1rst REGIONAL TRAINING LACTIMED BIZERTA, TUNISIA, 2nd-3rd APRIL 2014

THE CLUSTER CONCEPT

A necessary clarification

Mr. Abdelhamid BENCHARIF

CIHEAM-MAI Montpellier France

I- Historical foundations and their evolution: What is a cluster?

V- The advantages and the expected benefits. Increasing value, strengthening growth

II- The main forms of cooperation: Evolution of the tasks of a cluster

III – The cluster, a tool for sectorial policies and regional

development: The new role of the Government

IV- Basic principles, prerequisites and success factors

I- The Cluster concept

A clarification is necessary

« What is well known in general, exactly because it is well known,

is not known » (Hegel).

The « cluster » concept is not well known

Many of the key economic actors interviewed during the

cluster research:

• do not have a clear understanding of the concept of cluster,

nor of its advantages, its issues or about the international

experiences

• fear about losing their autonomy and independence

• wonder about the real added value for their business

Another institution…

A technological Center?

Already exists!

It only works in

developed countries

What is said…

A large confusion

I already have my sector

of activity and I am

looking for funds

Which benefits for

my business?

Just another idea

developed by researchers

working with my

competitors??

I will lose my

autonomy and

independence!

In fact, “clusters" were

created to preserve the

autonomy and

independence of all its

partners!

Mistrust or distrust, the main obstacle to the clusters

building

The real meaning of «cluster» is not well known,

Use of the private sector’s

methodology will strengthen

its capacity and ensure its

AUTONOMY

Cooperative

Public

Institution

A necessary explanation

co-ownership

industrial zone

Professional

Organization

RD&Innovation

Centre

Research

Laboratory

Pilot Farm

Back to basics: spontaneous clusters

Originally, clusters were built by the initiative of some

entrepreneurs who felt the need to work together to

overcome common problems and improve

performances

Simple and

operational ideas

The main founding ideas

Cross-fertilization Training, innovation R&D, entreprise

Synergies actions, sectors: 2 + 2 = 5

The territory: framework for activities Local actors membership (bottom up)

Neighbourhood Effects: networking, coordination of memberships, meshing

Collective Initiative Doing together what cannot be done alone

Building together

Sharing challenges

Breaking walls

Building strategies

Doing actions

Synergies The whole is more than the sum of the parts

2 + 2 = 5

Actions Actors

Sectors Resources

Industrial Districts - A. Marshall, 1900: United-Kindom

- G. Becattini, 1970: Italy

Transaction costs - Coase (1937)

- Williamson (1975)

Innovative environment Aydalot, 1980’s

Networks Veltz, 1990s

Local Economy

Pecquer, Zimmerman 2004

Several methodological approaches

Several forms of networking organizations a common denominator

• Building networks by connecting local actors: enterprises, training and research institutions and public institutions, in order to increase the market competitiviness

• A generic definition

…An initiative that provides a partnership between training organizations, R&D institutions and producers, with the support of public authorities, mostly local ones, in order to increase the regional and the business competitiviness

• «Cluster» is generally accepted as a generic concept

A union of actors who trust each other, who share

common interests and who choose to work together

in a specific area for a long time, on a voluntary

basis, relying on partnerships with public institutions

and institutions of local knowledge while maintaining

their individual autonomy

to become more efficient and proficient

« Pole » ≈ Cluster ≈ Network

Several complementary definitions: A synthesis

Beyond the semantic confusions… the clusters are pragmatic tools

The concept was created by entrepreneurs who needed to work

together to improve business performances

Public policies to promote clusters in different fields : industry;

agriculture, spatial planning, education, research and innovation

Requirements for

competitiveness face to the

globalization process

Requirements for

upgrading

Spontaneous

concentrations

Industrial Districts

by the end of 19th

century

Searching for several

approaches

Marshall, Becattini,

Porter, etc.

Public policy tool for

promoting economic

development

The main interest of

« clusters » is in their

operational and beneficial

nature

Agricultural, industrial and

spatial planning policies.

Sciences and Tech.

Regional development

Promotion and development opportunity

for private sector. Strengthening its

capacity to be organized by itself as well

as in partnership with public institutions

Evolution of the Management System

Source: INNOVATEC

I- The Cluster concept

A necessary clarification

1. Historical foundations and their evolution

What is a cluster?

