tcioceania15 internationalization and global value chains: the agenda for cluster initiatives

Internationalization and Global Value

Chains: The Agenda for Cluster Initiatives Christian Ketels

17 April 2015

2nd Australasian Cluster Conference

Internationalization and Global Value Chains:

The Agenda for Cluster Initiatives

Dr Christian H. M. Ketels

Institute for Strategy and Competitiveness, Harvard Business School

President, TCI Network

[email protected]

3 Copyright 2014 © Christian Ketels

Some Facts About Internationalization

Overall trade

• Dramatic increase in trade volumes in prior to the global crisis;

significantly lower export growth since then

• Trade remains dominated by goods, but service exports are growing

much faster

Locations

• Significant increase in the number of locations engaged in global trade

• Exports largely take place among neighboring countries

• There is a significant relationship between a country’s stage of

economic development and the profile of its exports


Some Facts About Internationalization The Firm Perspective

• Exporting is for high-performers; exporting companies rate stronger on

a range of quality indicators that non-exporting peers

• Exporting is risky; a large number of export attempts to new markets is

discontinued after a short amount of time

• Trade is dominated by large companies; there is a strong relationship

between MNC presence and exports

• The growth in global trade has been driven by trade of intermediate

goods within related companies, i.e. international trade between

subsidiaries of an MNC


Some Facts About Internationalization Global Value Chains

• The growth in global trade has been driven by trade of intermediate

goods, i.e. trade of components and intermediate inputs

• This trade is a reflection of value chains being stretched out across

different locations (‘un-bundeling’) to take advantage of activity-specific

location benefits

• While economic activity has become much more dispersed along these

global value chains, value added has moved to a much smaller degree

• Clusters are an important instrument for locations that are part of global

value chains to increase their share of value added

6 Copyright 2014 © Christian Ketels Source: OECD (2013)

The OECD GVC Participation Index

2009

• Location

• Industry mix

• Size

• Stage of Economic Development

DRIVERS


Global Value Chains and Value Capture One Finnish Bicycle Company: Three Production Sites

Source: ETLA (2013)

Who

captures

the value?

Where is

the value

captured?


Clusters and Global Value Chains

Local Buzz Global Pipelines &

More attractive for

international partners

Better able to benefit from

international partnerships


Evolution of Cluster Initiatives’

Internationalization Activities

Export Promotion

Policy Learning

Commercial Collaboration


Types of Linkages between Clusters

Cluster participants Cluster participants

Cluster

initiative

Cluster

initiative

Commercial

collaboration

Policy

learning

Joint services


Internationalization Strategy

of your Cluster Organization (1)

• What are the objectives of your internationalization activities?

– Open additional markets for your firms

– Strengthen access to critical knowledge or technologies

– Collaborate with other locations to provide an integrate offering

– Attract activities to strengthen your local cluster

– …

Tools to use for a fact-driven definition of objectives

• Performance diagnostics

• Cluster mapping

• … Critical to engage cluster

initiative stakeholders in

this process; needs to

reflect their needs


Cluster Diagnostics

Performance

Patterns

Profile of the

Cluster

Quality of Cluster

Participants



of your Clusters Organization (2)

• What services should you offer to whom in order to achieve your

objectives?

– Needs-based segmentation of your market

• Within the cluster/outside of the cluster

• SMEs/large companies

• …

– Definition of your product/service portfolio

• Information services

• Joint activities

• …

Explore and leverage the

offerings of the

national/regional agencies

supporting trade and FDI



of your Clusters Organization (3)

• Which locations should you target in your activities?

– Identify geographies based on you objectives

– Look for intermediaries, often cluster organizations, in this location

Tools to use for an identification of target locations

• Company interviews

• Mapping of current international linkages of your cluster

• Cluster mapping

• Networks of cluster organizations

• …


Clusters and Cluster Organizations International Sources of Information

www.

tci-network.org

www.

clustermapping.us

www.

clusterobservatory.eu

www.

ec.europa.eu/growth/

smes/cluster/

index_en.htm

http://ec.europa.eu/enterprise/initiatives/cluster/index_en.htm








Your Partner for Effective Cluster Efforts

www.tci-network.org


The TCI Network

• Who are we?

• What do we do?

• What’s in it for you?

The leading global network

of professionals and organizations

active in cluster-based economic

development

GLOBAL

PRACTITIONERS

CLUSTER-BASED

ECONOMIC DEVELOPMENT

www.tci-network.org


The TCI Network: Activities

• Who are we?

• What do we do?


Support the effective use

of cluster-based economic development

approaches to raise

the competitiveness and innovative capacity

of firms, cities, regions and countries

ENABLE COLLABORATION

SHARE KNOWLEDGE

CREATE KNOWLEDGE

www.tci-network.org


The TCI Network: Becoming a Member

• Who are we?

• What do we do?


Up-to-date information

from the global cluster community

Reduced fees for TCI Conferences

Access to high-quality contacts

and organizations around the world

Access to and inclusion in databases on

clusters, cluster programs, and experts

Specific member activities like

mentoring, peer reviews, interest groups

Exposure and global visibility

on TCI communication channels

Ability to draw on TCI support

in funding applications www.tci-network.org


www.tci2015.org

Welcome to Daegu, Korea!

http://www.tci2014.org/

tcioceania15 internationalization and global value chains: the agenda for cluster initiatives

Economy & Finance

global trade exports

christian ketels clusters

christian ketels source

international trade

reflection of value

value capture

share of value

global crisis