International Days Training Session

26 & 27 February 2014, Vilnius

Nicolai Sederberg Rottbøll

Self Introduction: Who am I?

Basically• 39 years old homo sapiens sapiens

Some specific characteristics• Extremely curious and learning driven• Bohemian neurons embedded in an cleantech-structured

brain (or the other way round)• Sensitive to the human side of people

What have I done so far?• Confederation of Danish Industries (DI)• Copenhagen Capacity • Copenhagen Cleantech Cluster (CCC)• International Cleatech Network (ICN)• Quercus Group

Quercus Group“Trusted Advisors in Regional Economic Development”

www.quercus-group.com

Co-trainers and case providers

Peter Bjørn LarsenCopenhagen Cleantech Cluster

Linas EriksonasCluster for Plastics and Novel Materials

Algis GaldikasPhotovoltaic Cluster

Valerie Ayache and Severine LebretonMedic@lps

Who are we today?

a)Name, organisation, position, country

b) Expectations of the next two days

(30 seconds version)

Business models, Inter-clusterCollaboration and Cluster Labelling

Innovate Project2nd International Training26th-27th February 2014

Vilnius

Programme

Wednesday 26th

09.00 - 09.15 Welcome, introduction to programme and participants

09.15– 10.15 Module 1: Business models for running a cluster:

- Overall strategic considerations for clusters- What services should clusters offer its members?

10.15 – 10.45 Coffee break

10.45 – 11.15 Cases: Member services in practice:

- Case 1: Copenhagen Cleantech Cluster/ Peter Bjørn Larsen- Case 2: Medic@lps/ Valerie Ayache and Severine Lebreton- Case 3: Cluster for Plastics and Novel Materials/ Linas Eriksonas

11.15 – 12.00 Group exercise:

- How to develop a strong value proposition towards members?

12.00 – 13.00 Lunch break

13.00 - 13.45 Wrap-up on group exercise

13.45 – 14.30 Module 2: Access to finance for clusters and members:

- Financial models of clusters- EU funds – and how to find you way in the EU jungle- Criteria for different sources of finance

14.30 – 15.00 Break

15.00 – 15.45 Cases: Business models and financial setups for clusters:

- Case 1: Copenhagen Cleantech Cluster/ Peter Bjørn Larsen- Case 2: Medic@lps/ Valerie Ayache and Severine Lebreton

15.45 – 16.45 Group Excercise: How to get access to finance (case of your selection)

16.45 – 17.00 Wrap-up on day 1

Thursday 27th

09.00 - 09.15 Wrap-up from day 1 and introduction to day 2

09.15– 10.00 Module 3: Inter-cluster collaboration:

- Cross sectoral cluster cooperation- Inter cluster collaboration – how to go international

10.00 – 10.15 Break

10.15 – 11.15 Cases: Inter-cluster collaboration:

- Case 1: Copenhagen Cleantech Cluster/ Nicolai Rottbøll- Case 2: Cluster for Plastics and Novel Materials/ Linas Eriksonas- Case 3: Medic@lps/ Valerie Ayache and Severine Lebreton

11.15 – 11.30 Break

11.30 – 12.00 Group exercise

12.00 – 13.00 Lunch break

Thursday 27th

13.00 – 14.00 Module 4: Cluster labelling:

- What is cluster labelling- Why cluster labelling- Types of certification- Pros and cons

14.00 – 14.45 Cases: Cluster labelling:

- Case 1: Copenhagen Cleantech Cluster/ Peter Bjørn Larsen- Case 2: Cluster for Plastics and Novel Materials/ Linas Eriksonas

14.45 – 15.15 Break

15.15 – 15.45 Group exercise and discussion

15.45– 16.15 Wrap-up and final remarks

Module 1: Business models for running a cluster:

Business models, triple helix, NABC analysis, cluster organisation, strategic choices, services.

Module 1:Business Models for running a cluster

“[Clusters are] geogra-phic concentrations of inter-connected enterprises, specialised suppliers, service providers, firms in related industries, and associated institutions (for example univer-sities, standards agencies, and trade associations) in particular fields that compete but also co-operate.”

Michael Porter, Harvard Business School, USA

Clusters drive innovation, productivity and competitiveness through collaboration between business, research institutions and public authorities.

!

