Options for National Development

Cluster development as a Tool for Economic Development and Transformation

Emiliano DuchCEO, Competitiveness.comCoordinator, Cluster-Excellence.EU

Port of Spain, November 9th, 2011

10 April 20232

Options for National Development

The first steps in development: health and educationAnd for economic development?Who should decide?What should it be decided?How should it be implemented?

10 April 20233

Options for National Development

The first steps in development: health and educationAnd for economic development?Who should decide?What should it be decided?How should it be implemented?

Can cluster based development help better governance?

10 April 20234

The first steps in development

Health

Education

Political rights

Every body wants them, everybody deserves them.

10 April 20235

And for economic development?

Infrastructure– Roads

–To where? For what?

Specialized education– Vocational facilities

–On what?

Research Institutions– For what?

10 April 20236

Research Institutions?Evolution of CTM’s Income and

Source of Income CTM Manresa (Spain)

Microsoft Innovation Center

Every body wants them, everybody DOES NOT deserves them.

New Competitiveness/World Bank study on Local Sector Public Private Dialogue

Source: Local SPPD, World Bank

10 April 20237

Infrastructure?

Access road to Sassuolo

(Italy) ceramic tiles

cluster.

30% world production 60% world

exports

Single lane bridge

10 April 20238

Infrastructure?

Access road to Sassuolo

(Italy) ceramic tiles

cluster.

30% world production 60% world

exports

Single lane bridge

• Supplier improvement programs

• Cluster participants forae • Specialized cluster

infrastructure

CONDITIONS FOR FIRM

STRATEGY, STRUCTUR

E AND RIVALRY

RELATED AND

SUPPORT INDUSTRIE

S

FACTOR CONDITION

S

• Serve more sophisticated customers

• Upgrading encouraging regulation

• Cluster oriented certification

• Foster specialized training programs

• R+D in cluster related technologies

• Cluster specific information tools

DEMAND CONDITION

S

• Integrated Sales Distribution

• Address new strategic segment

• Establish intercluster alliances

Porter Diamond

GOV.

10 April 202310

Options for National Development

The first steps in development: health and educationAnd for economic development?Who should decide?What should it be decided?How should it be implemented?

Can cluster based development help better governance?

10 April 202311

Young’s, Seachill, Sealord10,000120Seafood

Carlsberg, Theakstons, Black Sheep, HB Clark

5,00031Beer

Major Companies: Cott Beverages, Benjamin Shaw, Nestle Waters Powwow, Coca Cola

4,50018Water/Soft Drinks

Major CompaniesJobsCompaniesSector

7Tea Limited data available15Ice cream

Kwoks, King Asia, Mumtaz Food Industries

1,50010Ethnic

Nestle, Dunhills (Haribo)7,00021Confectionery

Del Monte, Axgro, Daniels Chilled foods, Gordon Jopling

12,00042Fruit & Veg

2 Sisters Premier Division, F.W. Farnsworth, Farmers Boy, Grampian Country Food

20,00068Meat & Poultry

Young’s, Seachill, Sealord10,000120Seafood

Carlsberg, Theakstons, Black Sheep, HB Clark

5,00031Beer

Major Companies: Cott Beverages, Benjamin Shaw, Nestle Waters Powwow, Coca Cola

4,50018Water/Soft Drinks

Major CompaniesJobsCompaniesSector

7Tea Limited data available15Ice cream

Kwoks, King Asia, Mumtaz Food Industries

1,50010Ethnic

Nestle, Dunhills (Haribo)7,00021Confectionery

Del Monte, Axgro, Daniels Chilled foods, Gordon Jopling

12,00042Fruit & Veg

2 Sisters Premier Division, F.W. Farnsworth, Farmers Boy, Grampian Country Food

20,00068Meat & Poultry

Who should decide? The Food and Drink “cluster” in Yorkshire?

10 April 202312

24 August 20079

Storage

AJK, ACS&T, Keystore

Processors

ColdwaterGlenrose

Northern FoodsSealordSmales

Young’s BluecrestBird’s Eye Walls

Fish mongers

EquipmentNesco Weighing

Professional services

Raw materials suppliers

FishgateGrimsby Fish Market

overland

Other suppliers, Direct Imports

Training &research

institutions

Grimsby College (HIFF)University of Hull

Institutions for collaboration

Grimsby FMA, Hull FoodAlliance, Humber Forum, Humber Seafood Group

Government agencies

Local councilsSeafish AuthorityYorkshire Forward

Packaging

Retailers

ASDAMorrison’s

Food Services

Agents andMerchants

Boyd LineD.R. Seafoods

LogisticsHumberside Airport, Nor-Cargo, Samskip, Eimskip

Who should decide? The Humber seafood “sub-cluster”?

10 April 202313

Who should decide? The Humber Seafood Group?

24 August 20079

Storage

AJK, ACS&T, Keystore

Processors

ColdwaterGlenrose

Northern FoodsSealordSmales

Young’s BluecrestBird’s Eye Walls

Fish mongers

EquipmentNesco Weighing

Professional services

Raw materials suppliers

FishgateGrimsby Fish Market

overland

Other suppliers, Direct Imports

Training &research

institutions

Grimsby College (HIFF)University of Hull

Institutions for collaboration

Grimsby FMA, Hull FoodAlliance, Humber Forum, Humber Seafood Group

Government agencies

Local councilsSeafish AuthorityYorkshire Forward

Packaging

Retailers

ASDAMorrison’s

Food Services

Agents andMerchants

Boyd LineD.R. Seafoods

LogisticsHumberside Airport, Nor-Cargo, Samskip, Eimskip

The Humber Seafood Group.The “Cluster organization”?

