Business Cluster Development: Creating Industry Concentrations

Recruiting one business at a time can feel like progress, but single businesses often struggle in isolation. A café does better next to a bookstore or local shop than it does on its own—it benefits from shared customers and creates a “destination” feel. That’s the power of a cluster: businesses grouped by theme or audience reinforce one another, making each more successful. For small towns with limited budgets, clusters stretch every effort further by building momentum over time.

Spotting Opportunities for Clusters

You don’t need complex studies to identify cluster opportunities—just pay attention to what’s already working:

• Local strengths: Two or three antique shops could become an antiques hub; local farms can anchor a food/agritourism focus.

• Visitor patterns: If tourists already come for a trail or historic site, build complementary clusters around those visitors—lodging, outdoor gear, dining.

• Business insights: Ask owners what their customers want that isn’t available yet.

• Regional gaps: If residents drive 30 miles to the nearest taproom, maybe your town could fill that need.

Patterns matter more than one-off businesses. Small towns often already have the seeds of a cluster—they just need attention and nurturing.

Attracting Complementary Businesses

With limited resources, focus recruitment tightly:

1. Make a simple business wish list. Choose 3–5 business types that would strengthen your cluster.

2. Encourage local expansion. An existing entrepreneur may add a second or related venture.

3. Lower barriers. Speed up permitting, offer small façade grants, or allow pop-up shops for testing ideas.

4. Celebrate success. Publicize each business that fits your cluster and show momentum is building.

This focused approach allows clusters to grow steadily even with minimal capacity.

Creating the Right Environment

Clusters thrive in welcoming environments. A few simple actions help:

• Spruce up downtown with benches, lighting, or planters.

• Program regular events (farmers markets, concerts, community nights) to draw people in.

• Encourage collaboration—like joint promotions between restaurants and shops.

• Use vacant storefronts creatively for pop-ups or shared retail to keep spaces active.

An environment that feels alive attracts entrepreneurs looking to invest.

Measuring Cluster Success

You don’t need complex metrics—just notice:

• Growth in the number of businesses in your cluster

• Declining storefront vacancy downtown

• More pedestrian traffic on evenings or weekends

• Visitors beginning to see your town as “the place for ___”

Each new step creates momentum that makes the next recruitment effort easier.

Closing Thoughts

Clusters offer small towns a smarter way to grow—by concentrating businesses that naturally support one another. Even with limited staff or budget, you can build on local strengths, recruit complementary businesses, and foster an environment where clusters thrive.

At HSC, we specialize in helping Oregon towns take these early steps further—developing clear, comprehensive strategies for long-term revitalization.

If your town is ready to strengthen its local economy through cluster development, Contact HSC to help you chart the path forward.