Economic Clusters 2003 Dr. Terra

Promoting Information Technology for
Industrial Trade Facilitations - UNIDO

Strengthening Economic Clusters
and Value Chains through the
development of Knowledge Portals

Dr. José Cláudio C. Terra

Damascus, October 20, 2003

Strengthening Economic Clusters and Value Chains
through the development of Knowledge Portals

The purpose of this presentation (paper) is to
establish the conceptual bases for the
development of a knowledge portal applied to a
generic economic cluster and value chain and to
report the initial results of a few Communities
of Practice developed across a number of
different Research Institutes in Brazil.

www.terraforum.com.br page 2

But, first…

…a bit of background


Distance:
Approximately
4.000 Km


STRUCTURE OF THIS PRESENTATION

 Some theoretical foundation
 The context
 The project
 Early results
 Lessons learned
 Next steps & expectations



 The context
 The project
 Early results
 Lessons learned
 Next steps & expectations
 Final Considerations


Conceptual Model: Synergy of Concepts between
Clusters, Knowledge Management and Corporate Portals

Clusters Economics Knowledge Management
- Linkages - Identification, Generation,
Organization and Dissemination of
- Informal learning networks
Information
- Collaboration and Competition
- Tacit and Explicit Knowledge
- Common Resources
- Communities
- International Ambition
- E-learning
- Linkages with Academia and
- Intangible Assets
Government

Corporate Portals
- Single Point of Access
- Ubiquity and ease of use
- Open and closed communities
- Access and Publication
- Collaboration



Information
- Common Resources
- Communities
- E-learning
- Intangible Assets
Government

Corporate Portals
- Collaboration


Some theoretical foundation (1)

Michael Porter, in his famous book
The Competitive Advantage of Nations,
called attention to the atmosphere of
learning, cooperation and high
competition existing in micro-regions.



Anna Lee Saxenian related the
development of Silicon Valley, starting
with the informal flows and networks of
collaboration and knowledge among
enterprises, universities and government

Source: Saxenian, A., Regional Advantage: Culture and Competition in Silicon Valley and
Route 128, Harvard University Press, 1996



The Japanese kairetsus and the just-in-
time methods of production, initially
developed by Toyota, have spread
throughout the world and have as one of
their bases a very high level of cooperation
and exchange of information among
enterprises in the productive chain.



In Europe, there are already reports that speak of a new
corporate structure: the “syndicates of companies”,
that is, associations of small and medium companies,
which do not compete against each other and which are co-
proprietors of “cooperatives” which assume responsibility
for activities in common , such as: marketing,
distribution, entry into foreign markets, licensing of
technology, etc.

Source: The Economist, Will the corporation survive? November 1st, 2001



“Research looking at knowledge networks between SMEs
in Australia showed that even when there was adoption of
networked technologies to allow connectivity between the
companies, the potential for knowledge exchange was
highly dependent on the level of trust. Similar work on
SME collaboration in Asia showed that information
sharing and learning was based on the prior existence of
trust and an atmosphere of continued trust building.”
Source: Braun, P., Digital knowledge networks: Linking communities of practice with innovation. Journal of
Business Strategies, 2002. 19(1): p. 43-54., in: Inter-Organizational Communities of Practice
by C. van Winkelen



“Collaboration is: “a cooperative, inter-organizational
relationship that relies on neither market nor hierarchical
mechanisms of control but is instead negotiated in an
ongoing communicative process”

Source: Lawrence, T., N. Philips, and C. Hardy, Watching whale watching. Exploring the discursive foundations of
collaborative relationships. Journal of Applied Behavioural Science, 1999. 35(4): p. 479-502. in: Inter-Organizational
Communities of Practice by C. van Winkelen



Government Government
Government

Academia Industry
Academia Industry Academia Industry

Triple Helix I Triple Helix II Triple Helix III

ETZKOWITZ, H. e LEYDESDORFF, L. - The dynamics of innovation: from National Systems and "Mode 2" to a Triple Helix
of university-industry-government relations. In: Research Policy, v. 29, n. 2, pp. 109-123, fevereiro 2000., in: Plonski, G.A., Public
Oral Examination as part of its candidacy to Full Professor at Business School at the University of São Paulo, July 16, 2003



“The network is the enterprise”

Manuel Castells



Information
- Common Resources
- Communities
- E-learning
- Intangible Assets
Government

Corporate Portals
- Collaboration


Knowledge Management

In the mid-nineties, Knowledge Management
emerged as a discipline and a formalized
organizational function, initially in private
enterprises and, a little later, in government
offices and state-owned enterprises and in
supranational entities, such as The World Bank
and the United Nations.



