cluster muster or bluster? an inductive approach to mapping

1
cluster muster or bluster? an inductive approach
to mapping measuring clusters in canada
introduction

• greg spencer tara vinodrai
• department of geography
• munk centre for international studies
• university of toronto

isrn annual meeting - may 6, 2005
2
background
introduction

• goals of research
• benchmark ISRN case studies to allow for
  comparison
• better our understanding of what makes for
  successful clusters
• consider what (if any) impact clusters have on
  regional economic performance
• develop a made in canada approach to mapping
  and measuring clusters
• Porter (2003) relies on an understanding of the
  structure of the US economy to map and measure
  clusters
• defined at the state-level
• identified with employment LQ 0.8

cluster muster or bluster? spencer vinodrai
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key questions to address
introduction

• how do we systematically define clusters in the
  Canadian context?
• where are the clusters in Canada and how do they
  differ between places?
• how do clusters perform relative to one another
  and what drives cluster performance?
• does clustering make a difference?

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key questions to address
methods

• how do we systematically define clusters in the
  Canadian context?
• where are the clusters in Canada and how do they
  differ between places?
• how do clusters perform relative to one another
  and what drives cluster performance?
• does clustering make a difference?

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defining clusters level of analysis data
sources
methods

• clusters determined inductively using consistent
  definitions and systematic rules
• industry (300 industries)
• 1997 North American Industrial Classification
  System (NAICS)
• measured at the 4-digit level
• geography (140 cities)
• 27 Census Metropolitan Areas (CMAs, urban core
  100,000)
• 113 Census Agglomerations (CAs, urban core
  10,000)
• data sources
• Census of Population, 2001
• Canadian Business Patterns, 1998-2002
• US Patent Trademark Office, 2000-2003

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defining clusters co-location of industries
methods

• step 1 identify industries that tend to
  concentrate in certain places
• exclude industries that are common (non-basic)
  throughout the economy (e.g. gas stations,
  funeral homes, etc.)
• step 2 identify industries that frequently
  locate in the same places
• evaluate on the basis of employment
• co-location more than 50 of the time
• pair-wise examination of co-location patterns
  across industries at the city-region level
• result 19 cluster groupings representing a wide
  spectrum of the economy

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defining clusters canadian cluster universe
methods
Steel Steel Products
Agriculture
Plastics Rubber
Textiles Apparel
Automotive
Maritime
ICT Manufacturing
Forestry Wood Products
ICT Services
Biomedical
Higher Education
Food Beverage
Mining
Business Services
Finance
Creative Cultural
Oil Gas
Logistics
Construction
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defining clusters statistical criteria
methods

• however, not all places with these groups of
  industries can be considered clusters
• step 3 criteria for identifying clusters in
  particular cities
• specialization employment LQ 1
• scale employment 1,000
• scope employment LQ 1 in at least 50 of the
  individual industries in the cluster
• result 263 clusters across 140 canadian cities

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defining clusters an overview
4-digit NAICS (300 industries)
basic geographically concentrated (218 industries)
non-basic geographically ubiquitous (82
industries)
step 1 identify industries that tend to
concentrate in certain places
clustering geographic co-location (167 industries)
non-clustering no geographic co-location (51
industries)
step 2 identify industries that frequently
locate in the same places
clustered scale, scope concentration (263 cases)
non-clustered lack of scale, scope or
concentration (2,397 cases)
step 3 criteria for identifying clusters in
particular cities
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key questions to address
mapping

• how do we systematically define clusters in the
  Canadian context?
• where are the clusters in Canada and how do they
  differ between places?
• how do clusters perform relative to one another
  and what drives cluster performance?
• does clustering make a difference?

cluster muster or bluster? spencer vinodrai
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cluster count by city
mapping
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cluster count by province
mapping
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canadian cluster universe
mapping
Steel Steel Products
Agriculture
Plastics Rubber
Textiles Apparel
Automotive
Maritime
ICT Manufacturing
Forestry Wood Products
ICT Services
Biomedical
Higher Education
Food Beverage
Mining
Business Services
Finance
Creative Cultural
Oil Gas
Logistics
Construction
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key questions to address
mapping

