Industry Clusters: The Engine of Oregon’s Economy
Oregon’s economy is driven by traded sector industry clusters, concentrations of companies, competitors, and suppliers that specialize in particular products, services and markets. Traded sector companies are the heart of each cluster. They ring up sales outside of Oregon, bringing in fresh dollars that support families, local businesses, and government services. Essentially they are companies that export their products and services to other U.S. states and other countries around the globe. They are especially important to an economy 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.
What Are “Clusters?”
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 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.
What Are Oregon’s Key Industry Clusters?
There are about 20 industry clusters that we have grouped into five major categories: Activewear and Outdoor Gear Industries, Natural Resource Industries, Advanced Manufacturing Industries, High Tech Industries, and Clean/Green Technology Industries.
Natural Resource Industry Clusters. 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 wine 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.
- Agriculture
- Food Processing
- Forestry and Wood Products
- Nursery Products
- Tourism
Advanced Manufacturing Industry Clusters. 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.
- Aviation
- Manufacturing
High Technology Industry Clusters. 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.
- Bioscience
- Education Technology and Services
- Semiconductors and Electronic Components
- Software
Footwear, Outdoor Gear and Apparel Industry Clusters. 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.
- Athletic & Outdoor
Clean Technology Industry Clusters. 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.
- Green Building and Development
- Electric Vehicles and Sustainable Transportation
- Energy Efficiency
- Environmental Technology and Services
- Solar
- Wave Energy
- Wind Energy
Other Industry Clusters
- Creative Industries
- Defense