Managing Knowledge

Philosophy
Psychology
Information
Management Science
Management
Anthropology
Sociology
Economics



Managing Knowledge
 Strategy
 Human Resources
 Organizational Culture
Management Science  IT
 Finance
 R&D & Innovation
Marketing


Typical Knowledge Management Objectives

 Acceleration of the generation of new knowledge with competitive value:
 Increased collaboration among employees;
 Facilitation of employee access to the sources of training (on-line and
off-line), information and knowledge;
 Supply of personalized information just-in-time (dealing with information
overload);
 Preservation and Protection of the intellectual capital existing in the
company;
 Leveraging of the knowledge existing in the company and in the external
environment to better serve the customers;
 Improvement of the decision-making process at all levels of the company
(management, production and on the front line);
 Reduction of costs and of re-working:
Don’t reinvent the wheel; and
Avoid activities which add little value.


KM Initiatives in Governments from OECD countries

Broad Definition of KM
 Organisational arrangements (decentralisation of authority, opening up
bureaucratic divisions, use of information and communication
technologies etc.);
 Personnel development (mentoring and training practices, mobility etc.)
and management of skills;
 Transfer of competencies (databases of staff competencies, outlines of
good work practices, etc.);
 Managerial changes and incentives for staff to share knowledge (staff
performance assessment and promotion linked to knowledge sharing,
evolution of the role of managers, etc.).

Source: KM Practices in 140 government organizations )Ministires/Departments/Agencies of Central Government), OECD, GOV/PUMA
(2003)1, 27th Session of the Public Management Committee, 3-4 April, 2003



Good knowledge/information management is one of the top five internal priorities of your
organisation

44.8
45

40

35

30 26.1

25 21.7

20

15

10 5.8

5

0
Yes No, but it will certainly No, but it will probably No
become a priority in the become a priority in the
next 2 ye longer run




Efforts made at improving KM
(increasing with higher score on the indicator)
22

Swe Group 1
20
Group 2
Fin
18 Kor Can Ice
Nor Eng
Fra
16 Irl US Den
Hun Slo Ger
Group 3 Gre
14
Pol Bel
12 Por

10
8 10 12 14 16 18 20
,
Perception of level and quality of KM practices organisational and cultural change
(improving with higher score on the indicator)




Efforts made at improving KM
(increasing with higher score on the indicator)
19
Group 1 Finance
18 Group 2
Labour Trade & Industry
17 Prime Minister's Justice
Health /Social Office
16 Group 3 Affairs Economy Foreign
Affairs
Interior
15 Education
State
14 Reform/Public
Administration

13
13 14 15 16 17
Perception of level and quality of KM practices, organisational and cultural change
(improving with higher score on the indicator)




Information
- Common Resources
- Communities
- E-learning
- Intangible Assets
Government

Corporate Portals
- Collaboration


Areas of a Knowledge Portal for Strengthening an
Economic Cluster Productive Chain

 Information Flows;
 Collaboration;
 Training of Personnel;
 Business Generation;
 Promotion of Innovation; and
 Optimization of Resources.


I - Information Flows (1)

OBJECTIVES OF THE PORTAL MOTIVATION
Provide broad access to The portal can serve as an information
source for all organizations:
updated, relevant Various kinds of reports and market
information focused on studies are not normally accessible to most
the productive chain companies;
In certain cases, companies lack the
financial resources to acquire the reports;
in others, the companies do not even know
the reports exist;
It is also possible, via the portal, to reach
a large enough scale to look for and
organize widely-available data.


