croatian ict cluster initiative - t-pot · pdf fileict cluster initiative 3. cro.ict ... swot...

Croatian ICT Cluster Initiative

Zagreb, September 22, 20093

Boris Krstanović

Contents: 1. Introduction: ICT Industry

2. ICT Cluster Initiative3. cro.ict – Association of Croatian ICT

Clusters4. Questions and Answers

Radionica: “Uloga inovacija, s naglaskom na sektore tekstila/odjeće i informatičkih tehnologija”

Boris Krstanović

- CEO (1989. -)Multilink, ICT Solution Engineering and Consulting Inc.

- President (Cluster Manager) (2005. -)GRIT ICT Cluster, Rijeka

- President (2007. -)cro.ict – Association of Croatian ICT Clusters, Rijeka

- Vice-PresidentAffiliation of Croatian Clusters within CCE

Information and Commnucations Techology

Information and Communications Technology (ICT) plays a key role in accelerating productivitiy and economic growth – just as highways, railroadsand electrical energy once did!

4 Basic Ways in Which ICT Promotes Economic Growth

• ICT promotes efficiency in every part of business, from development to marketing to accounting

• ICT promotes innovation, shortening the time needed for new product development

• ICT improves market conditions and access to information.• ICT is a global technology – ICT and the processes of globalization are directly

related

Information and communications technology has an important influenceon the development of business and fundamentally changes social life.

1. Introduction: Croatian ICT Industry in 2007/2008Secondary Sources on Croatian ICT Industry

Recent Studies:

SWOT Analysis: Weakness

•• Low Image/Recognition of Croatia as an ICT location• Expensive Location (compared to the SEE region)• Perceived lack of Government Priority in ICT Sector• Low Government Spending on Education (4.3% of GDP)• Low Export Orientation…

SWOT Analysis: Strength• Quality of Human Resources• Quality of Technical Universities• Quality of Infrastructure: Telecommunications• Quality of Living• ICT Environment• …

Source: High Technology Study on Croatia, The World Bank, MIGA, 2005.

1. Introduction: Croatian ICT Industry SWAT

7,9%

0,8% 1,2%

15,2%

26,5%

10,2%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006 2007

3.783,94.082,5 4.114,2 4.164,6

4.799,0

6.069,9

6.648,0

2001 2002 2003 2004 2005 2006 2007

1. Introduction: Croatian ICT Industry in 2007/2008Croatia - IT Spending (in HRK) 2001 – 2007 Source: IDC

Spending (M HRK) Growth in HRK

30%

14%29%

2%

11%

14%

IT ServicesSoftwarePCStoragePeripheral eq.Network eq.

I

Total = $1.24 Billion

1. Introduction: Croatian ICT Industry in 2007/2008Croatia - IT Market Segmentation in 2007 Source: IDC, 2008

24%

15%

13%13%

8%

5%

5%

4%

13%Communications

Combined Manufacturing

Combined Goverment

Banking

Home

Retail

Business Services

Utilities

Others

Total = $1.24 Billion

1. Introduction: Croatian ICT Industry in 2007/2008Croatia - IT Market in 2007 - Industries Source: IDC, 2008

Number of Employed in ICT industry in Croatia 1999 - 2004

Source : FINA, Prepared by IDC, 2006

1. Introduction: Croatian ICT Industry: Human Resources GAP

List of facts which indicate GAP of ICT specialists- Costs of IT Engineers - Waiting time for employment from 0 to up to 27 months (!?)- Mobility of workforce:

- from Regions to Zagreb- from Government to large companies and banks

- Underdeveloped knowledge-intensive sector of the industry- No FDI in ICT industry- No significant ITO/BPO business developed - High drop-out rate from universities- Unemployment of ICT specialists does exist

ICT Specialist GAP Depends on the:- Economy growth and development- Profile/occupation of ICT specialist: Regions: Zagreb v.s. rest of Croatia

-25,6%

-23,5%

-22,8%

-22,6%

-21,6%

-20,5%

-19,1%

-14,0%

-12,4%

-8,8%

-5,4%

-1,3%

-0,5%

1,3%

1,4%

1,9%

9,9%

11,3%

14,7%

16,7%

Public administration

Print/typographical worker

Tourism and hospitality

Agriculture, fishing and forestry

Education (other)

Civil engineering worker

Transport

Technician and similar

Communication services

Arts, design and architecture

Humanities

Food processing

Law

Higher education and science

Health care

Economics (other)

Natural sciences

Economics - finance

Engineer - (others: mechanical, electrical ...)

