The goal is to produce goods and services that the market will pay more for regardless of the starting point. Cluster Sector When contemplating technology-based economic development and workforce development policies and programs it is important to make a distinction between clusters and sectors. The essence of a cluster is in its web of interdependent interactions and buy-seller relationships among a geographically concentrated group of firms. Examples include carpet making in Dalton, Georgia, financial services in New York City, Silicon Valley, hosiery manufacturer in North Carolina's Catawba Valley, optics in Rochester and central Florida, robotics in Detroit, software in the Connecticut River Valley, and jewelry in Providence, Rhode Island. Finally, it is important to note that clusters are not intrinsically good or bad for a regional economy.
Stagnant clusters can render a regional economy extremely vulnerable.
However, dynamic, well-developed clusters can drive regional economies with high rates of technological innovation, highly skilled, mobile, and adaptable workers, a collaborative business culture, and the capacity to reinvent its competitiveness competencies and advantages to purse emerging market opportunities. One way to begin the process of identifying clusters of firms or investigating clustering potential is to scan the regional economy for above average concentrations of employment or establishments in a particular industry or industry segment. At the regional level these measures, which are called location quotients, can indicate relative areas of specialization within the economy and provide clues on where to begin to look for geographic concentrations of firms who comprise production systems. Location quotients are typically calculated on the basis of employment concentrations or numbers of establishments. If the resulting ratio is greater than one, it can be assumed that the industry is relatively specialized in that industry.