Cluster Development in 12 Steps Cluster Development in 12 Steps TCI Auckland conference Ifor Ffowcs-Williams Cluster Navigators Ltd 29 November 2011 1. Introducing a process for starting a clustering initiative 2. For renewal, revitalisation of a current clustering initiative 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 1
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 Forming the Leadership Group, the cluster s Governance Cluster Leadership Bus It takes time to get: 1. The right people on the bus, in the right seats 2. The wrong people off the bus 2
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 Step 7: Short term, tactical agenda Immediate projects that demonstrate the value of collaboration Project implementation Moving quickly into action Strategic Tactical 1 st Generation Initiatives 2 nd Generation Initiatives Build teams around the priority action projects CATs Cluster Action Teams Teams work best if members select themselves And self-destruct on task completion Easy, quick Complex, long term 3
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 4
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 5
Step 12 Review, evaluation 36 months after launch Upgrading a cluster s competitiveness 12 Step process design principles A health check with two dimensions: Clustering process impact Is the competitivness of the cluster being upgraded? 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 Cluster strategy workshops A mutual learning process 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 Development REALLY UGLY PRACTICES IN CLUSTER DEVELOPMENT 1. EXCESSIVE GOVERNMENT CONTROL Results from an interactive workshop TCI Delhi, December 2010 2. OVER EMPHASIS: PLANNING & REPORTS 3. UNDER EMPHASIS: ACTION & RESULTS! 6
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 E4@clusternavigators.com + 64 3 548 0606 www.clusternavigators.com www.linkedin.com/in/clusterdevelopment Skype: clusterguy Blog: www.e4oncompetitiveness.com 7