Cluster basics: Cluster Development in Practice - Twelve Steps
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This document outlines 12 steps for cluster development based on Ifor Ffowcs-Williams' experience helping clusters. It begins with convening key stakeholders to analyze the cluster and form a leadership group. They develop a vision of the preferred future. Benchmarking visits and strategic agendas focus on collaboration, skills, and global connections. Facilitators play a central role in building trust and linking clusters over time. The goal is to continually upgrade competitiveness by deepening specializations and connections locally and globally.
Cluster basics: Cluster Development in Practice - Twelve Steps
- 1. . Cluster Development in Practice: Twelve Steps The Competitiveness Institute 11th Global Conference Cape Town, South Africa October 2007 Ifor Ffowcs-Williams Cluster Navigators Ltd New Zealand
- 2. . Cluster-based economic development Moving from clumps & clutter to integrated innovation systems
- 3. . Clumps & Clutter v. Innovative Clusters Clumps of firms • Local agglomerations of self-contained, stand alone, vertically integrated, isolated firms; • Little trust, limited interaction; • Little out sourcing, subcontracting, collaboration • Geographic but not social proximity
- 4. . Clumps & Clutter v. Innovative Clusters Clumps of firms • Local agglomerations of self-contained, stand alone, vertically integrated, isolated firms; • Little trust, limited interaction; • Little out sourcing, subcontracting, collaboration • Geographic but not social proximity Clutter of public agencies • Silos with individual (divergent?) development agendas for the cluster • Absence of teamwork, alignment, trust • Remote from the private sector • Priorities set in isolation; • And ever changing
- 5. . Innovative Clusters Common elements 1. Deep specialisation, competencies • Supported by public investments, academia 2. Local buzz: dense networking • Rivalry yet collaboration, co-opetiton • Rapid movement information • Teamwork between firms • and with university, government agencies • Leadership, tight alignment 3. Global pipelines • Connections beyond the region • Attracting customers, new investment…
- 6. . Innovative Clusters Common elements 1. Deep specialisation, competencies • Supported by public investments, academia 2. Local buzz: dense networking • Rivalry yet collaboration, co-opetiton • Rapid movement information • Teamwork between firms • and with university, government agencies • Leadership, tight alignment 3. Global pipelines • Connections beyond the region • Attracting customers, new investment…
- 7. . Innovative Clusters Common elements 1. Deep specialisation, competencies • Supported by public investments, academia 2. Local buzz: dense networking • Rivalry yet collaboration, co-opetiton • Rapid movement information • Teamwork between firms • and with university, government agencies • Leadership, tight alignment 3. Global pipelines • Connections beyond the region • Attracting customers, new investment…
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- 9. . Cluster Development The How • Creating a collaborative, demand driven, process • For starting a clustering initiative, or • For renewing, revitalising a clustering initiative
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- 13. . Resource cluster development for the long haul • Take a 5-10 year perspective • Primary need is the facilitator: • Relationship builder, broker, neutral corner • Central to this role is knowledge of key firms and support infrastructure • Facilitator is much more than a ‘Project Manager’
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- 15. . Cluster boundaries Take care on two dimensions! 1. Geographic dimension • Clusters don’t respect political borders • Boundary may be ‘one hour’s drive time’ 2. Industry dimension • Clusters include support firms, soft infrastructure… broader than an ‘industry’
- 16. . Clusters: Building on specialisations US Baby Silicons: each differentiated San Francisco ‘Multimedia Gulch’ Internet activity concentrated on digital media and B2C. Los Angeles ‘Digital Coast’ Strongest Internet segments: Content services, alternative media Chicago ‘Silicon City’ B2B segment, leveraging the city’s strong industrial expertise. Miami ‘Silicon Beach’ Hub for Latin American Internet companies New York ‘Silicon Alley’ Financial services, new media leveraging New York’s traditional industries.
