Building an investment rich environment encourages the
growth of local business as well as entices future businesses to settle into
the area. Each city offers something unique to the market and understanding
what benefits or detractors a city offers helps in formalizing a fuller
conception of the economic drivers of an area. Gaining knowledge about what
type of factors lead to growth and having a full conception of a clusters
factors helps in strategic decision making that has the highest results.
Cluster Attributes that Impact Potential Growth:
Clusters that are ready to grow and develop have certain
characteristics that make them appealing to businesses and investors. While
many times we may think of these as purely business and economic viewpoints
there are other soft factors that come into play when understand the whole
value mix of a cluster. It is helpful to view such clusters as a total entity
with positives and negatives. By doing so it becomes increasingly possible to
compare and contrast against other locations.
Understanding, envisioning, and relate to the attributes
leads to the ability to formulate an understanding of the total cluster and in
turn relate that to interlopers. Questions might arise such as, what are the
benefits or detractors of a location; Are there unique attributes to some
locations over others that would appeal to certain industries; What type of
financials might industry investors like to see; are the measurables relevant
to entrepreneurs?
Investors may readily understand taxes, regulations, and
infrastructure but have more difficulty measuring less quantifiable factors
that still impact their success. Turning elusive to define attributes into
specific benefits can enhance value and interest. As a package there
will be certain measurables and statistics that will appeal to a broad
investment market and some that will appeal to specific industries. As an
example, we might say a business that wants to manufacture a new product would
need to look at a variety of input factors that range from physical
infrastructure to the availability of skills.
We can think about where to assess the value of a cluster by
understanding how a cluster is view by those selecting locations to set up
shop. There are several factors that make an area ripe for investment that
include market and customer needs, government and regulatory support, access to
infrastructure/services, land availability and zoning, and participatory
engagement (Kadlec, & Josip & Bedeković, M., 2018). Evaluating those
factors together creates a cluster portfolio that helps potential parties
decide if the location is right for their business (One could create the
portfolio and the brochure to send to industries that would improve the area. Within
the portfolio should be specific numbers, locations, etc. needed by investors. The
goal is to make it easy for them to make decisions.)
Continuing the example of Escanaba Michigan as a basis for a
model of an area ripe for investment we might consider the upgrades in
infrastructure and high levels of skills in the area but certainly shouldn't
ignore the lifestyle nor abundant recreational activities or facilities like
the Marina. One should see a cluster as a full system with all the positives
and negatives one can offer. If you can quantify it or formalize it into an
added value it has market value. If they can make money, live there, and
retain their human capital then all is good in the world.
Entrepneurial Zones and Collaboration:
Attracting Small and Medium Enterprises (SME) can be
encouraged by entrepreneurial zones as well as the influences of local and
regional stakeholders (Kadlec & Bedekovic, 2018). Improving investment and business
growth means there should be a proper environment receptive of that growth and
coordination between different stakeholders will help to increase the potential
to attract such investments. Stakeholder policies, regulations, objectives,
resources, etc. should f alignment around enhancing the cluster and its overall
functioning.
A small rural city like Escanaba might seek out resources that attract entrepreneurs, investors, and if desired international investment. That will depend in part on the type of cluster being created and the specific needs of that local system. The would consider how the 5 factors that impact growth as well as its entrepreneurial environment (as a package). The process becomes much easier if local, stage, and federal interests align to spawn a new industry or strengthen a current industry. Rapid innovation does sometimes bring forth radical new products and technologies that branch development into down new developmental paths (It may be possible to predict new industries based on the problems the market is facing, unique aspects of the cluster, and the current lines of scientific development. )A small rural city like Escanaba might seek out resources that attract entrepreneurs, investors, and if desired international investment. That will depend in part on the type of cluster being created and the specific needs of that local system. They would consider how the 5 factors that impact growth as well as its entrepreneurial environment (as a package). The process becomes much easier if local, stage, and federal interests align to spawn a new industry or strengthen a current industry. Rapid innovation does sometimes bring forth radical new products and technologies that branch development into down new developmental paths (It may be possible to predict new industries based on the problems the market is facing, unique aspects of the cluster, and the current lines of scientific development.)
Key Points:
-Industries look at multiple factors market and customer
needs, government and regulatory support, access to infrastructure/services,
land availability and zoning, and participatory engagement.
-Clusters/cities can be looked like a whole system with positive
and negative attributes that can be compared on the market.
-The design of the cluster will determine what type of
industries are most likely to be attracted and flourish.
-Towns can market to industries they believe are best able
to grow and develop the whole cluster.
Kadlec, Ž. & Josip, H. & Bedeković, M. (2018). Attracting investment in entrepreneurial zones of small cities by creating preconditions for the development of small and medium sized enterprises. Interdisciplinary Management Research. https://www.researchgate.net/publication/368881896...
Shongwe, M.; Lukhele, T. & Zulu, H. (2024) Exploring the factors of enabling environments for business investment projects in rural communities: stakeholders’ perspectives. Frontier. https://www.frontiersin.org/journals/sustainable-cities/articles/10.3389/frsc.2024.1467635/full
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