Regional cluster initiatives foster local networks of established firms, university researchers, regional economic organizations, investors and small businesses. Highly networked firms in regional clusters have been shown to have more innovation and production capacity than those same firms in non-clustered regions. Recognizing the challenges that small business innovators face in creating critical marketing, technical and investor networks, the Small Business Administration launched a 10-site pilot program to support their participation in regional clusters. Typical cluster evaluations focus on impacts achieved 5-10 years out, but this research sought to determine what could be learned from outcomes demonstrated in the first 1-3 years.  Evaluating the short and long-term impacts of clusters early on has little precedence, and using standard metrics is problematic when evaluating the capacity for innovation across diverse industries. As interest in government innovation continues to grow, it will be important to develop consistency and creativity in evaluation protocols.

The cluster evaluation is based on two years of data collection (2011 and 2012). It uses a mixed-methods approach, synthesizing information from quarterly and annual reports, and surveys and interviews of cluster administrators, large organizations and small businesses participating in the SBA-supported clusters. The study provides an understanding of how the initiative was implemented across 10 geographically and industrially diverse clusters, including seven focused on leading technologies in a variety of industries and three focused on industries of interest to the U.S. Department of Defense. It measures changes in key business and organizational outcomes. In particular, this evaluation focuses on both short- and intermediate-term outcomes that may be influenced by cluster activities and services (e.g., development of alliances among cluster participants, commercialization of new technologies, improved export and marketing strategies) as well as on longer-term outcomes (e.g., employment and payroll growth, business revenue growth, and new business formation). These longer-term outcomes are compared with various benchmark measures for comparable region/industry combinations derived from alternative sources.

The key results indicate that adaptable technologies for collecting and analyzing data ease the reporting burden on program administrators and allow elements of standardization and elements of uniqueness to emerge during analysis. These elements are discussed, as well as lessons learned on identifying specifications for the initial analysis system. The ability and pitfalls of the approach to report on long-term outcomes in early evaluation are also discussed.