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MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual Conference Varese, Italy November 1999 Clusters Promotion Program in Mexico (Programa de Promoción de Agrupamientos Industriales)

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Page 1: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT

The Competitiveness Institute, 2nd Annual ConferenceVarese, Italy

November 1999

Clusters Promotion Program in Mexico (Programa de Promoción de Agrupamientos Industriales)

Page 2: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

5.2 4.8

2.5

6.7

.0

2.0

4.0

6.0

8.0

1996 1997 1998 1999*

GROSS DOMESTIC PRODUCT%

20.7

15.0

6.510.8

0.0

10.0

20.0

30.0

1996 1997 1998 1999*

EXPORTS%

FTA’s1992: Chile1994: US, Canada1995: Colombia, Venezuela, Bolivia and Costa Rica1998: NicaraguaNegotiating with: - European Union

- 7 countries from Latin America- Israel

Mexico

Page 3: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Regional Concentration of the Economic Activity

(GDP)

Pacific Ocean

Gulf of Mexico

Region Population(%)

GDP(%)

GDP perCápita(1999*)

Dollars USA

North 21.3 27.0 5,502

Center* 58.4 59.9 4,438

South-South-eastern 20.4 13.1 2,785

* Includes DF, 23% del GDP

Page 4: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

l Economic growth

l More and better jobs

l To improve competitiveness ofnational industrial plant

NATIONAL DEVELOPMENT PLAN 1995 - 2000

Industrial Policy and Foreign TradeProgram

IndividualSectorialRegional

Cluster

Promotion Program

Level of Support to Enterprises

üü

ü

Page 5: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Clusters Promotion Program

Competitiveness Improvement

Industrial Policy Descentralization

Industrial Policy Descentralization

Joint Actions of Federal and Local

Governments (States and Municipalities)

Joint Actions of Federal and Local

Governments (States and Municipalities)

Active Participation of Business Leaders,

Trade Associations and Chambers

Active Participation of Business Leaders,

Trade Associations and Chambers

Interinstitutional Coordination

Interinstitutional Coordination

Fostering Regional

Development

Page 6: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Shared Strategic Vision Enterprises - Local and

Federal Governments

Take advantage of the Productive Vocation of each region

Take advantage of the Productive Vocation of each region

New Investment and Export Opportunities New Investment and Export Opportunities

Strengthening of Local Supplying

Strengthening of Local Supplying

Initiatives for Business

Cooperation andNet Working

Initiatives for Business

Cooperation andNet Working

Human Resource Development

Human Resource Development

Specialization of Infrastructure

and Supporting Services

Specialization of Infrastructure

and Supporting Services

Page 7: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Sectors Identification

Consultants Hiering

Research and Field Survey

- Interviews- Focus Groups

Diagnostic Consensus

Strategic Plan and

Guidelines Consensus

Guidelines Implementation

- Interinstitutional co-ordination

CompetitivnessStregthening

Follow up and Evaluation

Entreprenures

Federal Governmentl

State Government

Agents Involved

Ministry of Trade andIndustrial Promotion

New

Initiatives

Generation

EntreprenuresLidership

Methodology

Page 8: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Sectors Selection

• Pragmatic focus on cluster bounderiesaccording to state geoghapic limit.

4Businness Organisations are usually state based.

4Facilitate local - federal government coordination.In fact clusters are:

4 Binational Clusters:Electronic Industry in Baja California and San Diego C.A.:Leader in T.V. Production.

4Interstate Clusters: Textil and apparel clusters:Puebla and Tlaxcala: Leader in the production of cotton woven fabric and maquiladora exports.Durango -Coahuila: Leader in denim production and apparel.

4 Intrastate Clusters: Jewelry in the Municipality of Taxco, Guerrero.

Page 9: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

ConstructionMaterials

(Chihuahua) Metal-Press(San Luis Potosí)

Foodand

Beverages

To add value to natural resources

and primary production

Fiber-Textile-Apparel(Aguascalientes, Durango, D.F.

Edo. de Mex.,Hidalgo,Jalisco, Morelos,

Oaxaca, Puebla, Querétaro,Tlaxcala.)

Automotive(Nuevo León,

Aguascalientes)

Electronics(B.C., Nuevo León,

Tamaulipas)

Jewelry(Guerrero)

(Campeche, Colima,Michoacán, Nayarit,Sonora, Veracruz,Tabasco, Zacatecas.)

Meat and poultry(Yucatán, Campeche)

Fruits andvegetables

Fishing andaquacult ure

.

(B.C.S., Chiapas,Sinaloa, Q.Roo.)

Selected Sectors

Furniture

(B.C.)

To take advantageof exports growthto consolidate or

detonate the regional development

Page 10: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Fiber-Textile-Apparel Cluster

Fiber-textile-apparel industry sharing(%)

Firms Employment•Distrito Federal•Durango•Hidalgo•Jalisco•Edo. de México•Morelos•Oaxaca•Puebla•Querétaro•Tlaxcala

21.51.53.59.7

12.50.90.68.31.52.4

11.05.34.33.9

13.41.00.2

12.02.92.8

42.8 56.8

Exports9.77.81.32.78.21.00.09.53.22.6

46.1NATIONAL

15,811 Companies

772,988 Employment

8,700 Million USD exports in 1998

Page 11: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Zacatecas: Peach, grape, dried pepper, guava, prickly pear, garlic and beans.

