Regions should muster clusters.

• Position: Economic Outlook

Legislation passed by the General Assembly in 2002 requires the state's seven economic-development partnerships to produce five-year plans. The 23-county AdvantageWest partnership, working with the Office of Economic Development at UNC Chapel Hill, completed its plan in April. Among its goals are growing and supporting "clusters of innovation" around regional niches such as tourism, health care and advanced manufacturing, Leslie Scott is a co-author of the report and former associate director of the OED.

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BNC: What is a cluster?

Scott: It is a collection of companies that not only may buy and sell from each other but share common inputs such as labor, capital or equipment. A cluster incorporates innovation and is more dynamic than just an industry. It encompasses companies in multiple industries.

What are the advantages of a cluster?

The simplest example might be that the existing industries get together and figure out what is missing locally among the suppliers, markets or services they most use and then work to recruit another industry to fill that need or find a local entrepreneur or university innovator who does it or who can provide it.

Wouldn't the companies be competitors?

Even though on a day-to-day basis these companies may compete with each other, if they are smart they recognize that they have some common needs and that if they come together as a cluster it will help all of them become more competitive.

How so?

Companies in similar types of businesses that buy and trade with each other are going to have common needs for the type of labor force they need trained and possibly for the type of legislation or regulatory policies that would help them with certain types of technology or capital equipment.

What's the urgency?

It is smart as a regional economy to tell the market what you are trying to do rather than just say, "We are here to receive you if you come to us." It's almost as though you have to put a stake in the ground and say, "This is who we are," instead of saying, as I think a lot of places have said, "You tell us what you want, and we'll try to be responsive."

Why doesn't that work?

There isn't enough time to put the necessary infrastructure in place. What the plan does is give everybody their marching orders about what we are getting ready for. That doesn't mean if some other great company comes along they are going to turn it away. It means they are specifically ready with specialized types of...