Industry

State/Reg. government

Academia/Research

Competitiveness at the company level

• Business case and organi-sational and operational excellence

Competitiveness at the Industry/sector

level • Clusters

Competitiveness at the national level

• Macro policy excellence

Competitive companies are prerequisites for a competitive region & vice versa

Growing a company is complex

Business success ?

New product line ?

Better ROI ?Improved

productivity?

New Markets ?

• Export promotion• Market analysis• Language skills• Legal assistance• Standards• Export guarantees• Exchange rates

• New Technology• Organisation & New

modes of production• Legal contracts • New materials

• New skills• Human skills

development

• Adm. Predictability• Comp. Banking

sector• Skilled staff• Support programs

Financial considerations behind your business model

• Public funding:• Local, National funds• Development, regional funds (EU, World

Bank etc.)

• Private/Industry funding:• Member fees (What make members

willing to pay?)• Paid activities (What activities should be

paid?)• Sponsors (What make sponsors willing to

pay?)

Funding opportunities

Rule No. one:

Make sure that you can answer the ”What’s in it for me” – question for each financial source – by understanding their interests and pains

Service portfolio: What services should a cluster offer for its members?

Membership Fees

• Why should the members pay a fee?

– Value proposition– What is it for members?

Value proposition

“Robotdalen supports innovators, entrepreneurs, researchers and businesses in developing and commercializing their robot innovations”

“We offer competence within product development, technical analysis, simulation, business development and market development”

“CleanTech North provides member companies with a wide range of unique benefits that will assist them in expanding and growing their business to be successful in Canada and within the global market.”

Value preposition

Be aware of:

• Have a value proposition before a fee

• Return on investment is often not clearly defined at early stages of cluster development

• Some members do not have the resources

How to determine the membership fee?

• members’ will to pay

• according to the size of the member

• low fee: paid services

• high fee: services included

• Need of member: how valuable does the member consider your service

Paid Services

Payment for services offered by management and also usable for external players:

• training courses • meetings• measures of recruitment• matchmaking • events• among others

Sponsors

• Local champions• Special events

Service for members

• Networking • Events • Securing funding • Marketing International

services

Medical Valley Cluster Current Financing

Possible Future Financing

Membership fees:€200 to €5,000 /member

7% 15%

Management Contracts, incl. an Innovation Centre

26% 30%

Sponsors, four premium 16% 30%

Public funding: EU, national and Bavarian State agencies

51% 25%

Total Funding €763,000 €763,000

Understanding your cluster

• Clusters differ greatly in terms of focus, access to resources, sectors, activities, organisationand priorities.

• Which priorities characterize your cluster?

“Personal business partner”

• Focus on services thatsupport the single member company’sbusiness

• Operates as a consultantfirm

• Employees have experience from private companies in the cluster

“Investor”

• Consortium of companies that want to invest

• Focus on single companies, not the cluster as such

• Members deliver services to start-ups and entrepreneurs

“Minimalistic and member driven”

• 1 employee only

• Very active members that organise themselves in working groups

• Tiny budget

“Project developer”

• Facilitates the formation of consortiums which initiates and fund large projects

• Outsourcing daily operations to private company

• Board of Directors take active part in project development

“Lobbyist”

• Members get influence, but no services

• Focus on political framework conditions

• Focus on large projects that create concrete results

“Networks and branding”

• Activities are focusing on creating networks between members and internationally

• Life Science Ambassador Program with 12 international clusters

• Strong brand

Strategic choices

Services

Political activist

Outside-in

Branding

Business

Focus

development

Pacifist

Inside-out

Network

Technology

Diversity

#1

Strategic choicesServices

Political activist

Outside-In

Branding

Business

Focus

Development

Pacifist

Inside-Out

Network

Technology

Diversity

#2

Strategic choicesServices

Political activist

Outside-In

Branding

Business

Focus

Development

Pacifist

Inside-Out

Network

Technology

Diversity

#3

Strategic choicesServices

Political activist

Outside-In

Branding

Business

Focus

Development

Pacifist

Inside-Out

Network

Technology

Diversity

#4

Strategic choicesServices

Political activist

Outside-In

Branding

Business

Focus

Development

Pacifist

Inside-Out

Network

Technology

Diversity

#5

Strategic choicesServices

Political activist

Outside-In

Branding

Business

Focus

Development

Pacifist

Inside-Out

Network

Technology

Diversity#6

Benefits of a Service Portfolio

• intensifying and stabilizing interaction between cluster members

• reduce the time and costs spent by cluster members

• allow cluster members to focus on their core activities

The way you organise yourselves is critical for achieving your vision, mission and goals – and thus for implemetingyour business model

