October 11, 2009 in Business

Diverse ‘clusters’ put Spokane on the map

By The Spokesman-Review

Talk about “clusters” as an economic development tool, and the discussion always references finance, infrastructure, education and training. How many include “communal roots”?

Yet a new study of the stagnation of Atlanta’s information technology industry suggests all the money and education in the world might mean little if companies, their leaders and service providers are not bound together and to their communities in ways not measured by dollars and degrees.

Authors Dan Breznitz and Mollie Taylor found that even well-regarded companies like Scientific Atlanta were remarkably isolated. They looked at 691 Atlanta-area companies and found most had no connection to another. They did not acquire one another, they did not invest in one another. Even adding outside attorneys and independent investors like venture capitalists did not appreciably strengthen the informal communication networks that tie an industry together.

As a result, the study says, “There is no local entrepreneurial technological company of consequence.”

Almost one-half the most notable home-grown IT companies have left Atlanta or folded. The city has not had an independent IT company listed on NASDAQ since 2006.


Why bother with Atlanta?

Only because six years ago the head of the Georgia Research Alliance was in Spokane to explain how attracting the best researchers in their fields had made the city a hotbed of innovation, particularly in biotechnology. That star still shines. Atlanta hosted the 2009 BIO International Convention.

There is no lack of entrepreneurs. The Kauffman Foundation ranks Atlanta first among U.S. cities for entrepreneurial activity, and Georgia first among the states. Washington ranks 29th.

But the Atlanta study suggests there was a lack of attention, and understanding, of the IT industry and its challenges, even though some companies had been in the city for decades.

Any lessons for Spokane?

A study of clusters completed last spring by Eastern Washington University professors Vincent Pascal and Nancy Birch found most in Spokane are local – think health care services – as opposed to traded, with financial services the main example. The city has a greater diversity of clusters than most of its peers.

It has long been a truism the city does not suffer the lowest lows or enjoy the highest highs because of the diversity. The local nature of most clusters has insulated the area from some of the shocks to the national economy.

The expression “It takes a village” has become a punch line, but “communal roots” has much the same meaning. At least as far back as Expo ’74, and through the Momentum effort of the late 1980s, the city’s government, business and education leaders have done a good job keeping community in mind as they worked to increase the resources for economic development.

The cluster that counts is attention.

Award for Lighthouse

A note on an unrelated topic: Wednesday, the Seattle Lighthouse for the Blind Inc. received the Aerospace Company of the Year award from Gov. Chris Gregoire. Lighthouse employs 75 in aerospace-related jobs in Seattle, and recently added its first job in Spokane.

An elated Kirk Adams, Lighthouse president, called the award a “badge of honor.”

The recognition, he said, reaffirms the worth of blind people who daily endure society’s intentional and inadvertent put-downs. “It is respectable to be a blind person,” Adams said.

Enough said.

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