• how do we systematically define clusters in the
  Canadian context?
• where are the clusters in Canada and how do they
  differ between places?
• how do clusters perform relative to one another
  and what drives cluster performance?
• does clustering make a difference?

cluster muster or bluster? spencer vinodrai
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ICT clusters saint john
mapping
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ICT clusters cape breton
mapping
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ICT clusters - ottawa
mapping
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ICT clusters kitchener-waterloo
mapping
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ICT clusters calgary
mapping
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ICT clusters vancouver
mapping
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key questions to address
metrics

• how do we systematically define clusters in the
  Canadian context?
• where are the clusters in Canada and how do they
  differ between places?
• how do clusters perform relative to one another
  and what drives cluster performance?
• does clustering make a difference?

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cluster performance indicators
metrics

• statistical database (58 indicators) with
  flexibility to add / change cluster definitions,
  data and measurements
• critical mass / specialization
• employment, establishments - absolute relative
  size
• cluster scope (breadth)
• knowledge intensity
• occupation-based (e.g., professional, technical,
  trades, science technology occupations)
• education-based (e.g., highest level of
  schooling, field of specialization)
• performance and dynamism
• establishment growth, 1998-2002
• average employment income
• patents, 2000-2003 (cumulative) patents per
  1,000 labour force
• in-migration (domestic, foreign)

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employment by case study
metrics
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bachelors degree or higher by case study
metrics
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recent in-migration (1996-2001) by case study
metrics
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patents, 2000-2003 by case study
metrics
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average employment income by case study
metrics
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income and employment automotive case studies
metrics
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income and employment biomedical case studies
metrics
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income and employment ICT case studies
metrics
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income and employment culture/multimedia case
studies
metrics
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key questions to address
metrics

• how do we systematically define clusters in the
  Canadian context?
• where are the clusters in Canada and how do they
  differ between places?
• how do clusters perform relative to one another
  and what drives cluster performance?
• does clustering make a difference?

cluster muster or bluster? spencer vinodrai
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correlations automotive
metrics
Includes 27 CMAs Bold indicates significant
at the 0.05 level
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correlations biomedical
metrics
Includes 27 CMAs Bold indicates significant
at the 0.05 level
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correlations ICT
metrics
Includes 27 CMAs Bold indicates significant
at the 0.05 level
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correlations culture/multimedia
metrics
Includes 27 CMAs Bold indicates significant
at the 0.05 level
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correlations summary
metrics
Includes 27 CMAs all correlations significant
at the 0.05 level
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key questions to address
analysis

• how do we systematically define clusters in the
  Canadian context?
• where are the clusters in Canada and how do they
  differ between places?
• how do clusters perform relative to one another
  and what drives cluster performance?
• does clustering make a difference?

cluster muster or bluster? spencer vinodrai
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distribution of employment in Canada
analysis
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average regional income clusters outperform
non-clusters
analysis
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the cluster premium income in clusters
non-clusters
analysis
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the cluster premium cluster income vs. regional
income
analysis
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average regional income by employment in clusters
analysis
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population growth by employment in clusters
analysis
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summary key findings
messages

• how do we systematically define clusters in the
  Canadian context?
• combination of geography and industry
• analysis of co-location dynamics in Canada at the
  city-region level
• statistical rules and criteria size,
  specialization, and scope
• where are the clusters in Canada?
• clusters can be found in almost every region of
  Canada, but especially prominent in the
  Quebec-Windsor corridor
• higher education is the only cluster to occur in
  every province
• Ontario is the only province where all clusters
  are represented
• how do clusters differ between places?
• composition of clusters varies between places
  (e.g. ICT)
• suggests different internal dynamics between
  clusters

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summary key findings
messages

