The Midwest: Where things are made

Sometimes you have to view something from a distance to see the big picture more clearly. A new mapping tool that spotlights clusters of industry activity is revealing a fascinating picture of a dynamic Midwestern region with a diverse and vibrant array of manufacturing clusters fueling a regional economic rebound.

The tool, U.S. Cluster Mapping (www.clustermapping.us), plots data about types of industries on a map, revealing where "clusters" of various traded industries are prevalent. It was developed, with U.S. Economic Development Administration funding, by the Harvard Business School's Institute for Strategy and Competitiveness led by Prof. Michael Porter, in partnership with the University of Minnesota's Humphrey School and others.

Using this mapping tool, we can see the top 10 "traded industry clusters" in the Midwest region — Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin — based on employment specialization and share. Traded industry clusters serve markets in other regions or nations and are very important in fueling local economies.

So what are the Midwest's top industry clusters? People often think of food production. After all, when you travel through the region, dominant images include crops, pastureland, livestock, grain elevators, dairy barns and other agricultural features. This isn't known as the "breadbasket of the world" for nothing.

But while the No. 2 industry cluster in the region is indeed food production, the cluster of production technology and heavy machinery is No. 1, with all 12 Midwestern states specializing in it. In Minnesota, food production is an important industry cluster, but other clusters rank higher in employment specialization — metal mining, footwear, medical devices, printing services and information technology and analytical instruments.

Those who still think of the Midwest as the "Rust Belt" may be surprised by the strong showing of manufacturing in these rankings. The Midwest region is doing quite well supplying the capital goods required for a productive economy, such as production technology and heavy machinery, downstream metal products, trailers, motor homes and appliances, downstream chemical products and metalworking technology. This impressive diversity of successful clusters is one of the reasons Minnesota's unemployment rate is one of the lowest in the nation right now.

While the rankings are interesting, what's even more intriguing and important is figuring out what to do with this new cluster mapping information. That will be the subject of a regional conference involving 12 states and four Canadian provinces, to be hosted by the University of Minnesota's Humphrey School of Public Affairs on Sept. 29 and 30. Among many respected economic development thinkers participating in the conference will be Ecolab chairman and CEO Doug Baker and BNSF Railway executive chairman Matt Rose, in addition to Porter.

Questions abound: How can public and private leaders in the Midwest and Canadian provinces work together to help our strongest industry clusters succeed in the global economy? Instead of zero-sum "smokestack chasing" competitions, how can business and government leaders cooperate across state, province and industry lines to develop the skilled labor force, research, fiscal and regulatory structure, and transportation infrastructure necessary to retain and grow these industry clusters?

Those are the type of big questions that come to mind when you step back to survey the Midwest's economic big picture. It's a very encouraging one, but we need our public and private leaders to see it clearly as well.

Lee W. Munnich Jr. is a senior fellow at the University of Minnesota's Humphrey School of Public Affairs.