- 17. .Quote Courtesy Tom Peters
- 18. . OR Quote Courtesy Tom Peters
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- 20. . The Cluster Muster High profile, kick-off public meeting Rounding up the ‘usual suspects’ Objectives: • To publicly announce the initiative • Explain the reasons for selecting this sector • To introduce the facilitator(s) • To request the cluster’s stakeholders to be available for an early 1-on-1 meeting
- 21. . Step 3 Initial cluster analysis Building the base Two thrusts: 1. Initial competitiveness diagnosis, fact based, understanding cluster’s current situation: structure, scale, opportunities, constraints, culture ...
- 22. . Step 3 Initial cluster analysis Building the base Two thrusts: 1. Initial competitiveness diagnosis, fact based, understanding cluster’s current situation: structure, scale, opportunities, constraints, culture ... 2. Establishing platform for action Introducing the process; motivating key stakeholders to participate; identifying potential leaders ...
- 23. . History matters! Understand the cluster’s foundations • How did the cluster start? • How did it grow? What changes? • What have been the cluster’s knowledge flows? • Development of links, trust • Level of social proximity? Subcontracting? Interdependencies? Joint actions? University activity? • Development of global connections • Exports? FDI? Internationalisation?
- 24. . History matters! Understand the cluster’s foundations • How did the cluster start? • How did it grow? What changes? • What have been the cluster’s knowledge flows? • Development of links, trust • Level of social proximity? Subcontracting? Interdependencies? Joint actions? University activity? • Development of global connections • Exports? FDI? Internationalisation?
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- 26. . Step 4 Forming the Leadership Group Active clustering needs: • Public commitment from preferred leaders who understand and care about the big picture • A Group with a balance of skills, able to work as a team Facilitator has a key role in establishing Group
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- 28. . The preferred future The Vision Building on the cluster’s current competitive position … with a challenge, a s t r e t c h factor
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- 30. . Preferred future ICT, Cape Town Cape Town as the IT gateway and training centre of Africa
- 31. . Bangladesh knitwear cluster Initial preferred future, 2010 • Bangladesh is a world-class supplier of quality knitwear. • We have earned a reputation for service, product innovation, market understanding. • Exports have doubled to $5-6 billion, with strong growth in the US market.
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- 33. . Standing in the Future Identifying the Stepping Stones • Looking back from the future: Back casting • Not a continuation of the present (Forecasting)
- 34. . Example Bangladesh Knitwear cluster workshop
- 35. . Bangladesh Knitwear stepping stones Conclusions from two workshops Export marketing: USA focus Training programs: leaders to operators Improved support from banks Invest in joint facilities and services Improve Utilities (e.g. electricity) Improve transportation and logistics Develop culture of co-operation Comply: US codes of conduct Develop culture of innovation $5-6 Billion in 2010
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- 38. . Cluster launch Lake Katwe salt cluster, Uganda
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- 40. . Benchmarking visits Example: Norway’s Mountain Tourism cluster visit to Banff, Canada • Identify an appropriate (model) reference cluster • Benchmarking visits provide a collaborative learning opportunity • Business + public agencies + academics sharing their learning • Builds connections, trust, social capital amongst the travellers • B2B links often develop during a visit
- 41. . Benchmarking visits Example: Norway’s Mountain Tourism cluster visit to Banff, Canada • Identify an appropriate (model) reference cluster • Benchmarking visits provide a collaborative learning opportunity • Business + public agencies + academics sharing their learning • Builds connections, trust, social capital amongst the travellers • B2B links often develop during a visit • Visits can provide motivating data shocks
- 42. . Ocean Technologies (St. John’s) Ag-Biotech/Nutraceuticals (Saskatoon)Astrophysics (Victoria, Penticton) Fuel Cells (Vancouver) Medical Technologies (Winnipeg) Photonics (Ottawa) Biopharmaceuticals, Industrial Materials (Montreal) Life Sciences & Wireless (Halifax, Sydney) e-Business (Fredericton, Moncton, Saint John) Aluminium (Ville Saguenay) Aerospace (Ottawa, Montreal) Nanotechnology (Edmonton) Sustainable Urban Infrastructure (Regina) Nutrisciences (Charlottetown) Benchmarking against other relevant clusters
