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RFCD 2011: Dr. Beverly Morgan: Cluster Development in the Caribbean 1
1. Regional Forum on Cluster
Development in the Caribbean
Theme 4 – Key Supporting Agencies
The Competitiveness Company
Beverley Morgan
Trinidad & Tobago
November 2011
3. Typical Cluster Initiatives
Cluster Expansion
Research & •Publish Reports
Networking •Incubator Services
•Study Cluster
•Cluster Awareness •Branding
Networks:
•Companies •Attracting Firms
•Regulation Lobbying •People •Technical Standards
•Company Growth
•Technical Trends
Policy
Action •Infrastructure Lobbying •Facilitate Innovativeness
•Introduce New Technologies Innovation
•Export Promotion
•Production Processes & Technology
•Business Assistance
•Technology Diffusion
•Market Intelligence
•Technical Training
•Purchase Coordination
•Management Training
•Increase Collaboration
Commercial Education
Cooperation & Training
Source: Cluster Greenbook Based on
3
Survey of 500+ Clusters
4. MOBILISATION
PROCESS
Emails
Telephone Calls
Each person tells
MOBILISATIO others (Snowball)
N Everyone welcome
Everyone valued
Open and Inclusive
Process
Ideas Welcome
5. Framework: Cluster Strategy
Development Template
1. The Cluster Strategy Development Template is a framework that provides a
structured decision making methodology.
2. The objective of the Template is to provide a set of concrete strategic
initiatives that each cluster can pursue to attain the results they seek. In that
sense it serves as a Roadmap for the cluster.
3. The strategic initiatives contained in each Template form the Work Plan for
the cluster throughout the duration of the project. The strategic initiatives
stem from the cluster workshops and are based on the ideas and insights of
the participating firms.
4. The clusters own the document.
Source: ontheFrontier
6. Framework: Cluster Strategy Development Template
Cluster Workshops Cluster Diagnostic
Strategy Development
Template
Review and Research Firm-Level Consultations
The Cluster Strategy Development Template is the top-line repository of efforts . It is a comprehensive
document reflecting the ideas and insight of all stakeholders.
Source: ontheFrontier
7. The 5-Step Cluster Process
– Competitiveness in Action
– Step 1—Analyse Current Situation
– Step 2—Set Industry Objectives
– Step 3—Understand Customer Needs
– Step 4—Articulate Competitive Positioning
– Step 5—Develop Action Guidelines
– Next Steps
8. Migrating Towards a Strategy Based Model
Strategy, Operations and Assets
Asset-Based Approach
Assets Operations Strategic Objectives
Compete on the Create basic products Look for high volume
basis of one’s and wait for and low price
natural conditions customers to come Exploit Comparative
Advantage
Strategy Based Approach
Strategic Objectives Assets Operations
Focus on satisfying the Acquire assets that Set clear targets and
needs of demanding deliver complex adopt sophisticated
but well selected and products that meet configuration to meet
high paying customers the needs of target them
Build Competitive customers – Strong-inter
Advantage – Knowledge and company and public-
research private sector
– Technology and cooperation
know how Improve productivity
9. Strategy IS choice
Cascading Choices
What are our
goals and
aspirations?
Where will
we play?
How will
we win in
chosen
markets?
What
capabilities
must be in
place to win?
What
management
systems are
required?
Source: Roger Martin
10. Cluster Participants Learn and
Practise Structured Approaches
RESEARCH GUIDE
Situation Analysis
Market Size & Demand
Distribution Chain
Standards &
Regulations
Production Volumes
Logistics
Quality Requirements
Profitability
Data Gathering Cluster Maps
Customer Surveys
Competitive Positioning
11. Clusters Implemented
By The Competitiveness Company (2002 – 2011)
1. Agribusiness: Sauces & Spices
2. Tourism Unique Jamaica & MyJamaica
3. Entertainment: Jamaica Signature Beats
4. West Indies Sea Island Cotton
5. Ornamental Fish
6. Agro-Processing (In St. Vincent & the
Grenadines)
12. The Issue of Public Goods
• Public Goods created as result of cluster
development (mainly informational goods)
• Free Rider Problems – Puts Trust at Risk
• Project must anticipate free rider problems
• Value of IP generated needs to be recognised
& protected
• Appropriate
systems, contracts, agreements, conversation
s should be in place
• Need for effective safeguards
14. Role of Intellectual Property:
What do Clusters Produce?
• INFORMATIONAL GOODS AND KNOWLEDGE
Names as Identity
Shared Vision
Strategies
Identification of and Access to New Markets
Identification of New Niches
Plans
Brands
New Products
Shared firm-level information
17. Why Trust Matters
Trust: Trusting societies :
o Linked to higher o Incentives to innovate
economic performance o Accumulate physical
capital
o Lower transaction costs o Have higher returns to
human capital.
o More trustworthy o Trust and civic involvement
government linked to better
performance of
o Higher levels of investment government institutions.
o Individuals in social
o Intentional acceptance of dilemmas invest resources
vulnerability based on to improve joint outcomes.
positive expectations of o Cooperation levels higher
others’ intentions (Ostrom than predicted.
2003) o Important to encourage
people to invest themselves
o Social connections lead in groups.
persons to trust that others o To extent that identities
will be motivated to act intertwined with
benevolently. (Tyler, 2001) group, ‘social capital’
created, facilitating
functioning of the social
group.
18. ROLE OF TRUST
Confucius said to his disciple Lao Tzu:
“Three things are needed for good
government.
They are the sword, food and trust.
If a ruler must give up one, let him give
up the sword.
And if something else, let him give up
the food.
Trust should be guarded to the end.”