Defining a sustainable competitive advantage

Structuring actions to build the new value chain

Setting the future challenges

5-8 months

First meeting

Interviews with companies and institutions

Second meeting

Benchmarking tripsBuyer interviewsStrategy meetings

Third meeting

Action lines task groups

Setting the strategy (the CRI)

What should be decided?

How should it be implemented?The CRI workflow

Interviews with cluster agents

Documents and past study analysis

International Benchmarking

BPC Strategy groups

WHAT HOWWHO

1st Public Meeting

6-8 months

Definition and launching of actions

2nd Public Meeting

3rd Public Meeting

Who, what and how: The Competitiveness Reinforcement Initiative in a cluster

1993 2001 2006 2008 2009 2010 2011

The CRI evolution

2001 2006 2008 2009 2010 2011

1993

From theory to practice: applying Porter’s theories and learning by doing

Execution through own teams of top-level consultants

Building the Consulting Manual: a collection of errors

Initial Years: Spain

The CRI evolution

2008 2009 2010 2011

20061993 2001

First experiences with methodology transfer:

– CRI execution by new local teams, hired by the client

– Improvement of On-line methodology tutorial

Feedback to policy through local Steering Committee

Triangle Region (Denmark)

+

The CRI evolution

2008 2009 2010 2011

20061993 2001

… at the same time in Latin America…

The CRI evolution

2009 2010 2011

20081993 2001 2006

21 CRIs in two yearsLarge scale methodology transfer:– Joint Training Sessions (3) to

benefit from economies of scale

– Intensive tutoring combines virtual and on-site support

– Execution by existing local teams

1 policy seminar with limited client involvement and follow up

7 Northern Regions (Chile)

The CRI evolution

2010 2011

2009-20101993 2001 2006 2008

14 CRIs in parallel in 1 yearProves scalability of the Chilean experience:– Joint Training Sessions

(7) to increase sharing of experiences

– Intensive involvement of client teams

Continuous Policy Feedback

Sao Paulo (Brazil)

The CRI evolution

2010 2011

2011-121993 2001 2006 2008

Standardized training materialsOpen source6 weeks in class 1 parallel CRI with tutors (8 m)2nd CRI (8 m)Certification

European Union

The CRI evolution

Cluster-Excellence.EU training materials (I)

Knowledge area Concepts /tools Cases studies and materials

CLUSTER ECONOMICS

Location theoryIndustrial DistrictsClustersInnovation Systems

Finland and Nokia (HBS)Singapore (HBS)New York (HBS)California Wine (HBS)

CLUSTER INITIATIVES SCREENINGS

Statistical cluster mapping (econometric foundations, statistical analysis)Cluster initiative selection (industry analysis and segmentation, value chain and system)

Cluster Initiative Selection Note(REGX)Screening in Yorkshire (IESE)Screening in Vastra Gotaland (IESE)

INDUSTRY ANALYSIS AND SEGMENTATION

Industry analysis (5 forces)Strategic segmentation

Cirque du Soleil IINSEAD)Montreal Circus Cluster (IESE)Avocado Valparaiso (Competitiveness)

VALUE CHAIN ANALYSIS

Value chainLocal value systemGlobal value system

ZARA and Catalan Textile (HBS/IESE)Antombel (HBS/IESE)

BENCHMARKING Advanced Buyer Purchase CriteriaKey Success FactorsValue Chain Activity benchmarking

Seafood in Humber (IESE)Ventilation in Boras (IESE)

Cluster-Excellence.EU training materials (II)

Knowledge area

Concepts /tools Cases and materials

CHANGE MANAGEMENT

Individual behavioral changeGroup changeCommunication strategiesPresentation skills

Estonia in Transition (HBS)IT in Estonia (BIA)Geothermal Cluster in Iceland (IESE)

CLUSTER ORGANIZATION MANAGEMENT

Organizational structuresNon-profit organization managementPattern identification

Oill drilling in Soderlandet (Innovation Norway)

PROJECT MANAGEMENT

Project planningProject monitoringProject evaluation

Clusterland Upper Austria (IIESE)SEBRAE MG (Competitiveness)

CONTINUOS POLICY INPUT

Policy reviewDiamond analysisNationals and supranational competitiveness framework

Cluster Policy in Catalonia (GC)Policy implications of ITC Cluster in Aalborg (REGX)

CLUSTER POLICY EVALUATION

Cluster management evaluationCluster policy monitoringImpact analysis

Cluster Policy Evaluation in Norway (Innovation Norway)

Why methodology transfer?

Strategic change is a long term process: local teams are best positioned to ensure cluster assimilation of the strategy– Long term interaction with local companies

and institutions, with regular strategic updates

– Ensures implementation of the action lines that result from the CRIs

Builds local capacity to incorporate CRI tool into longer term regional development programs

Results: Example of feedback from Brazil

“For SEBRAE-Minas Gerais, this new methodology allowed us to change the way we relate to our clients, achieving a more intelligent dialogue about their strategic needs.

That in turn, allowed us to start changing our own structure in SEBRAE-MG, to contribute to our clients being more competitive in the long term , turning ourselves in to a source of knowledge and analysis.”

Lina Volpini Manager Intl. MarketsSEBRAE MG - Brazil

10 April 202328

Thank you for listening!

Emiliano Duch– Emiliano.duch@competitiveness.com– Educh@iese.edu

– www.competitiveness.com– www.cluster-excellence.eu