Clusters: a fancy word for shared interests

Published in the Jan. 9, 2012 edition of the
Columbia Regional Business Report

By C. Grant Jackson
Senior Vice President/Community Development
Greater Columbia Chamber of Commerce

Clusters as an economic development strategy came to South Carolina as an outgrowth of Harvard Professor Michael Porter’s work for the state in 2003.  Porter, the great cluster guru, describes clusters as “geographically proximate groups of interconnected companies and associated institutions in a particular field, linked by commonalities and complementarities.”

That can make folks’ eyes glaze over. Think in terms of companies in a common business, in a common location, with common problems and maybe you can understand clusters a little bit better.

Our statewide and regional clusters are nurtured by New Carolina, S.C.’s Council on Competitiveness. The work at the regional level in the Midlands is done by a broad coalition of organizations led by Neil McLean. And it really is about connecting the dots.

South Carolina and the Midlands are doing a world-class job of putting Porter’s cluster theory into practice. But you don’t need to take my word for that. McLean and George Fletcher, who leads New Carolina, attended a session at Harvard last month and heard it from Porter himself. Each year Porter brings together those schools from around the world that license his Microeconomics of Competitiveness course. South Carolina was invited to make a presentation to the group and Porter declared that South Carolina has one of the two best cluster initiatives in the world.

Midlands partners

The Midlands effort involves New Carolina, EngenuitySC, the USC-Columbia Fuel Cell Collaborative, the Navigating from Good to Great Foundation, the Greater Columbia Chamber of Commerce and a host of other organizations.

The Navigating from Good to Great Foundation has provided some funding for Midlands cluster initiatives over the last three years. One of the foundation’s first actions in 2008 was to grant 25% of my time as senior vice president for community development to cluster initiatives. I work closely with McLean’s team especially on the insurance technology and services and nuclear clusters.

The Greater Columbia Chamber of Commerce adopted cluster development as part of its strategic plan. A cluster committee, chaired by former chamber chair Cathy Novinger, meets regularly.

The Midlands clusters are insurance technology and services, hydrogen and fuel cells, and nuclear energy. We are also the center for the statewide transportation, distribution and logistics cluster. And we continue to explore opportunities in other areas such as health sciences and the defense industry.

Efforts to make the Columbia region a leader in the nascent hydrogen and fuel cell industry began before Porter came to town.

USC, the city of Columbia, EngenuitySC and SCRA created the USC Columbia Fuel Cell Collaborative. The cluster has seen some success.

Trulite, a fuel cell company, moved to Columbia in early 2010. The company was the first tenant in the Business Accelerator on Midland Tech’s Enterprise Campus and is also a client of the SCRA Technology Ventures’ SC Launch program.

Lots of dots connected. A unit made by Trulite powered the decorations at the U.S. Department of Energy’s annual holiday party in Washington.

Insurance services and technology is one of our strongest clusters. About a dozen companies – including  BlueCross BlueShield of South Carolina and Colonial Life – came together to form iTs|SC: Columbia’s Insurance Technology and Services Cluster.  They have since been joined by others including AFLAC and Seibels Bruce.

Managed by McLean’s Midlands team, the competitors work to grow the regional industry by collaborating on common issues like workforce development. iTs|SC, in partnership with the city of Columbia and the chamber, will release the “Business in Motion Report: Insurance Technology and Services South Carolina” soon. The report quantifies the region’s assets and successes and recommends areas for growth.

The Business in Motion team is also studying another regional cluster: nuclear energy.  The regional nuclear collaborative NuHub was formed to capitalize on the nuclear renaissance.  More than $40 billion of capital investment in nuclear power generation is being deployed within a 100-mile radius of Columbia. NuHub has drawn leadership from SCE&G and Midlands Tech.

The group is focused on making the region a center for training for the nuclear industry as well as a center for Small Modular Reactor development and manufacturing. SMR’s are projected to be a multibillion dollar industry.

Significant win

An SMR conference brought to Columbia last year through the efforts of NuHub produced a significant win for the region. San Diego-based General Atomics donated $900,000 to USC to establish a center to develop and enhance nuclear energy.

Transportation, Distribution and Logistics is a statewide New Carolina cluster headquartered in the Midlands. The group recently launched the Transportation, Distribution and Logistics Council with support from the S.C. Department of Transportation, S.C. Department of Commerce and the S.C. Ports Authority.

Deepal Eliatamby, president of Columbia’s Alliance Consulting Engineers, chairs the council. Midlands members also include the Columbia Metropolitan Airport and Southeastern Freight Lines. The Amazon distribution facility in Lexington County is a huge asset for the cluster.

That is only a brief look at our region’s clusters and I hope it whets your appetite for more. Later this year we’ll explore each of them in depth. And like so many of our efforts our successes are coming about largely by connecting the dots.

C. Grant Jackson is senior vice president/community development of the Greater Columbia Chamber of Commerce. He can be reached at (803) 733-2513 or at gjackson@columbiachamber.com

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