A Manufacturers Alliance for Productivity and Innovation study commissioned by the Southern Governors’ Association, claims that a cluster strategy for regional development is “perfectly tailored” for the south.
The study, Advanced Manufacturing in the American South: An Economic Analysis Supporting Regional Development, suggests a regional approach would be beneficial “given the complexity of advanced manufacturing supply chains, the need for public investment in basic science to support innovation, and the need for close alliances between research and industry.”
“For years the states in the American South have competed with each other, but we have moved into a new era where we not only compete with each other and other states in our United States, we’re competing with the world,” Kentucky Governor Steve Beshear said.
“We can compete better if the region comes together on advanced manufacturing and presents a united front.
The study, which analyzed seven states to reflect the 16 states and two territories represented by the SGA, found:
- A cluster strategy of economic development is the appropriate framework for promoting the evolution of a strong advanced manufacturing sector in the American South and creating the beneficial spillover impacts for the broad regional economy.
- Innovation deficits and labor force gaps are the biggest challenges but are not insurmountable. Well-placed investments in the development of science and technical education will likely yield measureable returns.
- The Southern states have been effective in promoting a low-cost strategy of economic, and particularly manufacturing, advancement. This strategy needs to be supplemented by investments that will incentivize value-added in the production process, an element of business competitiveness as important as low costs.
- A strategic policy approach should be developed that places advanced manufacturing in the broader context of regional economic development needs. Such a strategy should be inclusive and recognize the federal, state, and local governments that impact economic vitality in the American South.
- While the region affords the potential for the specific cluster development needed for advanced manufacturing evolution, related policy needs to address human capital challenges, infrastructure, technology adoption, and research and development.