• how do clusters perform relative to one another
  and what drives cluster performance?
• relationships between critical mass,
  knowledge-intensity, and dynamics / performance
  vary between clusters
• in general, strong relationships between critical
  mass (scale, concentration, breadth), patent
  activity, and income
• does clustering make a difference?
• incomes are higher when industries cluster
• incomes and population growth are higher in
  cities where more clustering takes place

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where do we go from here?
messages

• incorporation of additional data
• RD activity
• patent data
• shipments / value-added
• employment growth
• analytical dimensions
• further statistical analysis of relative cluster
  performance
• do regions with successful clusters perform
  better than other regions?
• is there a correlation between cluster-specific
  assets and regional assets?
• international comparisons
• back to our dissertations

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thank you
messages

• we would like to acknowledge the valuable
  comments, insights, and assistance of Dieter
  Kogler, Anne Swift, Matthew Lucas, Charles Davis,
  other members of the ISRN and especially
  Deborah Huntley, Meric Gertler and David Wolfe.
• for further questions
• greg.spencer_at_utoronto.ca or tara.vinodrai_at_utoronto
  .ca

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agriculture agricultural equipment cluster
mapping
Support activities for farms
Farms
Fruit vegetable preserving specialty food mfg
Farm product wholesaler- distributors
Animal food manufacturing
Dairy product manufacturing
Agricultural supplies wholesaler-dist.
Pesticide, fertilizer other agric. chemical mfg
Farm, lawn garden equip. wholesaler-dist.
Motor vehicle body trailer manufacturing
Meat product manufacturing
Boiler, tank shipping container mfg
Other fabricated metal product manufacturing
Metal service centres
Architectural structural metals manufacturing
Agricultural, construction mining mach. mfg
Machine shops screw, nut bolt mfg
Warehousing storage
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of agriculture agricultural equipment
clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
51
maritime cluster
mapping
Inland water transportation
Ship and boat building
Heritage institutions
Fishing
Deep-sea, coastal lakes water transportation
Scenic sightseeing transport., water
Seafood product preparation packaging
Support activities for water transportation
Scenic sightseeing transport., land
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of maritime clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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forestry wood products cluster
mapping
Support activities for air transportation
Non-scheduled air transportation
Building construction
Logging
Support activities for forestry
Sawmills wood preservation
Pulp, paper paperboard mills
Veneer, plywood engineered wood prod. mfg
Other wood product mfg
Timber tract operations
Forest nurseries gathering of forest products
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of forestry wood products clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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mining cluster
mapping
Rail transportation
Support activities for rail transportation
Non-metallic mineral mining quarrying
Electric power generation, trans. dist.
Metal ore mining
Coal Mining
Other pipeline transportation
Pipeline transportation of natural gas
Mining (unspecified)
Support act. for mining oil gas extraction
Natural gas distribution
Commercial ind. machinery equip. rental
leasing
Oil and gas extraction
Pipeline transportation of crude oil
Petroleum coal products mfg
Boiler, tank shipping container mfg
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of mining clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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oil gas cluster
mapping
Rail transportation
Support activities for rail transportation
Non-metallic mineral mining quarrying
Electric power generation, trans. dist.
Metal ore mining
Coal mining
Other pipeline transportation
Pipeline transportation of natural gas
Mining (unspecified)
Support act. for mining oil gas extraction
Natural gas distribution
Commercial ind. machinery equip. rental
leasing
Oil and gas extraction
Pipeline transportation of crude oil
Petroleum coal products mfg
Boiler, tank shipping container mfg
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of oil gas clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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construction cluster
mapping
Land subdivision land dvlpmt
Commercial ind. machinery equip. rental
leasing
Building construction
Construction management
Offices of real estate agents brokers
Architectural, engineering related services
Legal services