Engineering - IT

Cost of ICT Specialists Average Net IncomeSource: MojPosao.hr, 2006, N=7203

1. Introduction: Croatian ICT Industry: Human Resources GAP

Global Competitiveness Index 2008 - 2009: 61 (134)Networked Readiness Index 2008 - 2009: 49 (134)

1. Introduction: Increasing Competitiveness of the Croatian ICT industry

Usage Component 49/134• ICT use and government efficiency 85• Extentof business Internet use 66• Firm-level technology absorptio 100• Availability of government online services 82• Government sucess in ICT promotion 73

Rediness Component 47/134• Local Suplier Quantity 73• Local Suplier Quantity 90• Computer, comm., and other imports 2007 13• Buyer Sofistication 82• Importance of ICT to gov’t vision of the future 70• Government prioretization of ICT 72

Environment Componennt 54/134• Property Rights 84• Quality of Scientific research institutions 2006 58• Time required to start a business 100• State of cluster development 114


Six recommendations to increase competitiveness of Croatian information and communications technology sector (National Competitiveness Council)

“Using ICT to transform Croatia into a society based on knowledge and innovation”

1. SCIENCE AND EDUCATION IN THE DEVELOPMENT OF A KNOWLEDGE SOCIETY

The number of qualified ICT workers, specialized for the use anddevelopment of new technologies should be tripled within the next three years

2. TECHNOLOGY ACCESSIBLE TO EVERYONEAccess to broadband Internet should be provided to everybody as soon as possible, as well as technological, social and regional inclusion


3. E-ADMINISTRATION SHOULD BE DEVELOPED COMPLETELYIt is necessary to conduct a consistent and comprehensive reform of public administration as soon as possible, using the e-reengineering model, both on the national and on regional and local levels.

4. MORE DECISIVE USE OF E-BUSINESSVarious measures should be taken to encourage companies to conduct e-business in their work, and all existing barriers to e-business should be eliminated. Development of business capacity must be connected to the application of e-business.

5. PROMOTE FASTER DEVELOPMENT OF THE ICT INDUSTRYIt is necessary to design a development strategy for the domestic ICT industry with special emphasis on export capabilities. The institutional capacity of the ICT industry must be enhanced.

6. INCREASE THE EFFICIENCY OF ADMINISTRATION AND LEGISLATIONIt is essential to increase the efficiency of the administration by decisive introduction of new technologies, knowledge and skills.


2. ICT Cluster Initiative

Findings: • Croatian SW companies should focus on new market niches and

move from SW services (body-shopping) to SW products

• Croatian SW companies should invest in development of high-quality SW products and solutions for the global market

• Cluster formation is a key factor for Croatian SW companies in their SW export orientation

• …

Source: Croatian SW Sector Analysis, 2006 (CARDS 2002 Project)

2. Cluster Initiative: Introduction: ICT/SW Industry Potentials in Croatia

Different starting points: Cluster programmers by industries

2. Cluster Initiative: Introduction

Different starting points: Objectives of Cluster development programs


2. Cluster Initiative: Introduction: Field Research

Source: Networking and Clustering in Transition Countries: The Case of IT Sector in Croatia,

University in Bologna, Italy, 11/2006, N=962/81

Business Environment: TRUST – Key Success Factor



Source: Networking and Clustering in Transition Countries: The Case of IT Sector in Croatia,

University in Bologna, Italy, 11/2006, N=962/81

The nucleus of the ICT Cluster - founded in December 2004 as an initiative of 4 successful Croatian ICT companies:

