especially with the public sector. A cluster initiative offers a comprehensive assessment of a cluster’s markets, products, linkages, externalities, and synergies to help identify regulatory and business constraints; tap new and wider market opportunities; and develop sound business strategies to tackle its main competitors. Strategic initiatives vary by country and cluster but focus on improving market information, workforce development, supply chain improvements, quality standards, branding, forward integration, and process improvements.132 A strong cluster can influence government policy and interventions to ensure appropriate support for and growth of the cluster. Cluster initiatives bring companies together to jointly upgrade their sophistication. Especially where firms are small and lack the financial resources to make individual investment necessary for growth, they can promote joint investments. For example, coffee growers in Colombia have used such an approach to create a branded product for higher margins and improved production processes. Many tourism clusters, wine clusters, and flower clusters around the world have followed a similar approach. Cluster initiatives can help bridge what the Cluster Green Book ( 2013) calls the seven innovation gaps between firms and research organizations; firms and education organizations; firms and capital markets; firms and government; firm-to-firm in the cluster; firms in one cluster with firms in other clusters; and firms to global markets and value chains.133 Cluster effectiveness should be assessed by the degree to which it closes these gaps and by its direct impact on value added growth; profitability growth; wage increase per employee; sales increase; new or better products and services; employment increase; workplace equality; work place diversity; and sustainability. A Cluster Observatory survey of firms to identify perception of the most important role of a cluster initiative found that creating a cluster identity and building a brand and sense of community for the cluster ranked first; building a strategy and vision for the cluster (e.g. identifying a desirable market position or developing a technology road map) ranked second; R&D and innovation promotion ranked a close third; lobbying government for improved business environment (e.g. infrastructure or legislation) ranked fourth; and joint purchasing arrangements (6% of respondents.) ranked fifth.134 The Green book (2013) also provides the following guidelines for funding a cluster initiative. It must be shared between the cluster participants and the state and “on average, about 34% of CI revenues comes from primarily private sources, such as membership fees and sales of services. About 54% come from public sources, mainly regional and local public funding.”135. As a rule, state funding should be provided for specific activities such as the provision of a cluster initiative tool box for diagnostic and impact assessment tools; for office space; a cluster initiative manager and staff; and for the training of cluster facilitators. These investments are moderate in size but are critical to reach a high level of effectiveness in cluster efforts. Leadership is very important in starting and sustaining a cluster initiative and is most effective when this comes from the private sector. It is important to recruit highly committed leadership to champion and manage the process through a cluster initiative. It is also vital to ensure that the resources needed to see the process to fruition are identified and allocated. This requires a leader who can build trust and rally all interests. A tangible outcome is usually the best galvanizing tool for collaboration. A key government champion is also useful. Table 6.2 below summarises the most important activities in which a cluster initiative would be engaged.
TABLE 5.2 – Cluster Initiative Activities Cluster Mapping: To understand the existing state of the cluster (size, patterns of specialisation, depth, profile, role in the economy, local value chain) Global Industry analysis of value chains: To understand trends, growth niches, lead-firm practices and markets. Geographic scope: Define the appropriate scope for the cluster. Cluster Action Agenda: Develop concrete action plans focusing on reform and redesign of services, adding value, productivity and innovation. Establish market viability of each initiative and identify necessary support from stakeholders for taking action. Potential implementing institutions must be engaged from the earliest stages of the process. Lobbying: educating and lobbying public institutions on cluster specific policies and incentives Resources: Develop a strategy to ensure adequate resources throughout the process. Management of the Action Agenda: Create accountability mechanisms, progress milestones and evaluation tool. Source: Author
132 133 134 135
Jörg Meyer-Stamer and Ulrich Harmes-Liedtke, How to Promote Clusters, Mesopartner Working Paper, (2005):3. Göran Lindqvist, Ketels Christian and Örjan Sölvell, The Cluster Initiative Greenbook 2.0. (Stockholm: Ivory Tower Publishers, 2013): 37. Ibid. Ibid., iv.
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ENHANCING PRODUCTIVITY AND GROWTH IN THE CARIBBEAN