9th ward economic engine

A Business cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field.  They increase the productivity with which companies can compete. Michael Porter, author of The Competitive Advantage of Nations, states three ways in which clusters affect competition.  One way is by increasing the productivity of the companies in the cluster.  Another way is by driving innovation in the field.  The third way is by stimulating new business in the field. Porter derives forces that determine the competitive intensity and therefore attractiveness of a market.  Attractiveness refers to the overall industry profitability.  An unattractive industry is one where the combination of forces acts to drive down profitability and the industry approaches pure competition.

Factor Endowment clusters are created because a comparative advantage they have is linked to a geographic position.  The alternative to clusters is Hubs and Nodes.  The cluster effect can be perceived as an urban agglomeration where most kinds of commercial establishments will tend to group themselves by category.  Examples of these types of clusters include the Silicon Valley in California with computer technology and the Napa Valley in California with wine production.

Science parks harness the combined power of education, research, and private investment.  The result is new jobs, new industries, and solutions to age-old problems of mankind.  They are sources of entrepreneurship, talent, and economic competitiveness and are key elements of the infrastructure supporting the growth of today’s global knowledge economy.  They enhance the development, transfer, and commercialization of technology.  The combination of three interacting elements: government, university, and private sector companies give parks their dynamism.  Strategically planned mixed-use campus expansions involve shared space in which industry and academic researchers work side by side.  These university-affiliated mixed-use campus developments are not simply real-estate ventures.  They embody a commitment by universities to partake in broader activities, offering companies high-value sites for accessing researchers, specialized facilities, and students, and promoting live-work-play environments.  Key features of these mixed-use developments include space for significant future research growth;  multi-tenant facilities to house researchers and companies; and housing, along with other amenities which are attractive to young faculty, post-doctoral and graduate students.

Is there a market for hurricane resistant-housing and innovative technology to improve building methods?  If so, can the 9th ward host a business cluster / science park and benefit by providing housing and employment opportunities?

The market:

Millions of dollars are being poured into mitigation research.  Just recently with Gustav and Hanna, universities including Florida International University, the University of Florida, and Clemson gauged the storm’s impact on structures and collected data on storm surge.  Budgets were provided by grants from the National Science Foundation, the State of Florida, and the private sector in this case.  The insurance industry has also backed research groups by funding research and testing centers.  One recent example includes Florida International University’s International Hurricane Research Center.  Another example is the Institute for business and Home Safety, a research facility in Tampa that is primarily funded by insurers and reinsurers.  The goal of the research is to provide materials and building practices that can reduce an owners losses.  Mitigation research has been studied and proven to play a significant role in reducing losses.  Insurers, regulators and lawmakers see wind mitigation as the best way to keep residents safe and home insurance costs affordable.  State funding for research is done so in the state of Florida because less hurricane damage contributes to Florida’s long-term economic health.  The Federal Alliance for Safe Homes(FLASH) is a nonprofit that started 10 years ago to build awareness about safety and mitigation for all types of disasters that can hit homeowners.  Homeowners who fortify their homes are rewarded by their insurers.  Florida state law requires insurance companies to offer hefty discounts of as much as 65% of premium for homes with shutters, impact-resistant windows, etc.  The key element to all this research is developing products and techniques that are cost-effective so consumers and builders will use them.

A Cluster in the 9th Ward:

The evidence and intuition strongly suggests that most entrepreneurs start-up companies where they happen to be located.  On top of all the risks and stress of a start-up, few want or consider it necessary to relocate.  Any attempt to form a cluster, rather than to leave one to go on to emerge organically, must either attract into the region people who will go on to form new companies, or encourage those already living locally to become entrepreneurs.  Existing clusters are good at doing both.  Experience suggests that successful clusters start themselves.  A key ingredient for any new cluster is the need for a few key individuals with successful track records as entrepreneurs (Brad Pitt?).  These individuals also bring funding with them, either directly through their own funding or indirectly through their contacts with venture capitalists.  A cluster also requires a link to a university (LSU, Tulane, UNO).  Universities can provide increased flow of ideas and funding opportunities.  Good infrastructure is also appealing (relatively little to no new infrastructure required in 9th).  Local networks that can share knowledge are at the core of a clusters success.  These networks can form critical links between individuals and can provide something of a safety net and lobby for change where needed.

The 9th ward is already showing characteristics of a cluster.  It is an area where new building methods are being implemented by an orgy of non-profits and private funding.  Key individuals are shaping the way the area is being developed.  Infrastructure already exists.  University contributions to the area come from all over the world.