Board

Secretariat

Part

ner

#1

Part

ner

#2

Part

ner

#3

Part

ner

#4

Part

ner

#5

Part

ner

#6

Part

ner

#7

Part

ner

#8

Part

ner

#9

Part

ner

#10

Part

ner

#11

Example 1: ”Programme leader”The cluster manages a large project with partners

Services to stakeholders Services to stakeholders

The role of the board is to act as stearing committee to ensure project output

The Secretariat is the daily project manager and facilitates cooperation between project partners

Stakeholders have access to services for free

Finances consist of public funds (regional + international)

Offer to members: Sponsor contract, visibility/ branding

Cluster organisation

Cluster

Board

Secretariat

Example 2: ”Consultancy firm”The cluster delivers a number of services to paying members

The role of the board is to ensure that the secretariat delivers valuable services to members

The responsibility of the Secretariat is to provide members with services and lokk after their interests

Stakeholders get access to services if the sign up for membership

Finances comes from paying members who recievesservices in return

Offer to members: Services/ consultancy service

Services

Paying members

Cluster organisation

Cluster

Stakeholders (potential members)

€

Cluster organisation

Cluster

Paying members

€

Impact

Example 3: ”Developer/ facilitator”The cluster develops a number of projects and facilitates cluster cooperation

The role of the board is to point out the strategic direction for the development of the cluster

The role of the Secretariat is to delevop projects that create value for members and the cluster. Some projects are driven by the secretariat, others are driven by partners

Stakeholders are invited to participate in projects

Finances come from paying members (small percentage), main finances ”by project”

Offer to members:Influence on new projects, Invitation to participate actively in the projects

Stakeholders (potential members and project participants)

Sekretariat

Board

Learning from Module 1:

• Clusters differ greatly (no single recipe)• Don’t do anything before you know the passions and

pains of the companies• Create your business model and organise your cluster in

a way that serves the passions and pains of companies best

Cases, Member Services in practice:

• Case 1: Copenhagen Cleantech ClusterPresented by Peter Bjørn Larsen

• Case 2: Medic@lpsPresented by Valerie Ayache and Severine Lebreton

• Case 3: Cluster for Plastics and Novel MaterialsPresented by Linas Eriksonas

Group exercise:

How to develop a strong value proposition toward members?

NABC analysis/ pitch

N – Need

A – Approach

B – Benefit

C – Competition

N - need

Which need(s) do you solve – and for whom?

A - approach

How are we solving/ tackling that need ? What’s the uniqueness of our solution? (describing your

solution/ project/ service)

B - benefit

How does the customer (member) benefit from your solution/ service?

What is the effect of what we do?

C - competition

Why is our solution better that other solutions?

Formulate the NABC of yourcluster…

…or organisation (how do yourorganisation support clusters?)

Groups of 4

Module 1: Group exercise:

How to develop a strong value proposition toward members?

Wrap-up

Module 2:Access to Finance

Module 2: : Access to finance for clusters and members:

Financial models; private funding, membership fees, services; public funding, EU funds

Financial considerations

• Public funding:• Local, National funds• Development, regional funds (EU, World

Bank etc.)

• Private/Industry funding:• Member fees (What make members

willing to pay?)• Paid activities (What activities should be

paid?)• Sponsors (What make sponsors willing to

pay?)

Funding opportunities

Rule No. one:

Make sure that you can answer the ”What’s in it for me” – question for each financial source – by understanding their interests and pains

Public or Private Funding?

Cluster % Membership fees

% Public Funding

Cluster 55º, IT, Sweden 50% 50%

Images & Réseaux, Rennes, France 56% 44%

Green Building Cluster, Lower Austria 30% 70%

Automotive Region Stuttgart, Germany 70% 30%

There is NO single recipe

Source: Cluster Development: The Go-to Handbook 2012

But there is one tendency…

Source: The Cluster Initiative Greenbook 2003

Public Funding

Find your way in the EU

JUNGLE

EU Funding 2014-2020 New Plan

Types of EU funding

2 types:

Funds whose management is shared between the EU and the Member States (Structural and Cohesion Funds)

Funds which are managed centrally by the European Commission (research, environment and external action funds)

DG “Fundings”

DGs (Department Generale) of the EU Commission where you can apply for funding for your cluster:

• DG Regio• DG Research• DG Enterprise

• List of DG’s in Europe

3 DG’s &Cluster Development

COSME

DG ENTR(Enterprise Industry)

HORIZON 2020

DG RTD(Research & Innovation)

Structural Funds

-Cohesion Fund

-ERDF

-Social Fund

DG Regio

Smart Specialisation Platforms & RIS3

WHAT ARE THEY & WHAT DO THEY STAND FOR?

