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    Clusters, Clusters Everywhere

    Regions jockey for their place in the gravy train

    The New York Times recently reported that energy is now the new new thing in Silicon Valley. This is news that other regions around the country, who are looking for a niche in the $1 trillion domestic energy sector, can't ignore. The big brains out on the West Coast don't always succeed, but they nearly always change the game.

    This highlights the dynamics of regional economic competitiveness emphasized by Michael Porter. What we're seeing shape up is a renewable energy value chain. In that chain will be raw material providers, processors, refiners, distributors, application providers, and the support services needed to support each link in the chain.

    Minnesota hopes to establish itself as a renewable energy producer, which in the jargon of the oil and gas industry, the Big Kahuna of the energy sector, would make it an upstream player. Silicon Valley wants to get into renewables, too, however because the Valley's will look to capitalize on its existing knowledge base, placing it upstream, midstream and downstream.

    Semiconductors are related to solar cell technology to produce electricity. Biotechnology can be applied to the processing and refining links by making biomass energy production more efficient. And the Valley's high-tech device base enables it excel in applications, such as Tesla Motors, the maker of the first electric powered sports car that is garnering plenty of attention.

    The buzzword around Silicon Valley is "clean tech," which is related to but different than "green" technologies. "Clean" tech is still meant to save the world, but it plans to do it on the back of technology. "Green" carries with it political and social connotations, and also has a tinge of Luddism to it anathema to techie-geek types.

    Undoubtedly other areas of the U.S. are ramping up their own alternative energy clusters and looking to build on existing specialized knowledge bases within local industry, universities, and, even, government (witness the biotech cluster in Maryland, next door to the National Institutes of Health). Although the outcome will bellcurve, regions must try. Economic development failures like Detroit give them the incentive to press on. GEO

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