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The Power of Industry Clusters

A worker inspects the wiring on a Chrysler SUV as it moves along the assembly
line at the Jefferson North Assembly Plant in Detroit Michigan.

A worker inspects the wiring on a Chrysler SUV as it moves along the assembly line at the Jefferson North Assembly Plant in Detroit Michigan. Photograph by Geoff Robins/AFP/Getty Images

Industry “clusters” have been around for a very long time, serving as a catalyst for economic growth. Think: Detroit in the U.S. auto industry’s heyday, Pittsburgh when steelmaking was king, Silicon Valley for tech, Research Triangle Park, Wall Street, and even Hollywood. They are all examples—past or present—of the phenomenon.

Perhaps one reason we don’t hear more about clusters is that the term sounds so unsophisticated. To my ear, cluster sounds clumsy; synergy sounds so much better—and says much more about the nature of clusters, why they form, and their advantages.