ROLE OF GOVERNMENT IN CLUSTER DEVELOPMENT

Experience In Supporting Cluster Implementation

Regional Forum on Cluster Development in the CaribbeanNovember 9, 2011

Presented by Ms. Delaine MorganVice PresidentJAMPRO

THE CASE OF JAMAICA

THE CASE OF JAMAICA

BACKGROUND –CLUSTER DEVELOPMENT IN JAMAICA

• Jamaica’s experience in the area of cluster development commenced in 2002

• Formation and support of clusters in the Agribusiness, Tourism and Entertainment sectors under the Jamaica Cluster Competitiveness Project (JCCP)

• JCCP - A two year pilot project funded by DFID; USAID, the Government of Jamaica and the Jamaica Exporters’ Assoc. (JEA)

• In 2003 feasibility study commissioned by the European Commission

Key Recommendation: the design of a private sector development programme to enhance the overall competitiveness of Jamaica’s private sector .

Registered exporters Aspiring exporters Export ready enterprises

A € 26.17 M initiative jointly funded by the Government of Jamaica and the EU and which operated from 2004-2009

Wide range of Macro (policy level), Meso and Micro interventions implemented via 12 Programme components impacting over 5000 MSMEs and 10 clusters

2 Public Sector Institutions (JAMPRO & JBDC) contracted by the PMU to implement the Programme via a Cluster led Approach.

Geared at increasing competitiveness of Jamaican

Micro, Small & Medium Sized Enterprises (MSMEs)

as well as strengthening their support Institutions Via the provision of technical assistance & grant

funding Using key business support institutions in the private

& public sector to execute various Programme

activities to maximize firm level impact.

What is the PSDP

PSDP Objectives

Operating Framework

Key Outcomes

PRIVATE SECTOR DEVELOPMENT PROGRAMME (PSDP) OVERVIEW

TWELVE (12) PSDP COMPONENTS3 FOCUS AREAS COMPONENTS/SUPPORT

PROGRAMMESKEY FEATURES

MACRO(Policy Level) Enhancing Ja’s business environment

•Target Growth Competitiveness Committee

•Monitoring of Competitiveness issues to improve business environment; Policy formulation to address issues; Targeted research

MESO(Institutional Level)Achieving higher standards of management in the area of BDS

•PSO Capacity Building Scheme •Cost sharing Grants for organisational strengthening & development

MICRO (Firm Level)Enhancing enterprise competitiveness and access to financing

•Cost Sharing Grants for MSMEs•Enterprise Rating &Upgrading•Market Penetration•Consortia Activities•Back Office Services•Business Information Points•Export Centres

•Cluster & Sector Initiatives•Corporate Finance Broker

•Grant Funding on a cost sharing basis•Rating & Benchmarking of MSMEs•Support to penetrate existing & new Mkts.•Funding of multiple workshops & seminars•Specialised BDS for MSMEs through PSOs•Provision of value added info & services•Provision of tools/services to develop export capabilities of MSMEs;•Facilitating cluster development activities•Financial advice and hand holding of MSMEs to access external sources of financing

PSDP OPERATING FRAMEWORK – Cluster Led Approach

• PSDP contracted JAMPRO & the Jamaica Business Development Corporation (JBDC) to manage various programme components through established clusters;

• Both JAMPRO and JBDC were directly responsible for 5 clusters each to ensure:

– PSDP objectives were met in the area of cluster development

– PSDP funds were fully accessed by individual clusters

– Relevant guidance and support were provided to all stakeholders within the cluster

OVERVIEW: JAMPRO & The JAMAICA BUSINESS DEVELOPMENT CORP. (JBDC)

  JAMPRO JBDC

MandateJAMPRO is Jamaica’s Export and Investment promotion agency formed in 1988 to stimulate, facilitate and promote the development of trade and investment in key sectors of the island’s economy. 

JBDC was established in April 2001 by the Government of Jamaica and is charged with the responsibility of facilitating the development of MSMEs in making a contribution to the country’s economy.

Staff Complement 88 skilled professionals with expertise in export development, investment and export promotion and business facilitation

Over 100 skilled professional business advisors, engineers and industry specialists

Client Base Aspiring & Existing exporters ; local and foreign investors

Micro, Small & Medium size enterprises (potential & existing)

Cluster Experience 

 

Cluster Unit established in 2007, to support industry-based clusters with a cadre of staff trained in the UNIDO cluster modality.

