Journal Article

Industry clusters and economic development in the Seventh District’s largest cities

Abstract: In works such as Glaeser (2011) and Porter (1995), prominent economists have suggested that metropolitan areas are the key to economic growth. In this article, we examine the economic development strategies and performance of the largest metropolitan areas in the five states of the Seventh Federal Reserve District? Illinois, Indiana, Iowa, Michigan, and Wisconsin. The cities, from smallest to largest by metro population, are: Des Moines, Indianapolis, Milwaukee, Detroit, and Chicago. Theory suggests that cities that promote industry agglomeration (clusters) should be best positioned for growth. Industry agglomeration promotes synergies, whereby firms can be more productive by sharing resources (specialized labor and inputs) and benefiting from knowledge spillovers. Economic development professionals frequently use the concept of industry clusters to measure the type of firm agglomeration that exists within a city or metropolitan area.

Keywords: automotive clusters; economic growth; economic development;

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Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Economic Perspectives

Publication Date: 2014

Issue: Q II

Pages: 52-66