Advanced Manufacturing Cluster: A Knoxville/Oak Ridge Opportunity

Something big is underway at Technology 20/20 with the Advanced Manufacturing & Prototype Center of East Tennessee, also known as AMP.  AMP is a program focused around developing an advanced manufacturing cluster in the Oak Ridge and Knoxville community that leverages regional assets and talent.  AMP’s partners include Oak Ridge National Laboratory (ORNL), Pellissippi State Community College, and The University of Tennessee Center for Industrial Services.  While originally announced in October of 2012, the effort is starting to gain momentum.

Why an Advanced Manufacturing Cluster?

The outsource movement of the past thirty years taught American business that foreign providers could handle manufacturing for a much lower price than domestic competitors.  This is particularly true of assembly line style production where a worked does a redundant task in a larger system.  While that mostly works for simple production (note, I’m aware that there are ethical and quality concerns), the market quickly learned that the cost savings of outsourcing some advanced and technical manufacturing was offset by other issues.  The last ten years in particular have seen example after example of major companies struggling with issues of quality in product delivery and reliability in supply chain from outsourced partners.  That has presented an enormous opportunity for domestic high-end manufacturing.

The Knoxville/Oak Ridge region has some valuable resources that play to an advanced manufacturing focus.  This includes the deep physical and intellectual resources of  the partners listed above.  I’m really optimistic about the ability of manufacturers to leverage ORNL’s research focus around energy and material science.  Knoxville also has a great location at the intersection of interstate’s 40 and 75, and the region has a number of companies that have a vested interested in advanced manufacturing.  On the talent equation, I think community college’s like Pellissippi State and university like Tennessee-Knoxville can produce a robust pool of talent than cover the talent needs of manufacturers.

What is Cluster Theory?

Cluster theory is a child of economic dating back to the late 1800′s that attempts to explain the potential value of local economies developing around concentrated specialties.  The goal is that as these clusters mature the region and the companies enjoy benefits of less competition and higher profits with niche focus, a steady and stable market, a developed and reliable supply chain, and more productive and profitable interactions with one another.  It’s pretty easy to see the results of regions that have benefited from cluster theory in practice –Nashville’s country music industry, Silicon Valley’s tech scene, Detroit’s automobile industry, etc.  While challenges and risks  do exist in cluster-driven economies — case-in-point, look at Detroit for the last decade — most economic development professionals and economists acknowledge the vital and significant role of cluster development in growing regional economies.  Harvard economist and former presidential economic adviser Michael Porter even identified cluster development as a critical part of sustainable competitive advantage.

That being said, I’m a big supporter of cluster driven economic development.

A Regional History of Cluster

In case you are curious, Knoxville isn’t a stranger to cluster theory.  In the last one hundred years, Knoxville has been known as both the Marble City, due to the business community that developed around the native marble of the region, and as the Underwear Capitol of the World, due to the large number of textile manufacturers operating out of the city.  Oak Ridge really came into existence as a cluster around nuclear research and the Manhattan Project.  The Atomic City continues to enjoy that legacy with the existence of the labs and a number of smaller industrial clusters around imaging, nuclear safety, and environmental remediation.

I don’t know about you, but I’d much rather be known for our advanced technology and manufacturing over underwear production.

I’d also like to credit Tom Ballard and the articles he has produced on Teknovation.biz on AMP and it’s director, Buzz Patrick.