1. Building a Successful Cluster System in Regional Australia
Mark Bell
30 May 2014

2. Building a Successful Cluster System
in Regional Australia
Mark Bell
Business Development Manager
Regional Development Australia
Riverland
0439 825 400
mbell@rdariverland.org.au
30/05/2014

3. Why am I here?
As recipient of the
Australian Institute of Management
Churchill Fellowship for 2013
To study business cluster development and
facilitation from European leaders in
Denmark, Sweden, Norway, Netherlands, Spain
and Italy.

4. Overseas Experience
• After the TCI 4 Day Conference I interviewed
27 people from Cluster Managers/Facilitators,
to Government Policy Makers & Government
Employees rolling out these policies and
projects through to University Academics that
studied the issues and value of clusters or
helped with the research and innovation
components of clusters.

5. Why collaborate through Clusters?
• Only consider partnering or collaborating in
those areas in which you CANNOT be the most
effective on your own.
• Collaboration is a process through which people
who see different aspects of a problem, can
constructively explore their differences and
search for solutions that go beyond their own
limited vision of what is possible.
• Collaboration breeds success – interaction
fosters development and opportunity.

6. Building blocks for a successful cluster
system in Regional Australia
Collaboration of the current factions to be linked at State,
National & Asia Pacific levels to promote, drive, advise,
think and link potential, new and existing clusters are;
1. Government - Leaders, Department Managers and
Policy Makers.
2. Universities, Knowledge and Innovation Institutions.
3. Regional Organizations - Regional Development,
Local Government, Business and Industry Groups or
Associations.
4. Business - Cluster Managers, Industry Leaders and
CEO’s of cluster participation companies.

7. Building blocks for a successful cluster
system in Regional Australia
• Creation of an hourglass approach –
• Top down Government driven smart and
integrated competitiveness and innovation
policy along with reform that enables at least
80% of research to be applied rather than
pure
• Supported by
• Bottom up Regional Business competitiveness
and innovation initiatives and projects.

8. Building blocks for a successful cluster
system in Regional Australia
• Creation of a cluster structure –
• Cluster identification (industry or market
focused)
• Cluster initiative (cluster activation
independently driven with either formal or
informal structure)
• Formation of “themed” networks based on
evolving cluster initiative strategy
• Identification of innovation initiatives, activities
and projects where members of multiple
networks may be involved.

9. Building blocks for a successful cluster system
in Regional Australia
• Creation of a Regional Cluster Commons Vehicle
(with up to 150km radius) conducting the
following roles;
1. Provision of cluster initiative and initial
facilitation (1 year +) for 3 to 5 clusters
staggered over 5 years in the region (1 FTE)
2. Provision of HR services (.5FTE) to the clusters
as they are set up and evolve
3. Provision of PR services (.5FTE) to the clusters
as they set up and evolve

10. Building blocks for a successful cluster system
in Regional Australia
• Activities to be undertaken/facilitated by the
cluster commons organisation;
1. Cluster potential mapping exercise to identify
and analyse the potential for clusters by type
2. Analyse and prioritise potential clusters – focus
on high turnover potential clusters first – more
likely to be self sustainable long term
3. Establish a list of potential innovation
technologies for review by potential clusters
focused on smart specialisation

11. Building blocks for a successful cluster system
in Regional Australia
• Activities to be undertaken/facilitated by the cluster
commons organisation;
4. Collect all the organizations in the value chain and
the consumer in the early stages of cluster initiative.
Things will go much faster and plenty of issues will be
available to work on by focusing on value rather than
supply issues.
5. Establish a network around each area/issue worth
collaborating on, ensuring cross-disciplinary
participation and thought leadership
6. Making connections between organisations to find
the right partners for project development

12. Riverland Network Examples
• HR Network – surveyed 16 businesses recently
regarding “hidden jobs” – 33 FTE roles discovered not
currently advertised worth $1.68m in wages @ an
average of $50.8k per role plus the multiplier on sales.
• This local job market like most markets is not taking
care of itself!
• The HR Network is evaluating concepts focused around
Future Leaders, CEO forum, and Thought
Leader/Disruptive Thinking/Innovative Thinking
• Energy Network – formed own association to apply for
funding – 13 organisations $20m expenditure – goal 3-
5% reduction in costs + lobbying vehicle

13. Benefits of Clusters and Collaboration
1. Understanding an industry or market.
2. Vehicle to implement productivity programs efficiently.
3. Vehicle to implement skills and training.
4. Debottlenecking tool.
5. Vehicle for collaboration with support institutions.
6. Transformation support vehicle via strategy change.
7. Networking and making connections.
8. Business development.
9. Innovation support vehicle.
10. Marketing and promotion including regional.
11. Provides proof of potential of a region for investors.
12. Tool for implementation of smart specialization in regions.

14. Why use clusters for regional
development?
• Clusters focus on building their own ecosystem
for the region
• Clusters focus on the development of the human
potential of the region
• Clusters are used to sell regions to prospective
investors and help remove barriers through their
lobbying
• Clusters focus on developing different business
models, thought leadership, smart
specialisation, innovation and collaboration

15. Why a cluster commons model?
• Functional clusters, that are supported by an organizing
paradigm (or “commons”), for linking, leveraging, and
aligning all existing, as well as potentially new
programs across a region have proven to be successful
overseas.
• Within the Australian framework, a “cluster commons”
organisation managed by an independent regional
development agency rather than an explicit individual
cluster organisation, is more likely to be successful
through its ability to coordinate cross cluster activities
and create other synergies within a region.

16. Why a cluster commons model?
• The role of a “commons builder organisation” (or
perhaps a Future Innovation/Sustainability
Authority) would be the “glue” that holds
together all the initiatives and activities
proposed to improve business and employment
levels in a region.
• The cluster commons organisation can make the
appropriate connections to build clusters, hubs
and the associated networks and collaboration
activities.

17. Thank you for listening