Disrupting the Market Life Cycle
Unless intentional change is made, markets and industries follow similar cyclical patterns over time. Below are three case studies on markets who created disruption to break the cycle.
Research Triangle Park (RTP)
Pre-WWII, North Carolina’s economy was heavily dependent on textiles, tobacco and furniture manufacturing. By 1950, these sectors were in steep decline. North Carolina ranked 47th out of 48 states in per-capita income and suffered from severe ‘brain drain’ as university graduates fled the state.
In the early 1950s, university leaders in Raleigh-Durham and Chapel Hill began exploring ways to coordinate research undertakings, leverage the region’s economic strengths, and retain graduates in the state. Around the same time, local industry leaders and developers recognized the growing mis-match between the skills of university graduates and the lack of employment and career opportunities.
1956: Planning & Action
With buy-in from local industry and academia, Governor Luther Hodges commissioned a study exploring the feasibility of establishing a state-of-the-art research park in the region. In 1956, The Research Triangle Committee (now known as the Research Triangle Foundation) was formally incorporated with the goal of making the research park a reality.
1958 – 1970: Reemergence
The Foundation raised $1.5 million from private investors to make the first land purchase for the park, with the state agreeing to fund infrastructure and university development at the site. In 1959 Research Triangle Park—a name derived from the geographic triangle formed by North Carolina State University, Duke University and University of North Carolina—was born. Simultaneously, the three universities established the Research Triangle Institute (now known as RTI International), a non-profit contract research corporation and RTPs first tenant.
1970 – 2021: Growth
RTP would soon be recognized as a hub for collaborative research that would attract forward-thinking firms and government agencies. By 1970, RTP tenants would include the U.S. Forest Service, IBM, NIH, and Burroughs Wellcome (now GlaxoSmithKline).
The park’s success continues to this day. RTP is now a globally recognized hub for pharmaceuticals, medical devices, biotech and microelectronics, as well as a driver of startups and technology transfer. The park is home to over 300 companies and 55,000 workers. Since 1976, RTP tenants have received nearly 4,000 patents. The broader Research Triangle is currently home to over 350 startups.
startups are currently based in the park
workers are employed at over three-hundred companies in the park
patents have been granted to park tenants since 1976
The Water Council
20th Century: The Decline
By 1900, Milwaukee become the world’s largest supplier of leather-manufactured products and one of the largest global producers of beer (two water-intensive industries) thanks to abundant water and wheat crops. But by the end of the 20th century, these industries had become symbolic of the region’s decline due to changing market dynamics, labor issues, and foreign competition.
2005 – 2009: PLANNING & ACTION
In the mid-2000s, local leaders began searching for new “driver industries” to spur Milwaukee’s economic resurgence. They soon recognized that a breadth of local firms in different industries had a common emphasis in water technology. In 2007, Rich Meeusen and Paul Jones (CEOs of Badger Meter and A. O. Smith, respectively) convened the first annual Water Summit with over 60 local businesses and civic leaders in attendance. Members began holding quarterly meetings with the unified goal of making Milwaukee “the Silicon Valley of water technologies.” In 2009, the group established a new member-funded non-profit organization—The Water Council.
Around the same time, council leadership approached the University of Wisconsin-Milwaukee with the idea of establishing a new school which would focus on water technology commercialization and talent production. The newly established UWM School of Freshwater Sciences would be the first of its kind in the U.S.
2010 – 2015: REEMERGENCE
In the years that followed, the region notched key accomplishments in their efforts to further build legitimacy and recognition of Milwaukee’s water cluster. First, the City of Milwaukee applied to become designated as the 14th member of the United Nations Global Compact Cities Programme. This proved critical in generating global interest and opening doors to other water technology leaders in Singapore, Israel, Sweden, France and the Netherlands. Second, with funding from the U.S. EDA, the Water Council and UWM published a joint report corroborating Milwaukee’s extensive expertise and position in the global water market.
In 2013, the Water Council established a physical presence in the heart of Milwaukee. The Global Water Center, a 98,000 square feet, seven-story building with over 40 tenants, now functions as the physical heart of the water technology cluster. The center earned its first major relocation in 2015, when Zurn (a maker of plumbing fixtures) moved their global headquarters from Erie, PA.
2016 – 2021: Growth
The Milwaukee water cluster includes nearly 250 water technology firms and a global leadership network of over 200 members from 20 states and 10 countries.
water tech firms are centered in Milwaukee's water cluster
member global leadership network makes up the water council
countries & 20 U.S. states are represented in Milwaukee's water cluster
Clemson University International Center for Automotive Research (CU-ICAR)
1945: The Decline
By the early 1900s, the Greenville-Spartanburg region was recognized as the “Textile Center of the World.” Yet the post-war era would see the textile industry gradually erode because of overseas competition and automation. By 1945, the Greenville-Spartanburg region’s textile industry was in a continual decline, leading local and state leadership to begin pushing for economic diversification with a focus on advanced manufacturing.
1990 – 2003: PLANNING & ACTION
Leaders saw a transformative opportunity when BMW began scouting locations to build their first manufacturing facility outside of Germany. South Carolina had been home to global automotive suppliers like Bosch, Bridgestone and Michelin. Leveraging the region’s auto-relevant capacities in textile and tire manufacturing, a strong state technical college system, proximity to a deep-water port in Charleston, and a $150 million incentive package, South Carolina Governor Carroll Campbell led efforts to attract BMW. These efforts paid off in 1992 when Spartanburg was selected over 250 other potential locations.
South Carolina’s automotive cluster arrived with a bang and big changes were needed to maximize its potential. A commissioned report by Michael Porter’s Monitor Group found that a limited supply of skilled workers and degree holders and low levels of collaboration among local suppliers around process innovation were key barriers to growth.
2003 – 2007: REEMERGENCE
Recognizing that ongoing engagement was needed to maximize BMW’s potential in the region, nearby Clemson University’s College of Engineering proposed a partnership with BMW to aid in R&D and workforce development for the automotive cluster. To support these efforts, the South Carolina General Assembly appropriated $200 million to match non-state investment in endowed professorships at state universities and passed an additional $70 million in bonds to aid infrastructure development for Clemson University’s new research facility. With this support, CU-ICAR was established in 2003 to “be the premier automotive research, innovation, and educational enterprise in the world.” By 2007, CU-ICAR was offering the first M.S. and Ph.D. programs in automotive engineering in North America.
2010 – 2021: GROWTH
The automotive cluster has seen rapid success in recent years, aided by the opening of Inland Port Greer in 2013, which provides even faster connection to the Port of Charleston. In 2015, Volvo announced a $500 million investment in a new manufacturing facility in Charleston. Just two years later, BMW announced a $600 million expansion to its Spartanburg plant, bringing an additional 1,000 jobs.
The Greenville-Spartanburg auto cluster now consists of over 230 original equipment manufacturers (OEMs) and suppliers. BMW’s total investment in the region now tops $9 billion, driving the creation of 9,000 jobs. CU-ICAR has attracted over $300 million in public and private investment and has graduated nearly 600 M.S. and Ph.D. students, a quarter of which are working in South Carolina.
public & private investments made in CU-ICAR
M.S. & Ph.D. students have graduated from CU-ICAR
OEMs & suppliers are located in Greenville-Spartanburg's auto cluster
Regional transformation through innovation
All were focused on mature industries that were subject to globalization and disruption
Economies went through market cycles because of the ways industries grow and are replaced
Each market assembled a coalition of business, education and the public sector and were in lockstep on the vision for their region
Partnerships with education were used to fuel the economy of the future
Proactive innovation minimized disruption