� More than 50 years of joint experience in implementing and managing ICT projects

� References in vertical markets: Finances, Telecom, Tourism and Auto� More than 90 ICT experts with more than 66 industry certificates

(Microsoft, Cisco, Oracle, Linux, CA, …)� Experience in international projects in German,

Swiss, Slovenian, Qatar markets

2. ICT Cluster Initiative: Incubation: BEAM (2004)

�Target: Top management of the biggest Croatian hotel companies�Goal: To inform hoteliers about comprehensive BEAM solutions, consulting,

implementation and integration services

BEAM (& Partners) project:

Realizing Potentials of Croatian ICT IndustryCroatian ICT Cluster Initiative – Phase 1: Incubation (Finished)


BEAM @ Windays 2005*

Realizing Potentials of Croatian ICT IndustryCroatian ICT Cluster Initiative – Phase 1: Incubation (Finished)

* Finacial Suport by MoE


Unfortunately, BEAM ICT cluster never achieved its commercial objectives. The lessons learnt from this include:

- ICT clusters should be established locally (as regional CI) - Cluster has to be managed by a full-time Cluster Manager- Cluster strategy, business plans and action plans are needed to ensure

successful cluster implementation- Statutes, setting out the framework and rules for cooperation have to

be defined (roles and responsibilities of members)- Cluster services which generate concrete, tangible benefits for the

members have to be developed and implemented (e.g. export promotion service...)

- Education of cluster members leads to better identification with cluster goals and better commitment (expectations vs. outcomes)

- The cluster development process should be supported and monitored by institutions (RDA and MoE..) …


• Re-engineering of the program in July 2005 based on the BEAM experience and the experience from the industry of the neighboring countries (with USAID and GTZ program assistance)

• The first regional ICT Cluster: GRIT was founded in October 2005

as a bottom-up cluster initiative of the 8 leading ICT companies in the Primorje-Gorski Kotar County:

- supporting member: Porin Regional Development Agency, Rijeka

- partnership with the University in Rijeka

2. ICT Cluster Initiative: Incubation: GRIT (2005)

Objectives of the GRIT ICT Cluster (by priorities) for 2007/2008:

1. Development of ICT human resources (Cooperation with the Rijeka University and technology partners)

2. Positioning and branding, joint marketing/PR activities, networking (on regional, national and international level

3. Development of joint ICT solutions, products and services

4. Self sustainability, own financing of GRIT ICT Cluster activities

+ Development of quality culture (ISO9001,

ISO27001, CMMI & IT-Mark...)

+ Support to the national ICT Cluster initiative

2. ICT Cluster Initiative: Incubation: GRIT ICT Cluster

2. ICT Cluster Initiative: Incubation: GRIT (2005)

2. Croatian ICT Cluster Initiative: Regional initiatives 1

60 companies from 6 regions (counties) joined ICT Initiative

Objective: Increase ICT industry competitiveness in other Croatian RegionsPhase 1: Start and support the Cluster initiatives in five Croatian regions:

Varaždin, Čakovec, Osijek, Split, Pula (based on the GRIT raw model/practice)

Desirable profile of the ICT cluster company/member- Innovative, knowledge

intensive, successful companies- Companies focused on SW

products and/or ICT services- SME or micro SME (< 70 emps.- Experience on the EU/global

market

CTR d.o.o. Razvojna agencija

Brodsko-posavske županije

DUNEA d.o.o. Razvojna agencija

Dubrovačko-neretvanske županije

2. Croatian ICT Cluster Initiative: Regional initiatives 2 & 3

Phase 2: Start and support the Cluster initiatives in seven Croatian regions: Zadar, Šibenik, Dubrovnik, Slavonski brod, Bjelovar, Karlovac, Krapina, Zagreb County (based on the GRIT raw model or best practice)

Phase 3: Start and support the Cluster initiative in lessdeveloped Croatian regions: Vukovar, Sisak, Gospić, Knin...

