Cluster-oriented economic development tends to focus on traded clusters because they serve national and global markets and have significantly higher levels of productivity, wages, and patenting.{{Chicago Metropolitan Agency for Planning, “Regional Economy and Clusters: Building on Our Strengths,” January 2017,}} Some research has also begun to explore the role and needs of industry clusters that serve local businesses and residents. These local clusters( A group of related industries and firms that sell products and services primarily to the region’s...
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provide the economic foundations that businesses in traded clusters rely on to operate. For example, such clusters provide most local healthcare services, education and training, utilities, industrial and vehicle repair services, and local commercial and personal services. These clusters tend to appear in metropolitan areas across the U.S. at concentration levels proportionate to a region’s population and the traded businesses they service.{{Mercedes Delgado, Micahel Porter, and Scott Stern. “Defining clusters of related industries,” Journal of Economic Geography 16, no. 1, 2015. 1-38.}}

Both traded and local clusters have discrete functions in the regional economy and distinct infrastructure, land use, and employment needs.{{Chicago Metropolitan Agency for Planning, “The Chicago region’s local industry clusters,” October 2015, }} Local business-to-business clusters, such as those selling industrial products and commercial services, depend on a transportation system that moves goods efficiently within the region. They also tend to boast higher levels of minority ownership and are well-represented in undeserved or lower income areas.{{Jonathan Holifield, Adam Kamins, and Teresa Lynch. “Inclusive clusters,” Economic Development Journal 11, no. 4, 2012. 29-35. See also “Linking Regional Economic Clusters with Target Urban Places,” developed in partnership by Mass Economics, RW Ventures, Bookman, Capraro Associates, and Jones Lang LaSalle.}} Additional cluster-oriented strategies — such as opening up institutional and corporate procurement chains to a more diverse set of suppliers — can reflect the broad set of opportunities within local clusters. Further analysis of the region’s local industry clusters will help formulate plans to address their challenges and opportunities.