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of construction clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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logistics cluster
mapping
Home ent. equip. hhold appliance wholesaler-dist
.
Home furnishings wholesaler- distributors
Metal service centres
Other support activities for transportation
Textile, clothing footwear wholesaler-dist.
Used motor vehicle parts access. wholesaler-dist
.
Warehousing and storage
Cigarette tobacco product wholesaler-dist.
Postal service
Freight transportation arrangement
Electrical, A/C supplies wholesaler-dist.
Chemical allied products wholesaler-dist.
Lumber other building supplies wholesaler-dist
.
Pharma, toilet., cosm. sundries wholesaler-dist.
Couriers
Wholesale agents brokers
Beverage wholesaler- distributors
Scheduled air transportation
Non-scheduled air transportation
Food wholesaler- distributors
Other machinery, equip. supplies wholesaler-dist
.
Support activities for air transportation
Personal goods wholesaler- distributors
Other miscellaneous wholesaler-dist.
Paper, paper prod. plastic products wholesaler-d
ist.
Computer comm. equip. supplies wholesaler-dist
.
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of logistics clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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food beverage cluster
mapping
Beverage manufacturing
Beverage wholesaler- distributors
Special food services
Sugar confectionery product mfg
Bakeries tortilla manufacturing
Food wholesaler- distributors
Dairy product manufacturing
Fruit vegetable preserving specialty food mfg
Other food manufacturing
Seafood product preparation packaging
Meat product manufacturing
Warehousing storage
cluster muster or bluster? spencer vinodrai
location
cluster
universe
64
location of food beverage clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
65
textiles apparel cluster
mapping
Fabric mills
Clothing accessories other clothing mfg
Leather hide tanning finishing
Textiles, clothing footwear wholesaler-dist.
Fibre, yarn thread mills
Cut sew clothing manufacturing
Other textile product mills
Other leather allied product manufacturing
Chemical allied products wholesaler-dist.
Textile fabric finishing fabric coating
Textile furnishings mills
Clothing knitting mills
Footwear manufacturing
Plastic product manufacturing
Industrial machinery manufacturing
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of textiles apparel clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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steel steel products cluster
mapping
Other fabricated metal product manufacturing
Metalworking machinery manufacturing
Alumina aluminum prod. processing
Foundries
Machine shops screw, nut bolt mfg
Coating, engraving heat treating allied
activities
Forging and stamping
Architectural structural metals manufacturing
Iron steel mills ferro-alloy manufacturing
Steel product mfg from purchased steel
Boiler, tank shipping container mfg
Basic chemical manufacturing
Natural gas distribution
Electric power generation Trans. dist.
Non-ferrous metal prod. processing
Spring wire product manufacturing
cluster muster or bluster? spencer vinodrai
location
cluster
universe
68
location of steel steel products clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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automotive cluster
mapping
Plastic product manufacturing
Rubber product manufacturing
Machine shops screw, nut bolt mfg
Paint, coating adhesive manufacturing
Motor vehicle manufacturing
Motor vehicle parts mfg
Foundries
Other general-purpose machinery mfg
Forging and stamping
Spring wire product manufacturing
Metalworking machinery manufacturing
Engine, turbine power trans. equipment mfg
Other fabricated metal product manufacturing
Used motor vehicle parts access. wholesaler-dist
.
Coating, engraving heat treating allied
activities
Comm. service industrial machinery mfg
Boiler, tank shipping container mfg
cluster muster or bluster? spencer vinodrai
location
cluster
universe
70
location of automotive clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
71
plastics rubber cluster
mapping
Resin, synthetic rubber mfg
Other miscellaneous manufacturing
Glass glass product manufacturing
Clay product refractory mfg
Rubber product manufacturing
Plastic product manufacturing
Forging and stamping
Foundries
Hardware manufacturing
Converted paper product manufacturing
Printing related support activities
Other chemical product mfg
Soap, cleaning compound toilet prep. mfg
Paint, coating adhesive mfg
Chemical allied products wholesaler-dist.
Pharmaceutical medicine mfg
cluster muster or bluster? spencer vinodrai
location
cluster
universe
72
location of plastics rubber clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
73
biomedical cluster
mapping
Chemical allied products wholesaler-dist.
Pharma, toilet., cosm. sundries wholesaler-dist.
Semiconductor other electronic component mfg