2. The main forms of cooperation

The evolution of the cluster’s tasks

3. The cluster, a tool for sectoral policies and regional

development

The new role of the Government

4. Basic principles, prerequisites and success factors

5. The advantages and the expected benefits

Increase value, strengthen growth

1- enterprises

2- Public Institutions

3- Knowlegde Institutions

Golden Triangle or the «Triple Helix»

2- The main cooperation forms:

the evolution of the cluster’s tasks

Clusters : development tools based on the relationship and the

cooperation between:

Public

Institutions

The «Triple Helix»

Knowlegde

Institutions

enterprises

Relever ensemble de défi de la compétitivité

Universities and

Knowledge Institutions

Public Institutions

enterprises

To deal with competitiviness

enterprises

Public Institutions Knowledge Institutions

the Magic Triangle or the Golden Triangle

enterprises

enterprises

Knowledge Institutions Public Institutions

« action of production enriched by interaction between activity and reflexion ».

enterprises

Institutional

Support

PPP

Cross-Fertilization

BDS

1

3 2

- According to « Ways to do» : finding collective solutions to common needs (training, research and development, business intelligence, etc).

- According to « Products / Markets » :

working on complementarities to develop new products and services and / or to enlarge the market.

- According to « Task Team» :

mainly, exchanging experiences and knowledge

Cooperation between enterprises

Three essential but not exclusive areas

1

But a large range of actions according to the level of involvement

Example: marketing and production

High level of

involvement

Low level of

involvement

Commercialization Production / Conception

1. Pooling to improve the commercial

activity

Example: a representative at trade

events

2. Diversifing markets. Building a new

competitive positioning.

Common brand

3. Pooling some ways of

production: MP purchases,

equipment, software; trainings,

etc.

4. Pooling some human and

material resources to innovate

2 Cooperation between enterprises and knowledge

institutions

Essential in Southern countries:

«developing economies» at the learning and upgrading level

Industrial plant, low-tech level but changing to + AV with more training and

innovation

A deep gap between University and Economic Environment

Technological dependence: negative effects

Increasing the gap between North-South

Clusters in Southern countries

It would be harmful to our country that our governors, public servants, high representatives and CEOs continue

to believe in their institutions without taking into consideration that the changes that the networks are

bringing are deeply changing the base of our old pyramids, without the need to recharge their

legitimacy in this new water of youth.

René Trégouet; Rapport d ’information au Sénat; n° 331; 1997-98

From the pyramid of power

to network knowledge

dealing with business and territorial competitiveness

Public policies to promote clusters: industrial, agricultural, spatial planning, etc. Example: EU Lisbon Strategy: Smart

Specialisation Strategies (S3)

Regional and international organizations:

EU: Lisbon Strategy / competitiviness Poles

BM, UNESCO, OCDE, ONUDI; AFD, GIZ, BAD, etc.

3- Cluster as a tool for sectorial policies and regional

development: The new role of the State

Clusters: as public policy tools for industrial development,

regional development and for supporting private sector.

Module 2

Barriers most frequently cited by companies with more

than 5 employees (% of CEOs)

Source: BM. Survey about the strengths and barriers of the private sector in Morocco.

3 Institutional support and public-private partnership

in Southern countries

The cluster as an instrument for transition

State PPP Private

«Clusters provide the framework to develop an innovative way for

public-private partnership and to promote the attractiveness of

regions and thus to promote employement»

Changing the State’s role « State still »

«we are not going to reduce the importance and the role of

institutions, but we must sublimate them. The real success of

change will arrive through them and through a new and

advanced form of governance, not against them»

« Revolving territory »

- Competition between territories

- Changing the role in the triangle « State, enterprise and territory » States must develop a new role to improve the

attractiveness of the territories

- The benefits of the territory are often linked, not to the

existence of natural resources, but to the control of

knowledge and technologies and to the existence of an

important human capital.

In international competition, the most successful regions are

those that work on their own specificities, by improving their

learning process and encouraging relations and cooperations in

order to create a better environment for business development

Building the competitive advantage of a territory

« In a globalized world, the difficulties are higher for those regions that are out of the knowledge networks»

A «Cluster» is a place for specific know-how in order to

provide a competitive advantage

Changing relationships between «State, Enterprise and Territory»: gradual shift of responsabilities

Current vision

Territorial development is

based on a collaborative

process including

government, local

authorities, companies and

research centres in the

framework of a common

management (Cluster)

Coordination by the State

Traditional vision

The State leads the local

economic development

through multi-year plans

and subsidies

Collaborative Process

Changing relationships between «State, Enterprise and Territory»:

Transferring and sharing the point of views and culture, even if goals and expectations are differents.

