Skilled Human Capital Availability and Traded Industry Cluster Strength: Establishing an Empirical Link

Joyce A. Campbell,Timothy L. Faley&Glenn A. Metts

Abstract

A new construct is suggested to explain the strength of certain industry clusters as a function of regionally awarded bachelor and master’s degrees in fields related to those clusters in an attempt to establish an empirical link between highly skilled human capital availability and the strength of traded regional clusters.  The study uses regression analysis and time series data from existing sources to determine the relationship between bachelor and master’s degrees and strong traded clusters. Such a link does not exist in the literature today and could accelerate the transition of cluster theory to practical application for economic development.  One potential application is a creative and innovative industry cluster design tool that provides investors and economic developers a low cost, qualitative method for identifying latent industry clusters.  This, and other potential cluster development tools, assume a theoretical link between cluster success and identifiable factors of production.  However, none of the cluster research to date has quantified the relationship between the factors of production, including highly skilled human capital availability, and cluster strength.  Empirical evidence of a link between regionally awarded bachelor and master’s degrees and the strength of related clusters in those regions would provide a justification for systematic coordination between educational program design and regional economic development policies and funding.