8%

-14%

-16%

-18%

Grad Zagreb

Splitsko-dalmatinska

Osječko-baranjska

Primorsko-goranska

Comperissson of Net Salaries of ICT specialists according to regions – counties Source: MojPosao.hr (Job Portal),

July – September, 2006 (N=7203)

Clusterization bring the following advantages/benefits to the host territory (region):

1. Increased productivity, through the benefits of economies of scale2. Cost savings, through lower transaction costs, just-in-time practices…3. Better access to information on market and technology changes 4. Enhanced image and attractiveness of the region, attracting FDI, or new firms formation 5. Improved prospects for industrial restructuring, with a productive structure

combining flexibility of small scale actors with resources of large scale; 6. Opportunities for more rapid knowledge deployment

since the co-location of firms and knowledge institutions 7. Opportunities for collective learning, through joint search for innovative activities,

exploitation of complementarities and synergies between firms

2. Croatian ICT Cluster Initiative: Regional initiatives 2 & 3

3. cro.ict – Association of Croatian ICT Clusters

Stage 4:Establishing national association (network) ofregional ICT clusters

National ICT Cluster Initiative:- organic (bottom-up)!- commercially oriented

self-sustainable - non-political- not technologically conditioned- flexible- open

CI Promotes: knowledge and quality culture, business ethics and the dignity of the profession


cro.ict - Association of Croatian ICT Clusterswas founded in Rijeka, September 19, 2007 as a bottom-up cluster initiative of the 6 regional clusters:

• DISC - Dalmatinski informatički strukovni cluster • GRIT ICT Cluster, Rijeka• ICT Cluster Varaždin• ICT ISTRA - Inforcijsko - tehnoloski cluster Istra• IKS - Informatički klaster Slavonije• MIT Cluster - Međimurski IT Cluster

one (private) institute and two other association:

3. cro.ict – Association of Croatian ICT Clusters: Members

Signed Tecnical Assistance Partnering AgreementBetween USAID and cro.ict- The Associatio ofCroatian ICT Clusters

- Letter of Support from GTZ – Deutsche Geselshaft fuer Technische Zusammenarbeit

- Letter of Support from European Software Institutefor Eastern Europe, Center Bulgaria

- Letter of Support from StrategicEnterprise GmBH (bwconmember)

- Letter of Support from Croatian Government, e-Croatia Office

3. cro.ict – Association of Croatian ICT Clusters: Received Support (LoS)

Vision:Croatian ICT industry should become a key milestone on Croatia’s path towards theknowledge society, competitive near-shoring destination as well as important exportsector (innovative ICT services, solutions and products).

Mission:Organic, sustainable and non-political National ICT association will:- promote the culture of knowledge and business ethics- encourage collaboration within the ICT industry, with academia and stakeholders

of regional development on:- (ICT) capacity building - joint applied R&D- development of new, innovative ICT services, solutions and products

- foster deployment of ICT in business (SME) and government

in order to establish conditions for further development, positioning and branding of (knowledge intensive) Croatian ICT industry.


For members - regional ICT clusters:

knowledge management and information networking, resource allocation and sharing, on the job training and staff qualification, access to capital, lobbying, supporting exports, branding, joint marketing, introducing quality standards (ISO, IT Mark, CMMI, ..), (technical, legal,…) support.

For clients (on the domestic andinternational market):One-Stop-Shop, networking, supporting FDI…

3. cro.ict – Association of Croatian ICT Clusters: Services of the National Office

Marketing &PR Export Promotion

Tender Information

Training Qualification Applied

R&D

Cooperation Projects

Policy Action Access to Capital

One Stop Shop

Cluster Managing Office

Cluster Service System

ClientMembet

Academia GovernmentTech. Providers

Inc.

