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					OWIB Advisory Committee Working Definitions
(From Cluster Research Overview by Eileen Casey White)

Clusters
Generally, “clusters” are geographically-defined supply chains, with particular
emphasis on the relationships among the companies and their supporting institutions
(e.g., suppliers of product, knowledge, personnel, capital, and other resources). While
there are several variations described in the attached Selected Industry Cluster
Research summary, most agree that an industry cluster refers to the eco-system of
related firms around a specific set of applications or markets (Cortright, 2002).

         Traded clusters include those industries that compete across regions, and which tend to
          concentrate in a small number of locations. Traded clusters tend to be the engines of
          regional economic competitiveness, accounting for only about a third of
          employment but achieving much higher wages and productivity levels. (Porter, 2002,
          p. 10) xample: Agricultural Products, Transportation Equipment

         Local clusters involve activities serving almost exclusively local markets. These
          industries are present in every region in roughly the same proportions. Local clusters
          employ the majority of people in any regional economy, so their efficiency is critical
          for competitiveness in traded clusters to turn into regional prosperity. However, they
          cannot prosper over the long run without success in the traded clusters. (Porter,
          2002, p. 10) Example: Packaged Food Products



  Sector/Network vs. Cluster:

         “A cluster differs from a sector in its geographic boundaries; the inclusion of
          resource, supply, and knowledge chains; and the importance of how they are
          interconnected.” (NGA 2002, p. 9)

         “Although the terms „network‟ and „cluster‟ are sometimes used interchangeably,
          there are critical differences. Networks create economies of scale by deliberately
          sharing resources, expertise, or information. There is nothing necessarily deliberate
          about the naturally occurring efficiencies that are part of the cluster‟s business
          environment.” (NGA 2002, p. 11)

         “Clusters are best understood and used as regional systems. Sectors, which states
          have traditionally used for planning purposes and identifying economic
          opportunities, are treated mainly as concentrations.” (NGA 2002, p. 9)

         National Definition of Traded Sector: "The traded sector, comprised of those in-state
          businesses producing goods and services that compete with firms outside the state,



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         bring new wealth into an economy by substituting for the goods and services that
         otherwise would have to be imported". (Corporation for Enterprise Development)
         Examples: Electronic equipment manufacturing, Secondary Wood Products

        Oregon statute (ORS285A.010 (9)): "Traded sector" means industries in which
         member firms sell their goods or services into markets for which national or
         international competition exists."

        “Sector strategies, supported for more than a decade by foundations and some
         government agencies, are a precursor to cluster strategies. The distinctions between
         the two are not as great as the different nomenclature might suggest. Sectors that are
         defined by products and are limited by geographic boundaries – as most of the
         foundation-funded initiatives have been – can be alternatively defined as clusters.
         One only has to add the supply chains, specialized support services, social
         infrastructure, etc. that have not been included to turn „sector‟ into „cluster.‟ The
         main difference is that clusters can be defined by commonalities only loosely related
         to sectors.” (Rosenfeld, 2002, p. 18)

        Sector Initiative: Sector initiatives are industry-specific workforce development
         approaches that can help low-income workers and other job and skills seekers
         meet their skill training needs. Sector initiatives are important because they
         provide value to employers and strengthen the competitiveness of their specific
         industries, while creating pathways to employment, increased access to well-paid
         jobs and advancement opportunities for low-income individuals. Unlike
         traditional workforce policies, sector and other career advancement initiatives
         successfully engage employers in workforce development and are flexible enough
         to serve the workforce preparation needs of a wider population, as employers
         often require. ( National Network of Sector Partners, NEDLC, Spring 2003)


Living Wages: There are many definitions for various state, federal and local programs.
 For purposes of the OWIB Advisory Committee’s work, HB2302 requires that
 employers who receive training dollars from the fund pay wages that are at or above
 median for the county in which the jobs are located.




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