Nayarit: Mango, banana, tomato, watermelon and chili

pepper.

Michoacán: Mango, avocato and strawberry

Sonora: Grapes, asparagus, potato, tomato and orange

Campeche: Mango, tropical fruits, orange, melon, watermelon, chili pepper

Veracruz: Orange, lemon , macadam, chayote, watermelon, papaya, pineapple, melon, cucumber, blackberry, banana and green pepper.

Tabasco: orange and lemon.

Colima: Lemon, mango and coconut

Fruit and Vegetable Processing Cluster

Page 12: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

CAMPECHEAquaculture:shrimp and tilapia

CHIAPAS

Fishering and Aquaculture:Shrimp, mojarra, tilapia and shark

QUINTANA ROO

Fishing and Aquaculture: shrimp, periwinkle, lobster, mero and octopus.SINALOA

Fishing and Aquaculture: Shrimp, Tunna fish and catfish

B.C.SURFishing and Aquaculture:Shrimp, squids and sardine

Fishing Processing and Aquaculture

Page 13: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

GOLFO DE MÉXICO

Hermosillo

Mexicali- Kenworth (T)

- Ford (A)Chihuahua- Ford (E)

Ramos Arizpe- GM (A, E))

Saltillo- Volvo (T)- Chrysler (E, A)

Aguascalientes- Nissan (A, E)- Omni Integ. (AU)- Ruvesa (AU)

Guadalajara- Honda (A)

Silao- GM (C)

Cuautitlán- Ford (A, T, E )

Cd. Sahagún, Hgo.- Dina (T, B, E))

Puebla- V.W (A, M)

Cuernavaca- Nissan (A,T)

Toluca- Chrysler (A, E)- BMW (A, E)- M. Benz (A, B)- G.M. (E)

D.F.- Chrysler (T)

- MASA (B)- Volvo (T)

Monterrey*- Tramosa (T)- Navistar (T)- M. Benz (B)

San Luis Potosí- Scania (T)- Cummins (E)

Gómez Palacio, Dgo.- Renault (E)

A: automobile T: trucks B: busses

E:engines

Mexican Automotive Industry Clusters

291,000 employees

23,600 million USD of exports in 1998

Page 14: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

9715 (A): FIG 103

l AUDIO & VIDEO

HOSEHOLD APPLIANCES

COMPUTER EQUIPMENT

TELECOMUNICATIONS

OTHERS

n

&H

lSANYO

l SONYl HITACHI

l PIONNER

l MATSUSHITAl JVCl SAMSUNG

n SANYO H PHILIPSH CASIOH KODAKH CANONH KYOCERAH INTERNATIONAL RECTIFIER

l SONYl DAEWOO (SLRC)l MITSUBISHIl GOLDSTAR

ACERH HONEYWELLH ROCKWELL

l ZENITH

l TOSHIBA

l KENWOOD

l PHILIPS

l THOMSON

n ELECTROLUXACER

& MOTOROLAH ALTECH KYOCERA

H THOMPSON

n MABE

n HAMILTON BEACH*

n MABE GE

n MABE SANYO

n WHITE -WESTINGHOUSE

MEX*H TEXAS INTS.H XEROXH SIEMENS

I. B. M.

H. P.&NEC

& LUCENT TECHNOLOGIESH MOTOROLAH KODAKH CUMEXH SIEMENS

n VISTAR

n VITROMATIC

l CLARIONn DAEWOOn BLACK & DECKERn MABE n SINGERH SIEMENS

n MABE

n BRAUN

n ELECTROLUX

n SUNBEAM

n KOBLENZ

& ERICSSON

& ALCATEL/INDETEL

H AMP

& NEC

n GESTAR

n SINGER

n VITROMATIC

n ELECTROLUXn FILTER QUEENn HOOVERn IMANn KOBLENZn MABEn PHILIPS

n SUNBEAMH OLIVETTI

l PIONEER

n DANFOSS COMPRESSORS

n VITROMATIC n MABE H KODAK

H NIPPON DENSOH AXA YAZAKI

l ZENITH

l DELCO

l PHILIPSl SONY

l MATSUSHITAn VITROMATIC

& NOKIA& LUCENT TECHNOLOGIESH FUJITSU

H CONDURA H DELNOSA

Electric / Electronic Clusters

&

Page 15: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

First Phase

• 4 SECOFI public bids• 2 Local consultants were hired to make diagnostics and strategic plansto promote 30 clusters nation-wide.

