By Marshall J. Vest, EBR Director (retired)
Metro Tucson has a significant presence in 11 nationally identified “traded” sub-clusters. Clusters are “geographically concentrated groups of interconnected companies, universities, and related institutions that arise out of linkages or externalities across industries .” “Traded” clusters, which account nationwide for only about one-third of employment but register much higher wages, are industries that compete across regions. Porter1 originally identified 41 traded clusters and recently added three more. The number of sub-clusters is several times larger.
Metro Tucson accounts for nearly 5.5% of all employees nationwide in the “missiles and space vehicles” sub-cluster. With some 17,500 employees, Tucson ranks number 1 in the nation for this activity. Other sub-clusters with significant activity (In order of number of employees) include hospitality and tourism; professional organizations and services; transportation and logistics; entertainment venues; engineering services; research organizations; medical equipment; software; search and navigation equipment; and optical instruments. With the exception of the latter, all have at least 1,000 employees and an above-average share of employment in that cluster.
Metro Tucson’s list of cluster activities is noticeably short compared to the ten other peer metros identified as competitors by local economic developers. The ten metro areas in addition to Tucson are Phoenix, San Diego, Denver, Las Vegas, Albuquerque, Portland, Austin, Dallas, San Antonio, and Salt Lake City (clusters for these metros at end of article). Most of these peers are considerably larger than Tucson – many are twice the size – so it’s understandable why Tucson’s list is short. But it’s also often argued that Tucson’s economy is underdeveloped. Albuquerque for example, is roughly the same size, but has a presence in clusters that is 20% longer.
Metro Phoenix, with four times Tucson’s population, has three times the number of significant sub-clusters than Tucson has. The list, headed by computer programming, includes some 32 categories. Educational institutions, accommodations, and merchandise wholesaling also are near the top of the list.
The metro Dallas complex, the largest peer, with a population over 6.7 million, has a presence in some 41 categories, led by computer programming, merchandise wholesaling, depository institutions, and aircraft. San Antonio’s list includes 26 while Austin has 21.
San Diego, with a population exceeding 3.1 million, lists 32 categories. Research organizations heads the list and biopharmaceutical products enters the list at 17th. Denver has 24 clusters and Salt Lake City has 22. Portland has 26, Las Vegas 17, and Albuquerque has 14.
Clusters provide insights into what drives the economy at the national, state, and local levels. Cluster composition has been found to be an important factor in explaining growth potential, wage levels, and competitiveness. Understanding a region’s cluster composition informs local economic developers’ efforts to promote their economy.
1. Porter, Michael. “Cluster Mapping: A Primer.” Cluster Mapping; Powerful Tools for Economic Development. Institute for Strategy and Competitiveness. Web. 25 Nov 2013. <http://clustermapping.us/methodology/cluster-mapping-a-primer/?d-set=db_mode:close>.
Traded cluster concentrations: Albuquerque, Austin, Dallas, and Denver
Traded cluster concentrations: Las Vegas, Portland, and Phoenix
Traded cluster concentrations: Salt lake, San Antonio, and San Diego
Tucson aerial photo courtesy Shutterstock.