I - Information Flows (2)

Collect information from It’spossible, via the portal, to establish
quite simple and automatic mechanisms
the companies to for data collection from the companies.
execute and rapidly This not only permits reductions of cost,
update sectoral studies but also of time required to carry out
research and industry diagnoses.
One can also think about creating
innovative indicators of the evolution of
the industry’s intellectual capital.


II - Collaboration (1)

Promote information The portal can use various tools which
permit the virtual exchange of information
exchange and (discussion forums, chats, etc.) and also
collaboration among the decentralized publication of the
contents by the companies participating in
companies in the the cluster.
productive chain Stimulate the development of “Practice
Communities” involving persons from
diverse companies.
These may include information about the
company itself, as well as a description of
projects in progress.
It’s also possible to consider areas such
as “Urgent Questions”.


II - Collaboration (2)

Promote interchange The portal may be designed to provide
quite specific information so that,
between the private especially small businesses, have
sector and knowledge instantaneous access to governmental
reports (e.g., trade missions) and
sources in the public academic information (e.g., lists of experts
sector and academia and national and international laboratories
relevant to the sector).
Persons from academia, research
institutes and government may also utilize
the portal to monitor the companies’
activities, projects and needs.


III – Training of Personnel (1)

Centralize and reduce On-line training modules may be made
available to all the companies.
the cost by on-line
There’s a clear reduction in the individual
training costs of licensing and development of the
courses.
Increases are evident in the speed of
dissemination of new concepts.

Divulge opportunities for The portal may have an area for the
divulgation of recommended opportunities
off-line training for training offered by third parties.


III – Training of Personnel (2)

Create a more efficient The portal may become a reference
centre for work opportunities.
job market The liquidity and the “oxygenation” of the
market are increased.
Elements of confidentiality must be
introduced in order to assure the
adherence of the companies.

Promote greater use of The very opportunity to utilize the portal
may become an important incentive for a
information technology more intense use of IT
and Internet tools Courses in IT are ideal for training via the
Internet.
Special conditions for acquiring
computers could be offered to participating
small businesses.


IV – Business Generation (1)

Promote opportunities Mechanisms so that companies may
promote their commercial interests and
for business between find partners within and outside the cluster
companies is quite interesting.
The promotion of the formation of
temporary and/or permanent consortia
may be facilitated by e-project tools.

Promote local companies The portal may help to divulge the
products and services of the cluster and
globally also for the quick localization of and
contact with the companies.
If translated to the English language, the
portal could serve as an excellent
marketing tool and help develop
international business.


IV – Business Generation (2)

Promote electronic Tools which permit the rapid
configuration of e-business may be made
trading available on the portal.
The tools may be pre-negotiated and
adapted to meet the needs of the
productive chain.
Auction-like electronic markets may also
be established.


V – Promotion of Innovation

Promote success stories The portal may be utilized to describe
success stories among cluster companies.
These kinds of stories are known to incite
innovative behaviour.

Disseminate technical The faster diffusion of technical norms
has a positive impact on the productive
norms quality.


VI – Optimization of Resources

Map and optimize the Just as multinationals do it internally, the
industry portal may enable associated
utilization of the companies to “rent” some of their idle
productive resources of resources.
the productive chain A market may also be created for trading
competencies and intellectual capacity.

Provide common The portal may be utilized to automate
the providing of electronic services (e.g.,
services to all the travel reservations, accounting, etc.).
companies



 The context
 The project
 Early results
 Lessons learned


The Context (1)

 Association of Research Institutes (ABIPTI)
 125 member organizations
 Lobbying
 Benchmarking
 Training
 Publications


Distance:
Location of Approximately
participating 2,500 miles
organizations


The Context (2)

 15 Research Institutes are selected (best
managed & top performers)
 From small (300 researchers) to large
organizations (3000 researchers)
 From very focused (e.g. agriculture, oil, nuclear)
to very diversified research institutes
 From private foundations (few) to government-
owned (States and Federal)



 The context
 The project
 Early results
 Lessons learned


The Project (1)

The Goal: Bring KM
concepts and practice to 15
selected Research Institutes


The Project (2)

A Knowledge Portal was developed with key functionalities
to support the development of Communities of Practice:
 Knowledge Bases;
 Members’ Directory;
 Content and Document Management;
 Advanced Search;
 Events Management;
Alert and Subscription Tools, Forums, Personalization, etc).