National/regional research and innovation strategies for smart specialisation (RIS3) are integrated, place-based economic transformation agendas.

RIS3:What’s in for the clusters?

SMART SPECIALISATION PLATFORMS

Online S3 platform

Where is Lithuania on the map…

Lithuania: Towards a RIS3 strategy(RIS3)

…towards the RIS3 strategy

3 DG’s &Cluster Development

COSME

DG ENTR(Enterprise Industry)

HORIZON 2020

DG RTD(Research & Innovation)

Structural Funds

-Cohesion Fund

-ERDF

-Social Fund

DG Regio

ERDF (European Regional Development Fund)

Innovation and

research

Digital agenda

Support for small and medium

sized enterprises

Low-carbon economy

(European Regional Development Fund)

Territorial Programs

ERDF

Transnational(13)

International InterReg Europe

(1) Cross Border(53)

Cross Border Co-Operation

AIM:• reduce the negative effects of

borders as administrative, legal and physical barriers

• tackle common problems and exploit untapped potential

• Cross border cooperation programmes

Cross Border Co-operation

Deals with:

o Entrepreneurship (especially the development of SMEs, tourism, culture and cross-border trade)

o Natural resources

o Links between urban and rural area

o Transport and communication networks

o Infrastructure

o Employment and equal opportunities work

Case: Bringing neighbors closer to Latvia

• Latvia - Lithuania Cross Border Cooperation Programme

Case points

• Sustainable and equal socio-economic development in border regions

• Co-finances up to 85% of the total eligible project costs

• Project partners : national, local, regional, NGO’s

Interregional Co-operation

AIM:

• Builds networks : develop good practice and facilitate the exchange and transfer of experience by successful regions

• Showcases what regions do well to the benefit of those still investing

E.g. INTERREG IV C (2007-2013)- enables EU regions to work

together - 2 priorities : innovation and the

knowledge economy + environment and risk prevention

- ERDF contribution: €321 million.

Interregional Co-operation

• Local and regional level• Thematic networks and working groups between cities, conferences and

the development of tools• ERDF contribution: €53 million

Countries: EU-27, Norway and Switzerland

URBACT II“Urban Act”

• Scientific information for the development of regions and larger territories :applied research, analysis and tools

• ERDF contribution: €34 millionCountries: EU-27, Norway, Switzerland, Iceland and Liechtenstein

ESPON"European Spatial

Planning Observation Network"

• Provides training, services and tools to programme managers and administrators of co-operation programmes in order to improve the management of these programmes

• Countries: EU-27,ERDF contribution: €34 million.

INTERACT II

Interregional Co-operation

Applications for Funding:

• Useful links:1. Program funding2. Country specific information: Lithuania

CASECLOE-Clusters linked over Europe

• ABOUT CLOE

Case Points

• Informal alliance of clusters all around Europe

• Create a European network of clusters

• Workshops

• Network

Transnational Co-operation

AIM:

• regional development, developed from analysis at a European level

• communication corridors, flood management, international business and research linkages, and the development of more viable and sustainable markets

Transnational Co-operation

Deals with:

• Innovation (SME’s)

• Environment (water resources, rivers, lakes, sea)

• Accessibility (telecommunications + networks)

• Sustainable urban development

CASEThe Baltic Sea Region

• EU Strategy for the Baltic sea region (video)• Baltic sea region program success story

Case Points

• 8 EU Member states

• Development towards a sustainable, competitive and territorially integrated Baltic Sea Region (BSR) by connecting potentials across borders

• Environmental pressures

• Safety and security

Wrap-up:Co-operation programs

Application for funding

• Joint Technical Secretariats of the co-operation programmes.

