Excellence in Cluster Policy Making for Fragmented and Globalised

Value Chains Reza ZADEH European Foundation for Cluster Excellence Spain

[2.2] New role of Clusters in Broader Economic Context

Cluster Policy Excellence for Globalised Value Chains

!  Global Value Chains

!  New Challenges in Cluster Policy and Practice

!  Competencies for Policy Making

!  Concluding Observations

2

Cluster Policy Excellence for Globalised Value Chains

!  Global Value Chains

!  New Challenges in Cluster Policy and Practice

!  Competencies for Policy Making

!  Concluding Observations

3

Cluster Support in the Past

Company A Company B

Company C

Company D

Source:EDuch,WorldBank4

Companiesreactedtoincreasedglobalcompe22onwithcollabora2veini2a2ves:

– sharingpartsofvaluechains(research,logis2cs,…)– developingcommonservices(training,…)

Cluster Support in the Past

Jointservice

Company A Company B

Company C

Company D

Source:EDuch,WorldBank5

Company A Company B

Company C

Company D

Cluster Policy Excellence for Globalised Value Chains

!  Global Value Chains

!  New Challenges in Cluster Policy and Practice

!  Competencies for Policy Making

!  Concluding Observations

6

Butnowglobalisa2onisop2masingthevaluechainsatgloballevel,leavinglessroomforcollabora2veini2a2vesatregionalandna2onallevels

Cluster support now

Source:EDuch,WorldBank7

XXAndwearestar2ngtoseethedisappearanceofallkindsofac2vi2es(incl.R+D)ofthevaluechainindevelopedworldthatarebeingmovedtolowercostcountries

Cluster Support Now

Source:EDuch,WorldBank8

Redefiningbusinessstrategies

Leadingtechnology

Advancedservices

Developedeconomieshavetorespondstrategicallyredefiningbusinessesmodels:

– Incorpora2ngleadingtechnology– Addingadvancedservices

Cluster Support Now

9

Challenges for the future

Are the incumbent clusters the best to:

!  Transform their products into advanced services?

!  Incorporate new breakthrough technologies? To break the paradigm?

10

Collaboration – the only game in town?

11

“To the man with only a hammer, every problem looks like a nail.” – Charlie Munger

Collaboration – the only game in town?

!  Most cluster polices focus solely on collaboration !  Can enhance competitiveness of a cluster !  Counter- productive when entrenched in unattractive

business areas !  Policy must help identify and build synergies where

appropriate !  Encourage business strategy transformation and help

firms redefine their business models

12

“To the man with only a hammer, every problem looks like a nail.” – Charlie Munger

Cluster Policy Excellence for Globalised Value Chains

!  Global Value Chains

!  New Challenges in Cluster Policy and Practice

!  European Foundation for Clusters Excellence

!  Competencies for Policy Making

!  Concluding Observations

13

Competencies for Policy Making Training needs - Self diagnosis •  Marketing & branding of

clusters •  Internationalisation •  Emerging Industries and

KETs •  IPR and its management •  Collaborative research •  Knowledge of financial

instruments & access to finance

•  Innovation management & commercialisation of R&D

14

15

16

It’s a Wall!

It’s a Fan!

It’s a Spear!

It’s a Tree!

It’s a Rope!

It’s a Snake!

Training needs - Assessment •  Clarity in the language used •  Using strategic analysis

tools •  Local and global Value

chain analysis •  Industry and value chain of

companies in cluster •  Cluster organisations’

governance & management •  Change management

Training needs - Self diagnosis •  Marketing & branding of

clusters •  Internationalisation •  Emerging Industries and

KETs •  IPR and its management •  Collaborative research •  Knowledge of financial

instruments & access to finance

•  Innovation management & commercialisation of R&D

17

Competencies for Policy Making

!  Over 90 public officials from across Europe and MENA !  Many, many more on introductory courses and Summer Schools

Our Alumni

18

Cluster Policy Excellence for Globalised Value Chains

!  Global Value Chains

!  New Challenges in Cluster Policy and Practice

!  European Foundation for Clusters Excellence

!  Competencies for Policy Making

!  Concluding Observations

19

Concluding Observations

20

Source:Porter2005

Cluster-BasedPolicy

•  Leverage existing assets, history and geographic location

•  All clusters are good •  Enable competition to be more

sophisticated •  Neutral on ownership •  Requires sustained participation by all

actors •  Encourage initiatives at all geographic

levels •  Has increasing impact over time;

some quick returns are possible

Enhance and upgrade Competition

21

Source:Porter2005

IndustrialPolicy

•  Target areas of perceived market demand or attractive technology

•  Intervene in competition (subsidies, protection, etc.)

•  Favor domestic companies •  Requires sustained financial

commitment by public sector •  Centralized decisions at the national

level •  Has high failure rate; short term

impact but low sustainability

Distorts and impedes competition

Cluster-BasedPolicy

•  Leverage existing assets, history and geographic location

•  All clusters are good •  Enable competition to be more

sophisticated •  Neutral on ownership •  Requires sustained participation by all

actors •  Encourage initiatives at all geographic

levels •  Has increasing impact over time;

some quick returns are possible

Enhance and upgrade Competition

Concluding Observations

22

Thank you More information available at :

www.clusterexcellence.org "  Contact: reza.zadeh@clusterexcellence.org

22

More information on Competitiveness Summer School 2016 : http://www.iese.edu/competitivenessschool