Other chemical product mfg
Medical equipment supplies mfg
Pharmaceutical medicine mfg
Nav., measuring, medical control instruments mfg
Plastic product manufacturing
Medical diagnostic laboratories
Grant-making giving services
Securities commodities brokerage
Mngmt, scientific technical consulting serv.
cluster muster or bluster? spencer vinodrai
location
cluster
universe
74
location of biomedical clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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ICT manufacturing clusters
mapping
Plastic product manufacturing
Electrical equipment manufacturing
Computer comm. equip. supplies wholesaler-dist
.
Medical equipment supplies mfg
Semiconductor other electronic component mfg
Computer peripheral equip. manufacturing
Mfg reproducing magnetic optical media
Software publishers
Communications equipment manufacturing
Nav., measuring, medical control instruments mfg
Spring wire product manufacturing
Elect. precision equipment repair maintenance
Radio television broadcasting
Data processing services
Other electrical equipment component mfg
Bus. schools computer mngmt training
Universities
Telecoms
Computer systems design related services
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of ICT manufacturing clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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ICT services clusters
mapping
Plastic product manufacturing
Electrical equipment manufacturing
Computer comm. equip. supplies wholesaler-dist
.
Medical equipment supplies mfg
Semiconductor other electronic component mfg
Computer peripheral equip. manufacturing
Mfg reproducing magnetic optical media
Software publishers
Communications equipment manufacturing
Nav., measuring, medical control instruments mfg
Spring wire product manufacturing
Elect. precision equipment repair maintenance
Radio television broadcasting
Data processing services
Other electrical equipment component mfg
Bus. schools computer mngmt training
Universities
Telecoms
Computer systems design related services
cluster muster or bluster? spencer vinodrai
location
cluster
universe
78
location of ICT services clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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business services clusters
mapping
Data processing services
Information services
Lessors of real estate
Investigation security services
Mngmt, scientific technical consulting serv.
Couriers
Computer systems design related services
Elect. precision equipment repair maintenance
Business support services
Legal services
Universities
Architectural, engineering related services
Bus schools comp mngmt training
Employment services
Scientific research development services
Technical trade schools
cluster muster or bluster? spencer vinodrai
location
cluster
universe
80
location of business services clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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finance clusters
mapping
Non-depository credit intermediation
Agencies, other insurance related activities
Other funds financial vehicles
Couriers
Depository credit intermediation
Securities commodities brokerage
Insurance carriers
Pension funds
Activities related to credit intermediation
Securities and commodity exchanges
Other financial investment activities
Bus. schools comp. mngmt training
Software publishers
Data processing services
Mngmt, scientific technical consulting serv.
Accounting, tax prep, bookkeeping payroll
services
Computer systems design related services
cluster muster or bluster? spencer vinodrai
location
cluster
universe
82
location of finance clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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creative, cultural multimedia cluster
mapping
Elect. precision equipment repair maintenance
Mfg reproducing magnetic optical media
Motion picture video industries
Radio television broadcasting
Software publishers
Other schools instruction
Technical trade schools
Specialized design services
Independent artists, writers performers
Sound recording industries
Performing arts companies
Grant-making giving services
Agents for artists, entertainers
Promoters of performing arts similar events
Spectator sports
Advertising related services
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of creative, cultural multimedia
clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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higher education clusters
mapping
Information services
Scientific research development services
Technical trade schools
Universities
Bus. schools comp. mngmt training
Educational support services
Other schools instruction
Facilities support services
cluster muster or bluster? spencer vinodrai
location
cluster
universe
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location of higher education clusters
mapping
Employment
cluster muster or bluster? spencer vinodrai
location
cluster
universe