The Project (3)

The initial focus on the development of Communities
of Practice across all organizations aimed at rapidly
achieving tangible results and, therefore, also
fostering the development of KM initiatives within
each one of the fifteen research institutes. An
important consideration in the choice of Communities
of Practice was the fact that these institutes had very
different technological capabilities and interests.


The Project (4)

Possible Domains for the Communities of Practice
Generic Domains related to the management skills and techniques of research institutes
 Management of Intellectual Property;
 Quality Management;
 Technology Forecasting and Monitoring;
 Client Relationship Management (CRM);

Scientific Domains that may involve a number of institutes but not all of them
 Environment;
 Design;
 Chemistry;
 Food quality.

National themes domains defined by the Federal Government’s Industrial Policies
 Support to Exports;
 Support to Small and Medium Enterprises.


The Project (5)

Selection of CoPs to get started…
Three CoPs were selected: Management & Commercialization of Intellectual Property
and Quality Management, and “Geological Risks”. These topics were chosen for the
following reasons:

There was enough critical mass both in terms of available digital content, as
well as interested and qualified personnel;
They are well-defined domains and are non-proprietary in nature;
They are topics that can engage and motivate wide participation;
They are strategic topics with a wide gap between the top and bottom
performers;
A core group that had a sense of a Community were identified;
A few experts that could help with valuable initial content were also identified;
These are topics that are directly related to the services provided to the clients
of these research institutes;
These communities can rapidly expand to include personnel from other types of
organizations (industry, government and universities, etc).


…and now…

…understanding a bit of the
phases of the project


The Project (6)

Training Project Seek Foster Roll-out
in KM Plan Support CoPs Portal

 200  Develop a  Get CEOs  Face-to-  Start with
researchers strategy: to meet and face meeting good content
were trained CoPs are discuss KM
 Invite  Launch
throughout chosen
 Show experts event
Brazil
 Develop Benchmarks
 Hire  Train users
horizontal
 Show dedicated
and focused
prototype moderators
CoPs
 Use free
 Choose
web-base tool
Technology
platform



 The context
 The project
 Early results
 Lessons learned


Early Results

 KM goals are fairly well-understood at senior
management levels
 Greater understanding of skills, competencies and
methods used by different Institutes in the domains
supported by CoPs
 Some tips, ideas, and documents have been exchanged
 A core group of researchers that have embraced CoPs
and KM
 Demand for building many other CoPs



 The context
 The project
 Early results
 Lessons learned


Lessons Learned

 Do not underestimate the need for fostering social
contact – (Latin culture???)
 Definition of a domain and then taxonomy is critical
 Find leaders and “cool people”!!
 Technology is not that important…changing mindset
is huge!
 Attention to IT skills of involved personnel
 Use a PULL strategy…not a PUSH strategy
 Attention to the ENERGY!!



 The context
 The project
 Early results
 Lessons learned


Final Considerations (1)

Just as is the case when applying portals to
Knowledge Management in large privately-
owned companies, the main challenge is not
technological. There are several strategic,
operational and organizational elements that
are critical to the success of such initiatives.



The initiative described here is significant in its ambition.
Its success may have a profound impact on how Brazil
integrates the considerable amount of knowledge that is
available in this very large country, but that is currently
very much dispersed. Geographical isolation is no longer a
viable option for any organization or even country.
Individuals and organizations now seek information and
knowledge regardless of their location.



These kinds of initiatives are of particular importance to
developing countries. Such countries do not have the
resources of most multinationals that are developing their
own internal knowledge portals and leveraging knowledge
from all over the world. The route for inter-organizational
collaboration through knowledge portals is not an easy
route, but one that is very promising. Indeed, it is probably
a necessity to compete in the Knowledge Era.


Thank You!
Dr. José Cláudio Terra
jcterra@terraforum.com.br

www.terraforum.com.br


Economic Clusters 2003 Dr. Terra

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