducive to growing good grapes.

Over the years local and state governments, along with business development organizations, have worked to create such clusters–as these entities realize that there are tremendous economic benefits to business clusters. Moreover, these benefits are not just realized by well-known clusters but are also captured by less-recognizable smaller regions and cities.

Association Cluster

Such is the case of Plant City, Florida, a community of 33,000 situated between Tampa and Lakeland on Interstate 4. Over the years Plant City has attracted a number of national associations, many with an agri-business focus. The Florida Strawberry Growers Association is located in the Plant City-Dover area and also oversees the Florida Strawberry Patent Service Corporation and the Florida Strawberry Research and Education Foundation. The National Watermelon Association, with chapters in over 30 states, represents the interests of watermelon growers and distributors from its offices in Plant City. The Paso Fino Horse Association, an international organization supporting the breeding and competitive showing of horses with a distinct gait, has been located in Plant City for 20 years and represents over 6,000 members world-wide. Finally, as part of an effort to bring the 2012 Olympics to nearby Tampa, Plant City officials were able to convince the International Softball Federation (ISF) to relocate to Plant City to a vacant baseball facility constructed as a spring training site for the Cincinnati Reds in the 1980s. The ISF is the only Olympic sport with its international headquarters located in the United States.

This cluster of associations connects Plant City to the distinct field of association management, a fact that may not be widely known. Association managers encounter similar personnel challenges and several of the same organizational tasks found in small businesses. The Association Management sector of the U.S. economy accounts for billions of dollars, employs more than half a million people, and includes more than 65,000 state, local, national, and international associations.

One question many may ask is how did a city of 33,000 residents surrounded by much bigger and presumably more competitive cities such as Tampa and Lakeland attract this cluster? The answer is three-pronged. First, Plant City has the good fortune to have a strong Chamber of Commerce focused not only on retaining businesses but also on recruiting industry. The Chamber works closely with city officials to leverage its resources and knowledge to drive economic development. Second, Plant City has a distinct geographic advantage. The city is centrally located on Interstate 4 near its intersection with Interstate 75, in close proximity to two international airports, and is situated in a key agricultural area for the state of Florida. Plant City is known as the Winter Strawberry Capital of the World, and the area generates hundreds of millions of dollars in revenue through its agricultural production businesses. Third, the area's connection to the Plant City Campus of Hillsborough Community College and its co-located branch campus of the University of Florida's Institute of Food and Agricultural Science affords it a sustainable competitive advantage–especially in the area of attracting other agriculture-related associations.

These factors have worked in Plant City's favor for many years in attracting and maintaining this cluster of associations, a branch of free market capitalism that has functioned with the same dynamism of the private sector organizations it represents. As this article is being written, the Paso Fino Horse Association has decided to join the thoroughbred horse cluster in Lexington, Kentucky, and growers of new Plant City crops like blueberries are moving down the path of organizing their own association. These dynamic outcomes of Plant City's association cluster continue to provide evidence for the effectiveness of the cluster concept and explain why so many other local communities are striving to establish their own.

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