Transactional Subfactors of Economic Cluster Development (Delta County Michigan)

 As we work through the cluster mapping we find the there are sub factors that impact of flow from one organization to another. The benefit of mapping these flows is that we have the ability to measure that flow on a micro analytic level and see how innovation in clusters is formed when different legs of these connections increase or decrease. This fits within the transactional concept where faster connections often lead to faster growth and innovative efforts through better resource access and allocation. Better understanding of mapping clusters and its subfactors can lead to better analysis and portability.

Mapping Cluster Transactions

Understanding how microtransactions between different entities within the cluster can help to further assess the flow of information, people, resources, patents, contracts, etc... to gain a better understanding of how they interact to create new industries and jobs. If they do not move and adjust, or entrepreneurs don't have an idea on how to make them move, they will be limited in their ability to adapt in a way that masters the market. 

According to Prof. Michael E. Porter from the Institute for Strategy and Competitiveness (ISC), Harvard Business School states, "Cluster mapping describes the process of systematically measuring the presence, size, and performance of clusters across locations, applying common definitions of cluster categories derived from evidence about patterns of location-specific linkages and spill-overs across locations." (Porter, 2017, page 6, para1).  (Seriously worth the read! 👀)

How does it work?

One of thee easiest ways to show this is through building off of the bigger map in previous articles. 

1. Article: DC Shipping

2. Article: DC Tourism Micro-Manufacturing

3. Article: DC Multi-Cluster Dev.

The linkages can be measured to determine the pace and change of activity. Researchers who took interest in these ideas would physically have to go around and measure them in pen and paper. Companies didn't track this information (and still struggle with it) leaving real time review helpful. Big data offers new opportunities to see how clusters work in real time but also allows companies to track when prompt how they are working with others in the clusters (in and outside the cluster).

Harvard and the US Economic Development Administration have developed a broad cluster mapping database that covers the U.S. and other international lactations like Europe.  The U.P.. Michigan has a relatively low innovation ranking of 4.29 (likely from the traditional industries) indicating that improving innovation in Delta County could be a big windfall for locals (not to mention increased profitability of growing businesses). You can see U.P. district dubbed as Marinette WI Economic Area HERE. 

The U.S. Econ. Dev. Admin. categorizes industry into broad categories. A broad approach is used because they are dealing with national data; however, local areas (i.e. Delta County) will have their own unique make up. Local clusters connected to the international markets may also morph new industries through attracting investment, capital and other resources in a way that creates a sustainable growing system that could lead to new industries (based on the flow and influences on subfactors). 

What is a Transactional Subfactor?

The subfactor are measurements used to determine interaction of various elements within the system. For example, it is not enough to put tourism and micro-manufacturing together without understanding how it influences other industries such as community colleges (i.e. Bay De Noc Community College), mining, shipping/distribution, etc... No business works in complete isolation so businesses exist within a network/community of other businesses that influence each other.

One cannot determine how these elements act and interact unless we measure these transactional subfactors (transactions) that occur between these businesses in terms of volume, direction and value. In this example, I'm using 1. Human Spill Over/Intellectual capital, 2. Financial Transactions., 3. Cluster Specific Resources, 4. Add More. You can add as many as you can measure and find (time, emails, phone calls, etc..)

If one could measure the different transactions they would have a fairly solid understanding of how these businesses (and suppliers) influence the growth/decline of the entire cluster and hub. For example, a government grant (could also be business investment, FDI, crowdsourcing, philanthropy, etc...) to the community college might draw in more talent and in turn influence the human capital (research, graduates, etc...) talent for local business to draw on. How such an influx of resources is measured is through the transactional subfactors. 

(We are only limited by what we can measure in the deep neuroeconomic choices that lead to global economic advantage through finding new digital pathways for needs fulfillment. See Article: DC Needs and how those needs can be attracted and retained through proper marketing. See Article DC NeurE.)

Creating this understanding (i.e. Delta County) and how to improve the innovative capacity of the area leads to policy decision making in other areas. What can be accomplished in one area can be accomplished in another. If the subfactors lead to a new discovery we may be able to develop other locations and spark innovation to potentially create whole new industries unseen in the market as of today (I wonder what that would mean for U.S. rejuvenation?). Allowing the next platform (i.e. Digital Economy) to develop will create whole new avenues of needs gratification.

(This is part of a larger Theory of Transactional Clusters which offers a slightly different vantage point of innovation. While its not finished it is in close alignment with leading cluster theories and research. Science works in a community of researchers and shared knowledge improves when different researchers approach the same problem with varying methodologies. If nothing else it could be seen as a slightly different literature justification for something the that was introduced in 2002 and available for practitioners 2010. You can see some pretty cool stuff by other researchers HERE. I started mine in late 2012 in relation to San Diego fishing industry and groups interact. However, where there are difference there are opportunities better understand how two different perspectives of the same phenomenon can lead to insight. I messed around with it for 8 years...maybe there is some benefit. I'm not done yet. If not it was fun! 😕🤷 HERE)

Porter, M. ( June, 2017 ) Cluster Mapping as a Tool for Development. Harvard  Business School.  Harvard Business School. Retrieved January 26th, from https://www.hbs.edu/faculty/Publication......