The project’s sucess depends mostly on the ability of field workers to manage and to own the project.

- The networks of actors involved in the organization of production

are essential for the coordination of the stakeholders and to

improve competitiveness, in order to have a place in the global

division of work.

- The new ICT multiply the benefits of geographical proximity,

promoting digital proximity

The new State role

- Hierarchical coordination

Participatory process:

Collaborative projets

network

- Sectorial approach, fragmented Integrated,

cross-sectorial

The Sate encourage the emergence of local initiatives and enhancement of the territories’ resources.

Changing the actors role and their relationships

Three main tasks of the State

1- Attractiviness of territories and redistribution

2- Facilitating – coordination

- vertical: from international donors to local actors

- horizontal: between projets and local actors (GL)

3- Support and assistance

A new governance for projects and territories

The new forms of governance cannot be decreed, they

have to be build

helping stakeholders on:

- Getting new devices and coordination tools

- Working on the basis of good practices

In international competition, the most successful regions are

those who work on their specificities:

- By developing a benchmarking process (Radar) and a

learning process,

- by encouraging relationship and cooperation

Module 2

4- Basic principles of a cluster

- By working together, the stakeholders involved must get

results that could not be achieved if they worked separately.

- Common interests must be identified in order to better develop

collaborations between members.

- Voluntary commitment of the partners. The cluster must be the

result of the own approach of the actors, aware of the

opportunities offered by their collaboration.

- Collaboration and independence of the partners. Cluster does

not finish with competition, but it is based on the fact that the

real competition is outside the territory.

Basic principles of a cluster

- Sustainability. Business organization as a cluster must be

structural. To ensure successful exchanges, trust and co-

working habits have to be previously established.

- Competitiviness. Cluster must contribute to the performance

and competitiveness of its companies

- Tool to create regional add value and regional economic

development, through the partners’ activities. The cluster can

also be a factor in attracting foreign investment

The main keys to success… and failure

Public-private partnership

State actions must be focused towards those territories on which these success factors are present. The proactive approach must

be based on the participatory approach of « bottom up ».

1. Initiative and strong local support, and key actors’ membership.

2. Existence of a shared long-term vision.

3. Ability to mobilize partners and for team management : a leader and a facilitator

4. A mixed governance, public-private partnership.

3. Building innovative tools for coordination and facilitation, in

order to boost local development. Based on the needs,

rethinking cooperation and developing the networking

1. A feasibility and positioning study

2. Progressive construction: learning, coaching, demonstration

- Strategic analysis methods: foresight and participatory and

operational initiative.

- Checking the relevance of the project: comparison of several approaches

Methodological approach

especially when the cluster is not spontaneous

Module 3

5- Advantages and benefits?

Specifically, the objectives and tasks of a cluster will be

identified on the basis of a wide consultation of the

companies members of the cluster.

Mutual support is only possible if the actors have the same or

similar problems

General answer

- «it is ‘your’ cluster; it must answer your questions and solve

your problems in order to improve your performances and

profits»

Advantages and benefits?

- Experience shows that 80% of the problems can be solved by

linking key actors and qualified support institutions.

Awareness of enterprises and of all those involved is a prerequisite

for the technopole implementation initiatives.

General answer

What is important is to bring together companies and key actors

Main advantages obtained by enterprises

- A better access to support services, training, information,

advices, expertise, etc.

- A better understanding of their markets and of the access to

new markets;

- - Pooling some of the costs

- The possibility to get funds in order to accelerate development

and to ensure the access to markets for innovative products,

etc.

Some other advantages appears in «collaboration forms»

Competitive advantages accepted by clusters

Collaboration

between enterprises

Lower costs

Increase quality /

price

Increase market

volume

Pooling, experience

exchanges

Diversification

Growth. Market

share

Collaboration

Knowledge Centres

Cross-Fertilization

Strengthening

capacities

Collaboration

Public Institutions

Dialogue / PPP

Support private

sector

Local coherent

framework

Competitive advantages accepted by clusters

Collaboration

between enterprises

Lower costs

Increase quality /

price

Increase market

volume

Increase benefits Strenghthen growth

Pooling, experience

exchanges

Diversification

Growth. Market

share

Collaboration

Knowledge Centres

Cross-Fertilization

Strengthening

capacities

Collaboration

Public Institutions

Dialogue/PPP

Support private

sector

Local coherent

framework