Workshops on international best practices and summary of conclusions

Workgroup A1 - cluster identification

Moderator: Sergio Arzeni
Panellists: Andrea Balestri, Eric Tosatti, Claas van der Linde

The aim of this workgroup was to define some basic concepts around the cluster theory and particularly to try to answer some fundamental questions such as what a cluster is, how to identify it and set its boundaries, how to define the geographical scope of a cluster and finally how a cluster is born and grows.

The workgroup discussion was very lively and aimed at different key concepts around this topic, however, no structured, definitive conclusions were possible.

The definition of a cluster is not only an academic effort. Sometimes, and this is the case of some developing countries, a clear definition of a cluster must be made in order to receive funds from cluster development initiative schemes. Nevertheless, it has been argued that the identification of a cluster "per se" is of little value without a purpose. It is much more important to clarify which kind of initiatives must be taken into the cluster in order to upgrade its competitiveness.

In some cases, like in Italy, the Government has tried to define a regulatory framework to identify "industrial districts" (which may be considered equivalent to clusters). However, this has had little success given that some clusters like Sassuolo (ceramic tiles) or Carrara (marble), known throughout the world, fall outside the official parameters.

One of the clearest descriptions of a cluster arising from the discussion defined it as "a collection of enterprises that share some commonalties and complementarities, with geographical links" (van der Linde).

The origin of clusters is often historical, sometimes dating back some centuries (see Prato wool cluster in Italy for example).

Another useful tool for identifying a cluster is more related to the presence of core capabilities within a certain group of geographically concentrated firms.

The geographical delimitation and the concentration of a cluster is an important element and this geographical concentration has a direct influence on cluster competitiveness. Some key elements in cluster identification are also the presence of significant spill-overs and technical linkages between firms and cluster agents.

Workgroup A2 - strategic analysis

Moderator: Manjula Luthria
Panellists: Emiliano Duch, Paul Frater, Hervey Gibson

The main purposes of this workgroup were to define strategic analysis, describe what is needed for such analysis and the role of the analysis in cluster development initiatives. The workgroup discussion revolved around three basic issues: strategic analysis, how to carry it out and who should do it. Concerning the first issue, it was stated that strategic analysis in cluster development initiatives responds to the need for a roadmap to define the existing scenario. Strategic analysis is related with the definition of vision, priorities and strategy in the long term. Core blocks of strategic analysis are the individual business strategies of single firms and the linkage strategies among agents of the cluster. Diamond analysis is an important tool for diagnosis, but it is not necessarily useful for the definition of a strategy.

Regarding how to carry out a strategic analysis, we should start from collecting information. The information needed to develop a strategic analysis at cluster level includes: information about markets, buyers, company supply chains (customers, suppliers and other key actors) and economic infrastructures.

The main sources of information are interviews with business leaders within the cluster, public data analyses, interviews and surveys with important suppliers and customers. Another key issue discussed in the workgroup concerned the measurement of the success of a cluster initiative. This operation should include: outcome measures in the long term (3-5 years), structural measures in the mid-term (1-2 years) and process measures in the short term (3 months).

Finally, as regards who should carry out the strategic analysis, the workgroup participants agreed on the role of the Public Administration in promoting and financing such an analysis, but they also agreed on the need to involve a third party, normally a cluster specialised consulting firm, in carrying out the strategic analysis, to ensure quality in providing analysis and process tools and to guarantee independence.

Workgroup A3 - competitiveness analysis

Moderator: Michael J. Enright
Panellists: Ted Egan, Elisabeth Waelbroeck-Rocha, Eugeni Terré

The initial questions and the aims of this workgroup were essentially linked to the necessity of measuring the competitiveness of a cluster, to identifying the conditions that can upgrade this competitiveness through innovation, to examining the right balance of rivalry and collaboration among competitors within a cluster and finally, to analysing the potential of tools such as benchmarking in cluster development initiatives.

The analysis of competitiveness in a cluster requires integration at various levels: social, political, macroeconomic and finally at cluster level. The primary aim of an analysis of competitiveness at cluster level is to examine the competitive environment of a cluster. For this reason it is important to have a SWOT (strengths, weakness, opportunities and treats) to know the true current state of a cluster, and this is needed before the strategic analysis is begun. Information available to the public combined with detailed specific information is normally the basis of any competitiveness analysis.

Concerning how to conduct an effective competitiveness analysis, the workgroup drew attention to some important lessons:

• Every cluster is unique. Clusters must be contrasted.
• Excessive attention to numbers can be negative.
• A competitiveness analysis has to be assessed within the context of company strategy. It must take into account the firm's strategy (example: mass production v. diversification).
• Global context: it is important to look at what other clusters are doing in order to learn from them. However, not all analysis can be put in a global context.
• Future matters. Is very important to bear in mind that competitive strategies change, competitiveness evolves and, finally, that markets evolve.
• A competitiveness analysis must consider different components of the cluster both separately and together.

