Oregon’s Industry Clusters and International Trade
by Tom DiCorcia, International Trade, Business and Trade Development Division, Oregon Economic & Community Development Department
Inside the Portland World Trade Center, international trade officers with the Oregon Economic & Community Development Department work with Oregon businesses to increase their sales overseas and promote Oregon as a place for overseas companies to set up business. Both activities are aimed at building stronger, more resilient businesses and communities. With a recent reorganization along industry clusters, the group’s emphasis these days is on strengthening the state’s business communities and globally expanding Oregon’s place in the world.
Industry clusters guide economic development
The industry cluster model is especially useful as a guide for economic development because it suggests that a relatively small investment of resources can have large impacts if they are applied in a way that reinforces an industry community. Oregon’s Silicon Forest is the modern-day poster child for a phenomenon that is at least as old as the industrial revolution – strong, internationally competitive industries tend to grow in geographic concentrations that encompass a major part of the industry’s supply chain. In his book “The Competitive Advantage of Nations,” Michael Porter of Harvard’s Institute for Strategy and Competitiveness describes in depth successful industry clusters such as printing machinery in Germany, ceramic tiles in Italy and robotics in Japan.
Despite the Internet and the advent of the virtual corporation, geographic proximity still matters because people value regular face-to-face communications both within the company and in the larger community. Venture capitalists strongly prefer that their funded companies be close by because they provide guidance as well as capital. For this reason, high-tech start-ups from New York, Massachusetts and even foreign countries move out West to get the capital and people they need to grow to the next stage. Regular, intensive interaction and circulation of experienced individuals provide the ideas, stimulation and ventures that make for a strong and vibrant industry cluster.
ONAMI’s success spurs new research center
An excellent example of this leverage is the Oregon Nanoscience and Microtechnologies Institute. ONAMI was created as a cooperative venture among state government and regional nanoscience and microtechnology R&D institutions and industry to foster research and commercialization in “small tech,” widely considered to be an enabling technology for the next generation of products in a number of industries. Investment by the state in ONAMI totaling $28 million to date has leveraged over $50 million of federal funding for research. Just as important, ONAMI’s leadership is able to coordinate the efforts of volunteers from academia and industry to organize seminars and conferences. Coordination among university labs and FEI make high capital expense equipment available to businesses on a pay-as-you-go basis, giving startups access to tools they would not otherwise be able to afford.
ONAMI’s success has provided the impetus for the establishment of a second signature research center. BEST, the Bio-Economy and Sustainable Technologies Center, will unite work on sustainable technologies taking place at Oregon State University, Portland State University, University of Oregon, Oregon Institute of Technology and the Pacific Northwest National Laboratory. Like ONAMI, there will be a focus on technology transfer to businesses that will create jobs and reinforce the strength of the cluster.
Advancing Oregon’s tech cluster strategy
On the international side, OECDD’s International Trade Team is playing a pivotal role in advancing the state’s industry cluster strategy. In the high technology arena the focus is on software, display technologies and semiconductor-related businesses – sectors that have some concentration in Oregon and that provide products that could find an international market. As the high-tech international trade officer, I work with Oregon businesses to increase their overseas sales, providing a range of services – from answering one-off questions to advising them on new market entry. I am able to draw upon a global network of resources including OECDD overseas offices in Tokyo, Seoul, Taipei, Shanghai and London. We also work closely with the US Department of Commerce with its global network and extensive calendar of trade events. Through this network we can help identify resources and activities tailored to the needs of the individual business.
Another important activity is reverse investment. By promoting the strengths of Oregon in a particular sector – such as open source software development – OECDD can attract overseas businesses to the region and adding strength and diversity to the cluster.
Opportunities for open source entrepreneurs in Japan
An example of how the OECDD cluster-focused activity has yielded early success stems from last May’s Linux World Expo in Tokyo. Event participants at the show were curious about why Oregon was at the open source software event. An “Open in Oregon” brochure distributed by Oregon’s Japanese Representative Office quoted local open source luminaries on the advantages of creating software in the state. One Japanese software integrator who stopped by the booth was preparing plans to open its first US branch in Silicon Valley. What the company learned led to a couple of exploratory visits to Oregon. This Japanese company will be opening its office in Beaverton this year. This new venture is being driven partly by a shortage of good open source programmers in Japan. Two more Japanese integrators are queued up to visit Oregon next month. Both are looking at opportunities to open offices here.
Oregon will return to Linux World Expo Tokyo again this year, at the end of May. This time we hope to have Oregon open source entrepreneurs there with us to share the news about Oregon and, of course, open up opportunities for Oregon businesses in Japan. Any companies interested in the Linux World Expo should contact me to learn more about this event, and the services we can provide through our global network. Contact Tom at tom.dicorcia@state.or.us.
About the author
Tom DiCorcia is an international trade officer in the Oregon Economic & Community Development Department focusing on the high technology sectors. Tom has more than two decades of experience working in the high-tech and software industry both in the US and in Asia. He has lived and worked for more than 10 years in Japan where he worked for two U.S. companies including Fuji Xerox and Arbortext. Tom is fluent in Italian and Japanese. Tom holds a B.S. degree in mechanical engineering from Stanford University and an MBA in international business from New York University.
Note: Linux World Expo / Tokyo 2007 will take place May 30 through June 1st at Tokyo Big Site. For more information, contact the author.
1 – Michael E. Porter, The Competitive Advantage of Nations. Free Press, 1998 (ISBN: 0684841479)
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