Cluster basics: Cluster Development in Twelve Steps
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This document outlines a 12 step process for cluster development. It begins with identifying and prioritizing industry clusters in a local economy. The next steps include initial cluster analysis, developing a shared understanding of competitiveness, and establishing a vision for the preferred future state. Later steps focus on short and long-term strategic agendas through benchmarking, linking clusters nationally and internationally, and periodic reviews to upgrade competitiveness. The process aims to drive economic development through industry collaboration rather than isolated projects. It emphasizes the importance of building relationships and finding common ground to achieve real transformation over time.
Cluster basics: Cluster Development in Twelve Steps
- 1. TCI Conference, Auckland, NZ Cluster Development in 12 Steps © Cluster Navigators Ltd 2011 1 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
- 2. TCI Conference, Auckland, NZ Cluster Development in 12 Steps © Cluster Navigators Ltd 2011 2 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
- 3. TCI Conference, Auckland, NZ Cluster Development in 12 Steps © Cluster Navigators Ltd 2011 3 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
- 4. TCI Conference, Auckland, NZ Cluster Development in 12 Steps © Cluster Navigators Ltd 2011 4 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
- 5. TCI Conference, Auckland, NZ Cluster Development in 12 Steps © Cluster Navigators Ltd 2011 5 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
- 6. TCI Conference, Auckland, NZ Cluster Development in 12 Steps © Cluster Navigators Ltd 2011 6 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
- 7. TCI Conference, Auckland, NZ Cluster Development in 12 Steps © Cluster Navigators Ltd 2011 7 Bad practices in cluster development 1. Inappropriate government incentives 2. Limited inclusiveness 3. Failure to find, map common ground 4. Facilitators lose neutrality Source: TCI Delhi Workshop 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 Source: TCI Delhi Workshop 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 Source: TCI Delhi Workshop 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