• Contact data of the Joint Technical Secretariats can be found here

3 DG’s &Cluster Development

COSME

DG ENTR(Enterprise Industry)

HORIZON 2020

DG RTD(Research & Innovation)

Structural Funds

-Cohesion Fund

-ERDF

-Social Fund

DG Regio

Social Fund

• People

• Improving employment and education opportunities across EU

• Covers all EU regions

• ~€ 74 billion for 2014 -2020 (€ 3 billion allocated to the Youth Employment Initiative)

• European Social Fund rules

• ESF website

Social Fund

• 4 AREAS:

1. Strengthening employment & mobility

2. Better education

3. Giving a change to all

4. Better public services

3 DG’s &Cluster Development

COSME

DG ENTR(Enterprise Industry)

HORIZON 2020

DG RTD(Research & Innovation)

Structural Funds

-Cohesion Fund

-ERDF

-Social Fund

DG Regio

Cohesion Fund

• Member States whose Gross National Income (GNI) per inhabitant is < 90 % of the EU average

• Strengthens economic and social disparities

• Promotes sustainable development

• ~€ 66 billion

• Rules for the Cohesion Fund

Cohesion Fund Forecast

Cohesion Fund

• 2 AREAS:

1. trans-European transport networkse.g.: infrastructure projects under the

Connecting Europe Facility

2. environment: renewable energy or transport

3 DG’s & Cluster Development

COSME

DG ENTR(Enterprise Industry)

HORIZON 2020

DG RTD(Research & Innovation)

Structural Funds

-Cohesion Fund

-ERDF

-Social Fund

DG Regio

Horizon 2020

• Biggest EU Research and Innovation program– nearly €80 billion – available over 7 years (2014 - 2020)– Horizon 2020 access

• Aims to increase Industrial Leadership by:– Supporting key technologiese.g.: microelectronics, advanced manufacturing, etc. across existing and emerging sectors– Supporting the increase of innovative

SMEs in Europe.

Horizon 2020Find the area where u want to apply

4 step-Application process1. Submit your proposal-online

2. Find your partners-~ 3 partners-partner search options

3. Evaluation by experts-evaluated by a panel of independent specialists in their fields-5 months duration

4.Grant agreement- what research & innovation activities will be undertakenthe project duration, budget, rates and costs, the European Commission's contribution, all rights and obligations -3 months for signing the grant agreements

CASE :How plants evolved and what it means to our food supply

Case Link

3 DG’s &Cluster Development

COSME

DG ENTR(Enterprise Industry)

HORIZON 2020

DG RTD(Research & Innovation)

Structural Funds

-Cohesion Fund

-ERDF

-Social Fund

DG Regio

COSME

• EU program for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs)

• The fund goes to financial institutions->clusters

• Running: 2014 -2020

• Budget: €2.3bn

• COSME at a glance

COSME

COSMEAccess to Finance

• 2 programs:

1. The Loan Guarantee Facility

2. The Equity Facility for Growth

• Finance at a glance:

Better access to finance for Small and Medium-sized Enterprises (SMEs)

Financial considerations

• Public funding:• Local, National funds• Development, regional funds (EU, World

Bank etc.)

• Private/Industry funding:• Member fees (What make members

willing to pay?)• Paid activities (What activities should be

paid?)• Sponsors (What make sponsors willing to

pay?)

Funding opportunities

Private/Industry Funding

• Membership fees

• Paid activities

• Sponsors

Module 2: Cases, business models and financial setups for clusters

• Case 1: Copenhagen Cleantech ClusterPresented by Peter Bjørn Larsen

• Case 2: Medic@lpsPresented by Valerie Ayache and Severine Lebreton

Group discussion

Learning from Module 2:

• Define financial strategy (including ”what’s in it for me” scenarios)

• Before charging fees, define a value proposition• Make sure to be in line with your RIS strategy when

applying for EU funds

Wrap-up from Day 1:

• Module 1: Business models for running a cluster:– Business models, triple helix, NABC analysis, cluster

organisation, strategic choices, services.

• Module 2: Access to finance for clusters and members:– Financial models; private funding, membership fees,

services; public funding, EU funds

• Thank you for day 1!

Group exercise

International collaboration: Write a draft pitch on an international cluster-to-cluster project that you want to getfinanced by the EU

- Why should you work internationally?- What should the outputs of international cooperation be?- What’s in in for the EU?- What’s the ideal financial model for your cluster. Why?