JBDC has significant experience gleaned from successfully implementing cluster/networking programmes using int’l best practices (UNIDO & Cluster Navigators)

TARGET INDUSTRIES:

MUSIC

FISH

NEGRIL (TOURISM)

VISUAL AND PERFORMING

ARTS

TOURISM

WELLNESS

EGG

FASHION

AUTHENTIC GIFTS

& CRAFTS

SMALL RUMINANTS

PSDP TARGETED INDUSTRY CLUSTERS

Agribusiness Creative Industries Tourism Services

ASSIGNED CLUSTERS BY CLUSTER SUPPORT AGENCYPSDP BUDGET ALLOCATION PER CLUSTER = € 172,000

JAMPRO JBDC

MUSICFISH

NEGRIL (TOURISM)VISUAL AND

PERFORMING ARTSTOURISM

WELLNESSEGG

FASHIONAUTHENTIC GIFTS &

CRAFTSSMALL RUMINANTS

CLUSTER SUPPORT AGENCY

Designers/ Stylists

Designers/ Stylists

PatternmakersPatternmakers

MerchandisersMerchandisers

DistributorsDistributors

Raw material suppliers

Raw material suppliers

Technical supportTechnical

support

Associations and agenciesAssociations and agencies

ProducersProducers

Fashion Shows Fashion Shows

FASHION CLUSTER VALUE CHAIN

Fashion

Accessories (Craft producers)

Accessories (Craft producers)

Fashion Retail Houses

Fashion Retail Houses

Build interest and participation

Identify and define clusters

Identify and prioritize challenges and actions

with stakeholders

CLUSTER DEVELOPMENT FRAMEWORK

Build commitment and mechanisms to

implement policies

1.Mobilisation

3.Collaboraive strategy

4.Implementation

2.Diagnosis

PSDP CLUSTER SELECTION & DEVELOPMENT FRAMEWORK

PSDP ASSISTANCE TO CLUSTERS

10 Clusters

TechnicalServices

Funding/Grant

CorporateFinanceBroker

EnterpriseRaring &

Upgrading(rating services)

Export Centres/Business

InformationPointsIPs

MarketPenetration

PSDP SUPPORT PROGRAMMES

Back OfficeServices

Support Services

Target GrowthCompetitiveness

Committee

Other Clusterdevelopment

initiatives

Cost SharingBusiness

DevelopmentServices

JAMPRO CLUSTER SUPPORT STRUCTURE

Relevant JAMPRO Support Depts.

MUSIC

Facilitator

PSO

TOURISM

Facilitator

PSO

VISUAL & PERFORMING ARTS

Facilitator

PSO

NEGRIL(Tourism)

Facilitator

PSO

FISH

Facilitator

PSO

PMUSupport

Int’l experts

Other Int’l donor Progs.

PSDP Support Progs

Local BSPs Administrative Support

Dept. Manager

Vice President, JAMPRO ( Cluster Support Agency)

Cluster Coordinator 1 - Fish; Negril ;V&PA

Cluster Coordinator 2 - Tourism ;Music

Cluster and Linkages Dept.

• Assist clusters in completing their diagnostics

• Provide ongoing guidance and assistance to clusters in developing and executing their operational plans

• Hand holding the cluster through the implementation process

• Facilitate monthly monitoring meetings with cluster facilitators/PSO/cluster leadership to plan activities, review outputs and targets & address issues.

• Execute cluster development training programmes

• Contribute and provide guidance at regular cluster meetings where relevant

• Provide mediation advice and intervene where relevant to assist clusters in addressing issues.

JAMPRO CLUSTER SUPPORT SERVICES

PSDP impacted a wide cross section of MSMEs and associated institutions who were members of individual clusters; Cluster membership supported by the Programme was in excess of 1100.

PSDP IMPACT ON CLUSTERS SUPPORTED

6%

16%

4%

5%

4%

21%, Music

27%,VPA

4%

7%

6%

Membership per Cluster

Authentic Gifts & Craft

Jamaica Fashion & Apparel Cluster

Jamaica Wellness Cluster

Egg Industry Cluster

Small Ruminants Cluster

Music Cluster (JARIA)

The Visual and Performing Arts Cluster

The Jamaican Fish Cluster

Negril and Western Jamaica MSME

The Tourism Cluster

Small Ruminants Negril MSME Wellness Gift & Craft Jamaica Fish Fashion Cluster Music Cluster VPA & Fashion

0

1

2

3

4

5

6

7

8

9

8 8

7

4

1 1 1 1

Cluster Programme - New Products Developed/Enhanced Distribution

Clusters

No

. of

Pro

du

cts

PSDP IMPACT ON CLUSTERS SUPPORTED

Participating PSOs equipped with cluster development methodology tools and applications

Improved Business Practices & Increased profitability of firms assisted

Market Diversification:

o Fashion cluster has successfully broken into European, Canadian and Caribbean Markets

o Main distribution outlet established for Gifts and Craft cluster (Things Jamaican retail chain)

o Small ruminants cluster has impacted the local market by increasing their supply of lamb products from .02% to 5% at end of the PSDP

Business linkages within and across value chains

PSDP IMPACT ON CLUSTERS SUPPORTED

Each cluster is unique, with its own set of challenges defined by several factors including:

membership profile, industry, cluster stage Support system etc.

Organizational support infrastructure critical to continued success of clusters

Cluster development is an on-going evolving equation

Clusters takes on average 5 years to become self-governing and self-financing

Adequate financial resources required for some time before clusters can self-sustain

Clear commitment and involvement of cluster members required from very beginning of the process

WHAT HAVE WE LEARNT IN JAMAICA

Thank You !