Presentation to a group of 25 cluster practitioners in Australia by Örjan Sölvell, member of TCI Board of Advisors and author of the The Cluster Initiative Greenbook and the recently published Building the Cluster Commons. TCI Board member Richard Walker summarizes the main inputs of his visit to Australia, a great opportunity to hear from a leading expert, ask questions and network with others in the field.


It was an opportunity for 25 of us working within the cluster framework in Australia to hear from a leading expert, ask questions and network with others in the field.


Professor Sölvell presented fascinating case studies from the auto industry in then-East and -West Germany, to highlight how the cluster model – through collaboration, knowledge sharing and bridge-building – was crucial to innovation and growth.


On the picture, from left to right: John Dean, Örjan Sölvell, Narelle Kennedy, Roy Green & Jacqueline Brinkman


Örjan Sölvell positioned the concepts of collaboration and clustering in terms of our evolving understanding of competitiveness. He illustrated this by reference to Harvard Professor Michael Porter’s well-known research and writings on strategy and competitiveness, particularly the differences in Porter’s work in the 1980s and in the 1990s. Professor Sölvell characterised the shift in Porter’s work from firm strategy in the 1980s designed to maximise the firm’s immediate profit, to maximising competitiveness for the future in his 1990s work where firms, related and supporting industries and demand and factor conditions combine together to define the enduring competitive advantage of both firms and nations.


According to Professor Sölvell, In the 1980s US firms are making money, but the USA as a nation is losing out to Japan on competitiveness and productivity. To understand why, the focus must shift from action just on the macro-economic conditions of free and mobile capital and labour markets, to examining how firms operate, their resources and capabilities, product quality, organisation and management models. Importantly, this means understanding the firm and the interactions it has with others outside the firm.


Professor Sölvell noted that competitiveness is not a solitary pursuit, especially with increasing globalisation and technological transformations. He concluded that clustering requires building bridges and actions to create the traffic flows across those bridges.


Örjan Sölvell at the Festival of Ideas in Adelaide
Örjan’s visit spanned a week, packed with activities. The first part of the visit was for events linked to the 2013 Adelaide Festival of Ideas (AFoI).


His keynote address was largely focused around the six main conclusions of the Cluster Development Greenbook 2.0 survey findings. The message would be familiar to the Australian cluster network, since you circulated the presentation that Örjan gave at Kolding.


The one point that he stressed at several of his presentations was that as markets became more global, the importance of the local, if anything, becomes more important. The example that he used to illustrate this point was South Australia’s Barossa region in the world of wine. Speaking of the Barossa, Orjan spent the weekend there and spoke at a workshop hosted by the Barossa Regional Development Australia office. The audience was made up of people from the wine, food, tourism and the healthcare sectors. He commented that he and Michael Porter had written a case study on the Australian wine industry but had never visited. So he was delighted to finally come and meet many people from the community, including Margaret Lehmann (the late Peter Lehmann’s wife).


We took the opportunity to arrange meetings for Örjan to deliver the cluster message to our state politicians. He met with Tom Kenyon, the Minister with responsibility for industry and innovation. At that meeting, he made the following points:

1) The cluster agenda needs to be bi-partisan, as it is in the Nordic countries and much of Europe

2) Politicians can help by speaking publicly about the benefits of clusters

3) Government can play an important role by providing assistance and help the engagement with business and the research community