cluster basics: cluster development in twelve steps

TCI Conference, Auckland, NZ Cluster Development in 12 Steps

© Cluster Navigators Ltd 2011

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TCI Auckland conference Ifor Ffowcs-Williams

Cluster Navigators Ltd 29 November 2011

Cluster Development in 12 Steps

1.  Introducing a process for

starting a clustering initiative

2.  For renewal, revitalisation of a current clustering initiative

Cluster Development in 12 Steps

Step 1 Cluster development A centre stage strategy, rather than ‘another project’

A comprehensive framework for a range of economic development agendas, including: •  Skills, training; workforce development •  SME development; New business start-ups •  Investment attraction; migrant attraction •  Export development, internationalisation •  Rural, community development; •  Incubators; Industry/Technology Parks…

Step 2 Identifying, prioritising clusters Segmenting the local economy

•  The majority of jobs and businesses in every local economy are the same: •  Restaurants, retail, health care, house

building, vehicle repair… •  In general around one third differ:

•  The traded sector •  Firms in this sector drive the local

economy, pull in the wealth



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Step 3 Initial cluster analysis Building the base

Two thrusts: •  Initial competitiveness diagnosis,

fact based, understanding cluster’s current situation: structure, scale, opportunities, constraints, culture …

•  Establishing platform for action, Introducing the process; motivating key stakeholders to participate; identifying potential leaders ...

Cluster analysis Developing a shared understanding across the cluster on competitiveness

It takes time to get: 1. The right people on the bus, in the right seats 2. The wrong people off the bus

Cluster Leadership Bus

Forming the Leadership Group, the cluster’s Governance



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Step 5. The preferred future The Vision

Building on the cluster’s current competitive position … with a challenge,

a s t r e t c h factor

Step 6 Identify stepping stones

•  Looking back from the future …Back casting

•  Not a continuation of the present …Forecasting

1st Generation Initiatives

2nd Generation Initiatives

Easy, quick Complex, long term

Strategic

Tactical

Step 7: Short term, tactical agenda Immediate projects that demonstrate the value of collaboration

Project implementation Moving quickly into action

•  Build teams around the priority action projects

•  CATs…Cluster Action Teams •  Teams work best if members select

themselves

•  And self-destruct on task completion



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Step 8: Take time in formalising the cluster’s structure

•  Firms, especially SMEs, want early benefits •  Not lengthy discussions on

structure

•  Can take time for: •  The cluster’s boundaries to emerge •  The cluster’s Leadership Group to

be identified

Step 9 In-depth analysis, benchmarking

Fact based, outward focussed analysis

•  Fundamentally understanding the cluster’s competitive position, the local specialisation

•  Benchmarking v. reference clusters

Benchmarking visits Example: Norway’s Mountain Tourism cluster visit to Banff, Canada

•  Benchmarking visits provide a collaborative learning opportunity

•  Builds connections, trust, social capital amongst the travellers

•  B2B links often develop during a visit

•  Visits can provide important motivating data shocks



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Step 10: Long-term strategic agenda Establishing a portfolio of initiatives that could include: • Market development, exporting, cluster brand • Training, up skilling • Technology/R&D; test beds • SME development: incubator, equity $... • Developing local connections • FDI & talent attraction….

Step 11 Linking the cluster Building on a solid understanding of the cluster’s strengths

Three levels of leverage: 1.  With other regional clusters 2.  Nationally, with related clusters 3.  Internationally

•  Fostering specialisation between clusters •  Building B2B and academic links

A portfolio of clustering initiatives Gävle, Sweden’s Cluster suitcase

The Regional Innovation System



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Step 12 Review, evaluation 36 months after launch

A health check with two dimensions: •  Clustering process impact •  Is the competitivness of the cluster

being upgraded?

Upgrading a cluster’s competitiveness 12 Step process design principles

1.  Change from the status quo never comes easy

2.  Successful transformation needs to be driven by a coalition of volunteers

3.  Real transformation takes time 4.  Short term wins build the credibility to

address bigger problems

Cluster development Drawing on both sides of the brain

Logic Details

Safe

Feelings Big picture Risk taking

•  Open to all; consensus building •  Depoliticise decision-making; gather

the facts •  Not the ‘wisdom of the elite’ •  But the ‘wisdom of the crowd’ •  Capture hearts as well as minds

Cluster strategy workshops A mutual learning process

Cluster Development

Results from an interactive workshop TCI Delhi, December 2010

REALLY UGLY PRACTICES IN CLUSTER DEVELOPMENT

1.  EXCESSIVE GOVERNMENT CONTROL

2.  OVER EMPHASIS: PLANNING & REPORTS

3.  UNDER EMPHASIS: ACTION & RESULTS !

Source: TCI Delhi Workshop



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Bad practices in cluster development ��

1.  Inappropriate government incentives 2. Limited inclusiveness 3.  Failure to find, map common ground 4. Facilitators lose neutrality


Good practices in cluster development

1.   Industry led 2.   Clear articulation of public service needs 3.   Making connections, bridging gaps 4.   Full Triple Helix engagement 5.   Emergence of natural leaders 6.   Professional cluster facilitation &

management 7.   Cluster platform for cross-sectoral

cooperation


Advice to a new cluster facilitator 1.   Listen! 2.   Build relationships; make connections 3.  Have Passion

4.   Start with what requires low trust 5.   Energise others; Find the cluster champion(s) that

others trust 6.   Analyse and initiate; Identify goals 7.   Create benefits & buy-in; Get things done 8.   Be patient; Be transparent; Keep smiling 9.   Long term orientation to goals & strategies


Lars Albaek Bornholm, Denmark

‘It is easier to cooperate in

smaller

groups of firms’

Mats Williams Center for Strategy & Competitiveness

Stockholm School of Economics

‘Find the

BIG QUESTIONS that are common’

Ifor Ffowcs-Williams

CEO, Cluster Navigators Ltd 22 Examiner St, Nelson 7010

New Zealand

[email protected] + 64 3 548 0606

www.clusternavigators.com

www.linkedin.com/in/clusterdevelopment Skype: ‘clusterguy’

Blog: www.e4oncompetitiveness.com

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