• Federal government allocated 550,000 U.S.Dollars

Consultants hiring

Second Phase• Also some state government allocated funds for a second diagnostic. State Sector ConsultantNuevo León Electronic Industry Academic Institution Tabasco Tourism Private consultantsNayarit Tourism Private consultants Aguascalientes Fiber-Textil-apparel Academic InstitutionVeracruz Petrochemestry Private consultants Baja California Furniture Private consultants Tamaulipas Electronic Industry Private consultants

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• International consultants with expertise in clusters promotion have rates that central or local governments can not afford.

• Local consultants have no experience in clusters promotion: “ They learned while doing it”.

• The academic sector has shown interest on clusterspromotion but lacks real life expertise.

Need to strengthen local consulting skills.

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Strategic studies and guidelines

making

• Analysis of: StrengthsWeaknessOpportunities Treats

www.siem.gob.mx⇒Programas de promoción

⇒ Programa de promoción de agrupamientos industriales.

•“ Shock Therapy” for agents of a cluster.

All documents are available for public consultation at the internet:

• Documents are only a first stage. Clusters promotion activities have to be very dynamic to consider market evolvment and competitive strategicchanges.

Page 18: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Agents participation

•Initially, the federal government played an important role to:

4 Suggest local authorities and private sector, the implementationof regionally based strategies to boost clusters development.

4 Research and disseminate successful experiences regarding clustersdevelopment and promotion, both at national and international level.

4Suggest a working methodology.

Page 19: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

• The federal government reallocated resources and dedicated an office to clusters promotion as its main activity. The role of this staff is to act as facilitator or catalytic agent.

Minister of Trade and Industrial Development

Viceminister of Industrial and Foreign Trade Promotion

General Direction for Industrial Promotion

Cluster Promotion Team staff of 16

persons

AutomotiveElectronicsMetal press

AutomotiveElectronicsMetal press

FiberTextile

Apparel

FiberTextile

Apparel

TextileApparelJewelry

TextileApparelJewelry

Agribusiness

Livestock

Agribusiness

Livestock

Agribusiness

acuiculture

Agribusiness

acuiculture

Page 20: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

• In addition, the federal government, trained SECOFI´s staff of the stateoffices to boost the program.

• State governments participate through the Ministries of EconomicDevelopment.

• State governments proposed and obtained the entrepreneurs leaders participation.

Obtained Experiences

• Usually local governments get more involved when they initiate theiradministration.

• There are some difficulties to keep the local governments active participation specially when clusters initiatives are considered ¨Government projects of the prior administration¨.

Page 21: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

2 States

1 State

1997 1998 1999 2000

2 States

2 States

1 State 2 States

3 States 2 States

1 State 1 States

Clusters Promotion Program Operation

17 State Governments Changed

The federal govenment participation has helped facing the states governmentadministration changes, and have more continuity to support the entrepreneurs initiatives of the strategic plans for cluster promotion.

Page 22: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Guidelines Implementation Federal government role

l Motivate the active participation of involved agentsl Motivate the active participation of involved agents

l Strength interinstitutional co-ordinationl Strength interinstitutional co-ordination

l Support follow up and evaluation activities in the statesl Support follow up and evaluation activities in the states

l Results dissemination l Results dissemination

ü Successful experiences exchange

Clusters strength

ü Entrepreneurs leadersü State governments

ü Facilitate cluster reinforcement initiativesü Higher impact of public policies

ü Generate new initiatives

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Guidelines Implementation

•Agreements signature between entrepreneurs, business organizations, chambers, state governments and federal government, for cluster promotion.

1998 : Baja California, Durango and Morelos.

1999 : Colima , Hidalgo, Puebla, Queretaro, Tamaulipas, Veracruz and Zacatecas.

Institutionalization

Page 24: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

• Encourage organizational development process:

4Association of Automotive Parts Manufacturers in the North East Zone

4Association of Apparel Producers in Queretaro, Puebla and Tlaxcala, Oaxaca

4Creation of the Mexican Counsel for Cotton

• Contribute to building up the capabilities of intermediary private institutions and associations

•Communicate the need of strategic planning to the local governments with the driven force of the private sector.

Page 25: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

Interinstitutional Coordination

• Clusters promotion is a methodology that allows a more efficient government support for enterprises.

Institutional Supply

158 programs to support enterprises

Institutional Supply

158 programs to support enterprises

Initiatives identification

Clusters Promotion

Intersecretarial Commission for Industrial Policy

SECOFI 4Promotes consistency cooperation public agencies

4Facilitates the access to supporting programs4Advises on public programs that can be useful

to boost initiatives 4Feed back to policy design

Page 26: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

New way of thinking about competition and competitive advantage

New relationship between public and private sector

New way of public services

Page 27: MINISTRY OF TRADE AND INDUSTRIAL …old.tci-network.org/media/asset_publics/resources/000/...MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT The Competitiveness Institute, 2nd Annual

New way of Public Services

• Demand driven services vs Supply of services

• Integrated, holistic andsystemic support

vs Isolated support

• Provide collective service vs Assistance toindividual enterprises

• Cooperation andconsistency between publicagencies of local andcentral governments

vs Rivalry and distrustbetween agencies, andbetween differentlevels of government

• More impact at a lower cost vs Higher cost anddispersion of efforts