Industry Hubs Can Benefit Your Business: How To Start Your Own

Industry Hubs Can Benefit Your Business: How To Start Your Own

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I firmly believe that getting support, advice and encouragement from other entrepreneurs—live, not just online in social networking venues—is crucial to a small business owner’s success (and sanity). So when I read a recent Wall Street Journal article about the concept of industry hubs, I was intrigued.

industry hub

Industry hubs are cities or regions where specific types of businesses are clustered. The concept isn’t new—Silicon Valley is probably the best-known industry hub and the Motor City (Detroit) was one of the first. But, the Journal reports that despite the lingering recession, new industry hubs are springing up ranging from sporting-goods makers in Ogden, Utah, to nanotechnology firms in Albany, New York.

Industry hubs often spring up naturally around natural resources or available labor. While many industry hubs are high-tech in focus, there are plenty that are not. For example, in my state, California, the Los Angeles area is home to a thriving garment industry.

The benefits of clustering together with companies in your industry are many, and include the support network I mentioned above. But there are also more tangible payoffs: One expert cited in the article who has studied the issue says industry hubs have higher rates of patents, business formation and pay higher wages.

One of the biggest benefits these days, of course, is that when small firms in an industry reach critical mass, people with money start to take notice. That means companies in an industry hub may have greater chances of obtaining financing, and are more likely to get assistance from community or government agencies that have an interest in seeing a local industry hub grow.

Government is getting into the act in a big way. Earlier this year, USA Today reported on a White House proposal that would identify 20 potential clusters to receive financial incentives. There’s also a separate program in which 16 federal agencies are seeking to promote existing industry hubs.

Are you in an industry hub? If not, what can you do about it (short of moving your business)? For small business owners who see the potential for an industry hub in their area, here are some steps to helping it grow:

  • Start the conversation. Find other entrepreneurs in your city or region who are in your same or a complementary industry. Start talking about how you can work together.
  • Form an organization. If you find kindred spirits, consider forming an organization that works to develop a full-fledged industry hub.
  • Tap into each other’s connections. Perhaps one member of your group knows people in public office while another knows grass-roots community leaders. Someone else might have ties to the finance community. Work your networks.
  • Get government involved. Public-private partnerships are key to helping many industry hubs thrive. See what your local government, economic development organization or other community groups are able to do for you.
  • Publicize. Get the word out about your nascent industry hub is easier than ever. Contact media and bloggers in your industry. The more people know about your hub, the stronger it will grow.

 

[“Source-smallbiztrends”]