About Oregon’s Industry Clusters
Oregon’s economy is driven by traded sector industry clusters. These clusters — consisting of companies, competitors, and suppliers that specialize in particular products, services and markets — generate payrolls that sustain families, and in turn, local businesses and government services. The pages of this website describe some of Oregon’s leading industry clusters and what we can do as a community to help them grow and create more high paying jobs throughout Oregon.
Traded sector companies are those that ring up sales outside of Oregon, bringing in fresh dollars that support families, local businesses, and government services–essentially companies that export their products and services to other U.S. states and other countries around the globe. These companies are particularly important because they create new wealth rather than just recirculating the wealth that is already here.
While the focus of the Oregon Business Plan is on traded sector industries, all businesses add to Oregon’s economic well being. Local businesses, which make up the majority of Oregon enterprises — often support traded sector companies, add to the local quality of life, and provide entrepreneurial opportunities for citizens. They can also grow into traded sector companies as they expand sales beyond their location.
Industry clusters are geographic concentrations of similar and/or related firms that draw competitive advantage from their proximity to competitors, to a skilled workforce, to specialized suppliers,55 and a shared base of sophisticated knowledge about their industry.
Clusters illustrate why place still matters in the global economy. Businesses thrive in particular locations because their network of local connections to a specially skilled local workforce and the availability of strong local suppliers in proximity to one another generates business advantages that can not easily be imitated or competed away by low cost competitors.
The fact that businesses “cluster” may seem like a paradox in the age of the Internet. While many people have assumed that the emergence of the global economy has somehow diminished or reversed the importance of place—“in an information economy, anything can be anywhere,” it is asserted –careful studies have shown the reverse is true. Harvard Business School’s Michael Porter documented that the creation and maintenance of competitive advantage hinges most critically on clusters of highly competitive firms in a wide variety of industries in every developed country.
The list on the left describes some of Oregon key industry clusters. If you click on a cluster, you’ll be taken to a page that describes the industry, its economic contribution to Oregon and an assessment-from industry leaders–about what Oregon can do to help the industry continue to thrive here. While there are about 20 industry clusters listed to the left, to simplify our thinking about Oregon’s economy we have grouped these into 5 major categories: Activewear and Outdoor Gear Industries, Natural Resource Industries, Advanced Manufacturing Industries, High Tech Industries, and Clean/Green Technology Industries.
All of Oregon’s traded sector industry clusters contribute to our state’s economic performance and well-being. Our strategy isn’t about picking winners or whose most important, but looking to improve the competitive success of every industry. Clusters are a vehicle for organization, public-private collaboration, and action to identify and advance the state economy. Understanding our traded sector industry clusters and helping them succeed in Oregon presents our best opportunity to build sustainable competitive advantage and create high wage jobs for Oregonians and communities around the state.
Clusters can be used in a number of different ways to organize our thinking about the economy, to network groups of private sector firms for their mutual advantage, to efficiently promote clear lines of communication between the public and private sectors, and as a vehicle for organizing public policy. Clusters are not the exclusive province of any one organization or agency—they are a way we can all better understand our economy and work together to promote the common economic good.
Uses the information below and the pages on the left to develop an understanding of the industries that drive Oregon’s economy, their assessment of Oregon as a place to do business, and their ideas about how to make it even better. And remember:
Clusters are …
-Not just a public sector activity: clusters are about the relationships between private sector firms that share similarities and don’t depend on the public sector to define or make them. Clusters are also not a “program” for the state or community, but a way for all government entities and private firms to think about the way their activities influence the private sector of the economy.
-Not a creation: clusters can be supported by government policy, but cannot be created where none exist. The government does not pick winners, nor are clusters ranked or excluded, but a group working together.
-Not a “one size fits all”: there is not a single set of policies or activities that are required to be a successful cluster, and organization can be as formal or informal as works best. Too frequently, our economic development efforts present the private sector with a predetermined array of programs and services; clusters give us a way of crafting our efforts to develop each industry to its most pressing concerns.
Oregon’s traditional natural resource base is the platform for industry clusters in forestry and wood products, agriculture, nursery products, and food processing. Oregon’s tourism and hospitality industry is also bolstered by our great scenic endowment, outdoor recreation and culinary landscape.
The state’s resource-based industries are important contributors to Oregon’s export portfolio. Oregon exports about $3 billion in food products and about $500 million in forest products annually (Because of import restrictions elsewhere, nursery products are sold primarily inside the United States).
Businesses in each of these industries capitalize on Oregon’s strong reputation for quality and environmental integrity. In forest products and agriculture, some of the strongest growth markets are those that demand rigorous sustainability criteria. Oregon’s wine industry competes on quality at the high end of the world marketplace.
Despite concerns about the decline of manufacturing nationally, Oregon remains a place that makes things. Oregon’s clusters in metals, machinery and transportation equipment include firms making primary metals such as steel and titanium, producers of fabricated metal products ranging from knives to steel structures, and makers of a wide range of industrial machinery, barges, trucks, recreational vehicles, aviation components, and kits.
Oregon is an important center of high technology businesses, whose products include computers, semiconductors, electronic instruments and software. The industry is anchored by Intel’s operations in Washington County. The metropolitan area is home to hundreds of other high tech firms, many started as spin-offs from Intel, Tektronix, and Electro Scientific Industries. The state also includes a robust bioscience and medical devices industry.
Oregon is home to the world’s most recognized brands in footwear and sports apparel. Locally headquartered firms include Nike, Columbia Sportswear and the North American headquarters of Adidas. Other recreation related firms flourish in communities around the sate, from aluminum boat builders in Southern Oregon, to wind sports gear manufacturers in the Columbia Gorge and bicycle manufactures in the Willamette Valley.
Oregon’s commitment to alternative energy development and sustainability policies have made the state a leader in a range of emerging clean technology industries. According to a report by the Pew Charitable Trusts, Oregon now has a larger percentage of its workforce employed in clean energy technology than any other state in the nation.
- Biomass (see Forestry and Wood Products)
- Green Building and Development
- Electric Vehicles and Sustainable Transportation
- Energy Efficiency
- Environmental Technology and Services
- Wave Energy
- Wind Energy