Business clusters Opening Up

Clusters & how to make it work: Toolkit for cluster strategy

Anu ManickamHalmstad, 12 June 2013

Presentation

• Clusters – why? • Cluster Gearbox• Toolkits from the Gearbox:

• Wicked problems – complex (eco) systems• Drivers of change• Relevance of history, geography, culture• Emerging developments

• EU cluster policy & the challenges ahead

Clusters…

• are innovation hubs (Silicon Valley), they• attract talent, businesses and finance• focus on collaborations, interactions and offer of integrated products and

services (across sectors)• create ‘mass’ and economies of scales when needed• offer cross-boundary, cross-disciplinary, cross-level, holistic concept• are smart specializations

• are relevant as they reflect• interconnected and interdependent nature of globalization, business and

social realities• need for complex and combined value chain solutions• need for accelerated knowledge development and diffusion

put people and networks central

Integrated cluster approach Clusters as people-based interactions (micro-level) creating innovative, adaptive cluster developments (emergent systems) responding to changes in context…

Whole systems approach

Cluster Gearbox

12

•Complex problems & drivers of change

Cluster Context

•Past, current and future factors influencing stakeholder interactions and capabilities

Cluster Conditions

•Transforming interactions (where differences are leveraged) & organizing processes (top-down/bottom-up)

Cluster Dynamics

•Emergent patterns of interaction and developments

Cluster Performance

Integratedcluster approach

• Puts enterprise, innovation and policy into context

• Gains deeper insights on cluster dynamics and drivers of change

• Helps policy adopt a frame of reference that • Guides, coerces and influences cluster

developments collectively

Tool kit 1:Identifying wicked problems

“Wicked problems” are…• Complex• Unpredictable• Many versions of the problem• Many solutions• No right or wrong answer• No end point• Solutions create…

new problems

Wicked problems … otherwise defined

“Every problems interacts with other problems and is therefore part of a set of interrelated problems, a system of problems… I choose to call such a system a mess.”

Ackhoff, 1974

Wicked Problem

Karlstad between giants – Stockholm, Gothenburg, Oslo – urban pull depleting talent, money

Government focus on Capital city; funding to academic universities generous

‘Equality’ as principle – don’t discriminate in policy Academic university = fundamental research &

publicationIndustry needs applied research & other skills

School curricula not serving industry needsConfidence of industry of future and slow reaction to

global competition‘Innovation value of paper mills not recognized’Citizens complaining of ‘ugly’ mills and property

degradation

Local government want more efficiency

from clusters

Dominance of Paper & Pulp industry – affecting

expectations, self-sufficiency drives, etc. Lock-in patterns of

interactions

Technology centre to solve need for

industry related skills

Cluster members

demand more for money

EU policy – build on strong,

excellent clusters

Case: Karlstad & Vårmland Region: Paper & Pulp Industry

Wicked problems

• What is the problem?• Are we talking about the same elephant?• Is there a common goal? vision? • Where are we looking for solutions?

Drivers of change - local

- Need to collaborate to vie for complex tenders & projects

- Demands of local government of Karlstad to increase efficiency

- Consumer demands for sustainability – ‘green products’- New opportunities due to technology innovation and

spin-offs from paper mills- Growth opportunities sought in adjacent areas of

business- Shortage of technical personnel in future

Resource protection

(sustainable forest practice)

Technology and knowledge

abundance (bio-medicines)


Drivers of change- global

- Environmental regulation- Competition from Brazil & emerging

markets – need for more efficiency- Sustainability agenda – sustainable fiber

flow concept; bio-economy as an opportunity

- Trend towards demand driven – PP industry needs to be more ‘open’

- EU policy stimulating ‘bigger, multi-sectoral, high-tech, excellent clusters’- Expansion and focus of metropolis in

region

Strategic forum resulted in MOU10 Professors Programme2010-2014

OECD Region Report 2007

Key Actor ProgramVinnova

(2008-2015)

Double loop sustainability of forest and

business


Relevance of history, geography & culture

Paper mills: dominance and traditional caretaker’s role in region for more than 3 centuries: “still in the ‘genes’ of people”; “male dominated industry” – care

taker role strengthened; Dependence on mills suppressing entrepreneurial

drive to new industries? Complacency?Big industry with high investment base – slow to

changeIndustry was ‘closed, inward-looking and self-

sufficient – tendency to not to ‘open-up’ and learn from others

Presence of river and lake linked forests to mills – essential factor in past growth,

Rural communities – history of trust and collaborations – limited to opportunistic collaborations (instead of strategic collaborations) Latent potential for

deeper collaborations

Limits to networking

Equality principle

suppressing excellence?

Success of cluster history a hindrance?


Cluster performance:emerging developments

Strategic relationship established through MOU between university, local/regional government and

clusters- Connected through 10 professorships working jointly

on research strength, industry needs and expertise (establishment of ‘cluster room’)

- Linked to national research fund distribution model- Working towards collective Värmlandmodel 2.0 lead

by Region Värmland- University expanding its scope to include contribution

to regional development as a key strategy- Increased co-operation by cluster firms with

university (83%, was 78% and increased willingness to co-operate (97%, was 94%)

- New PhDs that are rewarded for knowledge valorisation (utilization)

- Service innovation and social innovation focus as new drivers of growth

The Paper Province

acknowledged as excellent

cluster

OECD review follow-up PURE 2010

Recognition of Region Värmland’s progress

Change in funding of cluster

organizations


EU Cluster Policy

• cross-sectoral innovation (ICT and health, energy and health)

• smart specializations• cluster to cluster collaboration

(internationalization)• knowledge transfer and diversity accelerator• linking industry competence needs with education• user-driven innovation• pushing ICT and high-technology to SMEs

EU Cluster Policy

Innovation policy – is broad, often national (not local) capacity building

Cluster policy – is strengthening regional economics

Horizon 2020 & Smart Specialization Strategy clusters are specializations strengthen existing clusters excellent clusters

Challenges in cluster development

• How do you push for deeper level collaborations?

• How do you create higher level ‘trust’ activities and environments?

• How do you break traditional boundaries of institutions, policy, political and government levels, disciplines, sectors, business models, policy directions, etc. ?

• Who will lead the transformation? Where are the seeds of change?

Understanding cluster dynamics & drivers of change

•Complex problems & drivers of change

Cluster Context

•Past, current and future factors influencing stakeholder interactions and capabilities

Cluster Conditions

•Transforming interactions (where differences are leveraged) & organizing processes (top-down/bottom-up)

Cluster Dynamics

•Emergent patterns of interaction and developments

Cluster Performance

Input for strategy development

Based on research on cluster dynamics and drivers of changeAnu Manickam, with contributions from Karel van BerkelHanze University of Applied Sciences, [email protected]