rfcd 2011: beverly morgan: cluster development in the caribbean key supporting agencies part 1

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Regional Forum on Cluster Development in the Caribbean Theme 4 – Key Supporting Agencies The Competitiveness Company Beverley Morgan Trinidad & Tobago November 2011

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RFCD Conference @ Arthur Lok Jack GSB - November 2011

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Page 1: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

Regional Forum on Cluster Development in the Caribbean

Theme 4 – Key Supporting Agencies

The Competitiveness Company

Beverley MorganTrinidad & Tobago

November 2011

Page 2: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

The competitiveness company

Who are we? What do we do? Why do we do it? What are some of our stories?

Page 3: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

Source: Cluster Greenbook Based on Survey of 500+ Clusters

3

Research & Networking

•Publish Reports

•Study Cluster

Networks:•Companies•People

Cluster Expansion

•Incubator Services

•Branding

•Attracting Firms

•Company Growth

Innovation & Technology

•Technical Standards

•Technical Trends

•Facilitate Innovativeness

•Introduce New Technologies

•Technology Diffusion

Education & Training

•Technical Training

•Management Training

Commercial Cooperation

•Purchase Coordination

•Increase Collaboration

•Export Promotion

•Business Assistance

•Market Intelligence

Policy Action •Infrastructure Lobbying

•Regulation Lobbying

•Production Processes

•Cluster Awareness

Typical Cluster Initiatives

Page 4: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

MOBILISATION

MOBILISATIONPROCESS

EmailsTelephone CallsEach person tells others (Snowball)Everyone welcomeEveryone valuedOpen and Inclusive ProcessIdeas Welcome

Page 5: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

Framework: Cluster Strategy Development Template

1. The Cluster Strategy Development Template is a framework that provides a structured decision making methodology.

2. The objective of the Template is to provide a set of concrete strategic initiatives that each cluster can pursue to attain the results they seek. In that sense it serves as a Roadmap for the cluster.

3. The strategic initiatives contained in each Template form the Work Plan for the cluster throughout the duration of the project. The strategic initiatives stem from the cluster workshops and are based on the ideas and insights of the participating firms.

4. The clusters own the document. Source: ontheFrontier

Page 6: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

Framework: Cluster Strategy Development Template

The Cluster Strategy Development Template is the top-line repository of efforts . It is a comprehensive document reflecting the ideas and insight of all stakeholders.

Source: ontheFrontier

Strategy Development Template

Cluster Workshops Cluster Diagnostic

Review and Research Firm-Level Consultations

Page 7: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

The 5-Step Cluster Process – Competitiveness in Action

– Step 1—Analyse Current Situation

– Step 2—Set Industry Objectives

– Step 3—Understand Customer Needs

– Step 4—Articulate Competitive Positioning

– Step 5—Develop Action Guidelines

– Next Steps

Page 8: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

OperationsOperations Strategic ObjectivesStrategic ObjectivesAssetsAssets

Asset-Based Approach

Strategy Based Approach

Compete on the basis of one’s natural conditions

Create basic products and wait for customers to come

Look for high volume and low price

Exploit Comparative Advantage

Focus on satisfying the needs of demanding but well selected and high paying customers

Build Competitive Advantage

Acquire assets that deliver complex products that meet the needs of target customers– Knowledge and

research– Technology and

know how

Set clear targets and adopt sophisticated configuration to meet them– Strong-inter

company and public-private sector cooperation

Improve productivity

AssetsAssets OperationsOperationsStrategic ObjectivesStrategic Objectives

Migrating Towards a Strategy Based Model

Strategy, Operations and Assets

Page 9: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

Strategy IS choice Cascading Choices

How will we win in chosen markets?

How will we win in chosen markets?

What management systems are required?

What management systems are required?

What are our goals and aspirations?

What are our goals and aspirations?

What capabilities must be in place to win?

What capabilities must be in place to win?

Where will we play?Where will we play?

Source: Roger Martin

Page 10: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

RESEARCH GUIDE

Situation AnalysisMarket Size & DemandDistribution ChainStandards & RegulationsProduction VolumesLogisticsQuality RequirementsProfitability Cluster MapsCustomer SurveysCompetitive Positioning

Data Gathering

Cluster Participants Learn and Practise Structured Approaches

Page 11: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

Clusters ImplementedBy The Competitiveness Company (2002 – 2011)

1. Agribusiness: Sauces & Spices2. Tourism Unique Jamaica & MyJamaica3. Entertainment: Jamaica Signature Beats4. West Indies Sea Island Cotton5. Ornamental Fish6. Agro-Processing (In St. Vincent & the

Grenadines)

Page 12: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

The Issue of Public Goods

• Public Goods created as result of cluster development (mainly informational goods)

• Free Rider Problems – Puts Trust at Risk• Project must anticipate free rider problems• Value of IP generated needs to be recognised

& protected• Appropriate systems, contracts, agreements,

conversations should be in place• Need for effective safeguards• Need for explicit agreements

Page 13: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

The Free Rider Problem: Who, if anyone, owns what?

Page 14: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

Role of Intellectual Property: What do Clusters Produce?

• INFORMATIONAL GOODS AND KNOWLEDGENames as IdentityShared VisionStrategiesIdentification of and Access to New MarketsIdentification of New NichesPlansBrandsNew ProductsShared firm-level information

Page 15: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

BRAND DEVELOPMENTHaving determined an identityDeveloped a planDesigned a strategyThe ingredients are in place to develop a brandWho owns it?

Page 16: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1
Page 17: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

Why Trust Matters Trust:

o Linked to higher economic performance

o Lower transaction costs

o More trustworthy government

o Higher levels of investment

o Intentional acceptance of vulnerability based on positive expectations of others’ intentions (Ostrom 2003)

o Social connections lead persons to trust that others will be motivated to act benevolently. (Tyler, 2001)

Trusting societies :

o Incentives to innovateo Accumulate physical capitalo Have higher returns to

human capital. o Trust and civic involvement

linked to better performance of government institutions.

o Individuals in social dilemmas invest resources to improve joint outcomes.

o Cooperation levels higher than predicted.

o Important to encourage people to invest themselves in groups.

o To extent that identities intertwined with group, ‘social capital’ created, facilitating functioning of the social group.

Page 18: RFCD 2011: Beverly Morgan: Cluster Development in the Caribbean Key Supporting Agencies Part 1

ROLE OF TRUST

Confucius said to his disciple Lao Tzu:

“Three things are needed for good government.

They are the sword, food and trust. If a ruler must give up one, let him give up

the sword. And if something else, let him give up the

food. Trust should be guarded to the end.”