BILL REQ. #:  H-1187.1 

READ FIRST TIME 03/10/03.   

     AN ACT Relating to cluster-based economic development; amending RCW 43.330.090; adding a new section to chapter 43.330 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature finds that:
     (a) Washington's quality of life, standard of living, and social and economic opportunity all depend on the vitality of the state's economy;
     (b) Economic development tries to reinforce the natural way by which strong foundations in the areas of human resources, capital resources, technology, tax and regulatory, advanced physical infrastructure, information and communication infrastructure, and quality of life strengthen the economy;
     (c) The strength and vitality of the state's economy depends on the competitiveness of the state's industry clusters;
     (d) Industry clusters can become a powerful magnet for businesses to locate in an area and create a spawning ground for start-up companies;
     (e) Industry clusters create large, diverse pools of experienced workers, attract suppliers who tend to congregate in their vicinity for increased efficiency, and foster a competitive spirit that stimulates growth and innovative strategic alliances; and
     (f) The state must first identify and understand the industry clusters before strategies can be developed to enhance their competitive position in the world.
     (2) It is the intent of the legislature to establish an industry cluster-based approach to economic development as a component of a statewide strategy to address economic growth and quality of life issues.

NEW SECTION.  Sec. 2   A new section is added to chapter 43.330 RCW to read as follows:
     (1) The department of community, trade, and economic development, or its successor agency, shall work with industry associations and organizations to identify industry clusters on a regional and statewide basis. The industry clusters may include, but are not limited to, aerospace, agriculture, food processing, forest products, business services, financial services, health and biomedical, software, transportation and distribution, and microelectronics.
     (2) In the identification of industry clusters, the department's activities may include, but are not limited to:
     (a) Conducting focus group discussions, facilitating meetings, and conducting studies to identify industry clusters, members of an industry cluster, the current state of the industry cluster, and issues of common concern of the industry cluster;
     (b) Supporting the formation of industry cluster associations, publication of cluster association directories, and related efforts to encourage the entry of new firms into the industry cluster; and
     (c) Providing methods for electronic communication and information dissemination among firms within industry clusters.
     (3) The department shall work with identified industry clusters, private sector organizations, federally recognized tribes, local governments, local economic development organizations, and higher education and training institutions to assist in the development of strategies designed to strengthen the competitiveness of the state's industry clusters. The department shall, on a continuing basis, evaluate effectiveness of the services provided to industry clusters using information gathered at the regional and statewide level.
     (4) As used in this section, "industry cluster" means a geographic concentration of interdependent competitive firms that do business with each other. "Industry cluster" also includes firms that sell inside and outside of the geographic region as well as support firms that supply raw materials, components, and business services.

Sec. 3   RCW 43.330.090 and 1998 c 245 s 85 are each amended to read as follows:
     (1) The department shall work with private sector organizations, industry clusters, local governments, local economic development organizations, and higher education and training institutions to assist in the development of strategies to diversify the economy, facilitate technology transfer and diffusion, and increase value-added production by focusing on targeted sectors. The targeted sectors may include, but are not limited to, software, forest products, biotechnology, environmental industries, recycling markets and waste reduction, aerospace, food processing, tourism, film and video, microelectronics, new materials, robotics, and machine tools. The department shall, on a continuing basis, evaluate the potential return to the state from devoting additional resources to a targeted sector's approach to economic development and including additional sectors in its efforts. The department shall use information gathered in each service delivery region in formulating its sectoral strategies and in designating new targeted sectors.
     (2) The department shall ensure that the state continues to pursue a coordinated program to expand the tourism industry throughout the state in cooperation with the public and private tourism development organizations. The department shall work to provide a balance of tourism activities throughout the state and during different seasons of the year. In addition, the department shall promote, market, and encourage growth in the production of films and videos, as well as television commercials within the state; to this end the department is directed to assist in the location of a film and video production studio within the state.
     (3) In assisting in the development of a targeted sector, the department's activities may include, but are not limited to:
     (a) Conducting focus group discussions, facilitating meetings, and conducting studies to identify members of the sector, appraise the current state of the sector, and identify issues of common concern within the sector;
     (b) Supporting the formation of industry associations, publications of association directories, and related efforts to create or expand the activities or industry associations;
     (c) Assisting in the formation of flexible networks by providing (i) agency employees or private sector consultants trained to act as flexible network brokers and (ii) funding for potential flexible network participants for the purpose of organizing or implementing a flexible network;
     (d) Helping establish research consortia;
     (e) Facilitating joint training and education programs;
     (f) Promoting cooperative market development activities;
     (g) Analyzing the need, feasibility, and cost of establishing product certification and testing facilities and services; and
     (h) Providing for methods of electronic communication and information dissemination among firms and groups of firms to facilitate network or industry cluster activity.
     (4) As used in this section, "industry cluster" has the same meaning as in section 2 of this act.