3. cro.ict: Virtual Collaboration and DM/KM Resources (Under Construction)

Croatian Cluster Network Public WebSupported by:Croatian Chamber of Commerce nad GTZ

Croatian Cluster Network ExtranetSupported by:Croatian Chamber of Commerce and GTZ

Croatian ICT Cluster ExtranetSupported by: GTZ

Inranets of regional ICT ClustersSupported by: GTZ

See-IT ExtranetSupported by: RCI, GTZ

TeamTeam

……

cro.ict - Croatian ICT Cluster Initiative will encourage its members to:

- create:- various specialized ICT networks- ad-hoc consortiums (FP7, Boost-IT, CIP …)- technological and user associations (TT)…

- cooperate with other sectors (with other industry clusters)

- cooperate with the academic community (HR and TT development, joint applied R&D, work on projects … alumni development)

- cooperate with regional development stakeholders (PPP projects, incubation of new ICT business ventures …)

- cooperate with ICT clusters in EU & SEE countries (SEE-IT Brand), create and join trans-national (virtual) ICT Clusters

3. cro.ict – Association of Croatian ICT Clusters: Collaboration Concepts

Signed Memorandum of Understanding with SEE Clusters at

3. cro.ict – Association of Croatian ICT Clusters: International Collaboration

5th SEEITA ConferenceSkopje, FYR Macedonia, September 27, 2007

Extranet - Collaboration Resource for SEE Clusters:

SEE ICT Private Sector Forum –Supported by Business Advisory Council for SEESponsored by Microsoft

EurOffice Services – Opening international markets for small innovative firms(EOS) - European Commission Contract N°038758). Services: Soft Landing, Networking i Business Boosting


- 23 Countries ++- More than 80 EOS Network Members ++- More than 100 ++ international advisors- 3 Integrated Services for Internationalization

Certification of EOS Services- More than 1000 ++ users served face to face

3. cro.ict – Association of Croatian ICT Clusters: International Projects

On-going: • Support of CMMI related activities in ICT SMEs

(GTZ Open Regional Fund for Foreign Trade Promotion / IT Component; PN: 06.2077.3 – 001.04)

Project proposals/Applications:• FROM RESEARCH TO ENTERPRISE – ENTER

(EuropeAid / 126361 / C / ACT / Multi)cro.ict + Central European Initiative - Executive Secretariat, INATE-LECOM

• SEE program(EuropeAid/126361/C/ACT/Multi) –cro.ict (GRIT i DISC klaste-ri) + Institut Jožef Stefan, PORIN

• Creating a conducive environment for R&D activities of SMEsProject Proposal under the 7th RTD OMC-Net – GTZ Consortium

• …

• Formation of clusters in necessary to increase competitiveness of (Croatian) ICT industry

• Experience from EU (but also from transition economies) shows the necessity of institutional support in the creation and start up of (horizontal and vertical) clusters

• Regional partners (RDAs/Centers/Incubators) - flagships of regional initiatives and activities; technical and financial support is crucial: Donors (USAID, GTZ,..), MoE…

• Clusters (regardless of globalization and de-materialization of production) are formed regionally. Cooperation with regional development partners (agencies, technology centers, business incubators…) and the regionaluniversities is essential

• Croatian ICT Cluster initiative - approach proven in practice, verified concept and scenario for creating links between the knowledge-intensive portion of Croatian ICT industry

Summary: Croatian ICT Cluster Initiative: Summary

Regional partners: RDAs, technology centers/parks,business incubators- Institutional support in regions

Ministry of Economy, Labor, and Entrepreneurship- Institutional support, incentives

APIU (Trade and Investment Promotion Agency)- International marketing, branding

USAID - ESP Project- Technical and financial support, managing the CI project, lobbying…

Deutsche Gesellschaft für Technische Zusammenarbeit(GTZ) GmbH- Technical support (training and qualification, consulting),

networking, lobbying

3. cro.ict – Association of Croatian ICT Clusters: Partners and Supporters

Summary: Croatian ICT Cluster Initiative: Summary

• Cluster formation is a process … yield long term results !!!

4. Questions and Answers

cro.ict – Croatian ICT Cluster InitiativeAssociation of Croatian ICT Clustersc/o Porin, PIU Torpedo

51000 Rijeka; Croatia

Phone: + 385 98 210 105

www.cro-ict.net

Boris Krstanović

e-mail: [email protected]

Contacts:

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