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- 45. . Step 10 Long-term, strategic agenda More substantive, more strategic initiatives Moving beyond the initial activity…the ‘low hanging fruit’ e.g. • Technology & SME related • R&D centers; Centers of Excellence; Incubation facility • Technology Park; One-stop-service centre • University links; Technology mapping • Internationalisation • Cluster branding; Export strategy development • Cluster-to-cluster links; Investment attraction • Skills development • Workforce training; Learning circles • Tertiary course development; Partnership with local schools • Finance • Equity and debt funding, venture capital, angels, seed funding
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- 47. . Step 11 Linking the cluster Building on a solid understanding of the cluster’s strengths Three levels of leverage: 1. With neighbouring clusters 2. Nationally, with clusters in the same sector 3. Internationally, with clusters in the same sector
- 48. . BUILDING A EUROPEANBUILDING A EUROPEAN FOOD CLUSTERFOOD CLUSTER
- 49. . FINE project Food Innovation Network Europe Objectives: Building a lasting network of EU food regions Learning from each other on: policy, innovation instruments regional food networks Developing interregional RTD and innovation projects
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- 51. . FINE regions Collaboration between eight regional food clusters: East Netherlands (NL) Øresund food region (Denmark/Sweden) Rogaland (Norway) Castilla y León (Spain) Flanders (Belgium) Wielkopolska (Poland) Scotland (UK) Emilia Romagna (Italy)
- 52. . Cluster policies Traditional economic development policy Individual needs of specific firms and industries Current policies Firms and industries as a system for regional development The challenge The international approach in cluster promotion
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- 54. . Step 12 Review, Evaluation Two levels of review 1. Reviewing the overall contribution of the clustering intervention: • Is the clustering initiative significantly adding value? 1. Is the competitiveness of the cluster being upgraded? • Movement from a clump and clutter to a more innovative cluster?
- 55. . Strengthening the conditions for commercialisation? • Is the cluster becoming a more demanding customer for R&D centers and universities? • Setting priorities for needs-driven R&D? • And becoming an incubators without walls?
- 58. . Cluster evaluation Elephant & mouse syndrome
- 59. . Avoiding the lions Three tips
- 60. . Value of cluster workshops Identifying development priorities • Key element in the cluster process • Transparent, open to all • Gaining broad agreement on the cluster’s development strategy
- 61. . Value of cluster workshops Identifying development priorities • Key element in the cluster process • Transparent, open to all • Gaining broad agreement on the cluster’s development strategy • Capturing ‘the wisdom of crowds’
- 62. . Move quickly into action Avoid paralysis by analysis • Analysis simply provides the platform for action • Businesses, especially SMEs, seek early pay-offs • Pick the ‘low hanging fruit’ • Engage only when there is momentum • Move at the speed of business • Build a portfolio of initiatives, projects • Spread benefits and risks Just do it!
- 63. . Don’t underestimate the central role of a neutral facilitator • Facilitating linkages: • Between firms, removing clumps • Between government agencies, removing clutter • Continually moving the development agenda forward • Requires long term public funding • And high level facilitation skills
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- 66. . On competitiveness There is no rest! • Upgrading competitiveness …no end point…it’s a relentless journey • Local (micro) not national (macro) focus • Global specialisation; Winner takes all • Distributed competitiveness, internationally linking local specialisations…local clusters • New competencies emerging where existing clusters converge • Often combining technologies in new ways
- 67. . Upgrading competitiveness Common responses • Developing deep, deep competencies • Local specialisations… central role of universities • Building local connections, the internal buzz • Connectivity - Productivity – Competitiveness • Self-destruct task forces, collaborative alliances • Building global pipelines, the external links • C2C links, attracting customers, new investment, new technologies, new people…
- 68. . Is the focus on a ‘cluster programme’ ? Or fundamentally creating a culture shift? • Towards private sector collaboration? • And Private - Public alignment? With the cluster as the lens to focus other public investments: • Universities; R&D; training; investment & talent attraction; export development; incubators; industry/science parks…
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- 70. . Ifor Ffowcs-Williams CEO, Cluster Navigators Ltd 22 Examiner St, Nelson, New Zealand E4@clusternavigators.com + 64 3548 0606 www.clusternavigators.com