Finally, some practical issues related to competitiveness analysis were presented by the panellists. In some cases (Mr. Egan's presentation), a competitiveness analysis may link statistical information and productive systems to identify some specific clusters (growing clusters or export clusters).

Benchmarking may be used in this framework as a shock therapy for the managers and agents of a cluster (the case presented by Mr. Terré). This tool has a great potential for change: managers do not react to reports, but they do to seeing different business reality.

Workgroup B1 - participation and motivation

Moderator: Eric Hansen
Panellists: Alonso Ramos, Josie Rowe-Setz, Bob Breault

This workgroup was organised as a real work session rather than a standard conference workgroup, and had several basic objectives:

• to learn from successful cases how to start a clustering process (the word "clustering" was preferred to cluster to underline the dynamic component of the initiative)
• to identify the key success factors for start-up
• to share perspectives and make recommendations from the lessons received
• to explore the opportunities for networking, training and improving the "state of the art"

After four brief input presentations of successful cluster initiatives around the world (Chihuahua, Arizona, South Africa and Morocco), the participants were divided into small groups to focus the discussion on some key aspects of the main themes of the workgroup: the meaning of the clustering process; key motivations for clustering within the local community; key challenges in launching the clustering process.

Concerning the challenges and issues, the workgroup focused the discussion on five main themes: the development of trust (i.e. obtaining the commitment of business people), how to move from analysis to action, how to obtain suitable financial support for initiating the clustering process and how to overcome the lack of leadership and how to combat the lack of commitment (i.e. how to get significant stakeholders involved in the initiative).

Starting with this last point, the workgroup argued that stakeholders can be involved through different methods and, in particular, by creating intermediary institutions at local level and by clarifying key concepts about clusters and clustering.

A second issue taken into account regarded leadership and commitment, which must be obtained by clarifying the benefits to all potential partners involved in the cluster initiative and by asking for the commitment of the leaders and champions.

How to pass from analysis to action was the third important theme of discussion. It was said that the best way achieve this is to create a work-team including leading companies, Government and consulting firms specialised in cluster development.

A specific discussion group dealt with resources for cluster initiatives.

Broad consensus was reached on the fact that public money is necessary to start the process of a cluster initiative.

Finally, a crucial topic was the role of trust in a cluster development initiative. Success stories are need in order to turn companies' sights from the local to the global market. Governments can also contribute to building trust and to helping companies better if they are organised in clusters.

Workgroup B2 - leaders in cluster initiatives

Moderator: Frederic Richard
Panellists: Carlos Alvarez, Josep Maria Montagut, Alec Hansen

The second workgroup dealing with tracking the process aimed to analyse the different aspects of leadership in cluster initiatives. As in the other workgroups of this stream, the session was carried out with a pro-active approach that allowed all participants to interact.

A first theme of discussion concerned the figure of the so-called "civic entrepreneur" defining him as the person with long-term vision and commitment to implementation, able to take responsibility for change and act as a catalyst. Civic Entrepreneurs might be CEOs, government officials, educators, union officials, non-profit-leaders.

A second work area examined the major obstacles in finding and sustaining leadership roles. A long list of obstacles emerged from the discussion: the lack of common vision; mistrust and fear of showing weakness before competitors and tax authorities; the lack of process time for participants and the lack of strategic, long-term vision; the excessive atomisation of firms and diversity of fields.

The workgroup discussion also examined some tools to overcome these obstacles, such as launching a vision generation process, demonstrating early benefits for the participants.

An important remark was made concerning the importance of a cultural community pre-requisite: a common view of the environment for the project, consensus on the project style.

Finally, particular emphasis was laid on the importance of showing early results in consolidating leadership. This need, which refers to the public and private sector, may concern legislative lobbying or collective purchasing power, for instance.

Among the tools for creating early results, the workgroup drew attention to case studies (to show how it works somewhere else) and local pilot schemes.

Workgroup B3 - initiatives implementation

Moderator: Ifor Ffowcs-Williams
Panellists: Bob Breault, Carles Gallifa, David Wilson

The last workgroup dealing with the implementation of the initiatives within a cluster project aimed to analyse issues like the right timing for implementing each initiative, financial support or the need for follow-up activities.

First of all, the discussion focused on how to accelerate the clustering process. An important pre-requisite is doubtless the clarity of vision: to create the shared cluster or regional vision, to renew it periodically, to report the vision; strategies through success stories, forums, meetings, etc. play an important role in accelerating the clustering process.

A second issue arising from the discussion concerned the need to build a specialised infrastructure: the use of cluster methodologies, creation of mixed institutions (Government, universities and business), the definition of the needs for developing a strategic plan and alignment between the needs of a cluster and public service providers.

Finally, attention was drawn to the crucial role of leadership in initiative implementation. Nevertheless, it was argued that since the cluster is a living organism it requires a different kind of leadership at different stages in its development. Sometimes multiple leadership requires co-chairs: influential leaders and technical leaders.