Business Clusters PROMOTING ENTERPRISE IN CENTRAL AND EASTERN EUROPE Business Clusters of firms and related organisations in a range of industry specialisations are a striking feature of the economic landscape in all countries. Their growth and survival depends on Clusters internal processes of specialisation, co-operation and rivalry, and knowledge flows that underpin the competitiveness of the firms within them. Cluster building is now among the PROMOTING ENTERPRISE most important economic development activities in OECD countries and beyond. This book looks at the importance and potential of cluster initiatives in Central and Eastern Europe as IN CENTRAL AND these countries integrate ever more strongly into the global economy. Existing clusters are EASTERN EUROPE mapped, recent policy advances are described and conclusions are drawn on the potential of business clusters to foster economic growth in the wider Central, East and South East European region. CLUSTERS: BUSINESS Do clusters only occur spontaneously or can they be formally encouraged? What role do public authorities play? What, if any, is the impact of specific national political and economic initial conditions on cluster development? Which policies work best? These are just some of the questions raised in this publication, which provides practical insights on clusters and cluster policies to governments, local development practitioners and entrepreneurs alike. This publication is one of the outputs of a major programme of conferences and research on cluster building in Central and Eastern Europe led by the OECD LEED Programme in collaboration with the Central European Initiative and the European Bank for Reconstruction Europe Eastern and Central in Enterprise Promoting and Development. 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For more information about this award-winning service and free trials ask your librarian, or write to us at [email protected]. www.oecd.org ISBN 92-64-00710-5 -:HSTCQE=UU\VU^: 84 2005 01 1 P Caecilia_histo_gen_A_16x23.fm Page 1 Monday, July 25, 2005 10:34 AM Local Economic and Employment Development Business Clusters PROMOTING ENTERPRISE IN CENTRAL AND EASTERN EUROPE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Caecilia_histo_gen_A_16x23.fm Page 2 Monday, July 25, 2005 10:34 AM ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. Publié en français sous le titre : Titre de l’ouvrage Sous-titre © OECD 2005 No reproduction, copy, transmission or translation of this publication may be made without written permission. Applications should be sent to OECD Publishing: [email protected] or by fax (33 1) 45 24 13 91. Permission to photocopy a portion of this work should be addressed to the Centre français d'exploitation du droit de copie, 20, rue des Grands-Augustins, 75006 Paris, France ([email protected]). FOREWORD Foreword I am very pleased to introduce this new publication from the OECD LEED Programme. It tackles a subject of great importance to economic development in Central, East and South East Europe. The cluster mapping, analysis of existing cluster policies and recommendations for policy development presented in this book are intended to support policy-makers, entrepreneurs and other decision-makers working in these economies and beyond. They show how the cluster concept can be operationalised to support small firm growth and employment creation at local level. This publication aims to inform national, regional and local policy makers in Central, East and South East European countries about policies to develop business clusters (local concentrations of horizontally or vertically linked firms that specialise in related lines of business together with supporting organisations). In addition, it aims to share cluster experiences from Central and Eastern Europe with other OECD member and non- member countries. Since its founding in 1982, the OECD Local Economic and Employment Development (LEED) Programme has played a critical role in identifying and disseminating information on international innovations and best practices in local economic and employment development. LEED quickly grasped the importance of clusters and inter-firm networks for entrepreneurship and employment creation. Over the years, it has organised many conferences and studies on the subject with the aim of alerting entrepreneurs, governments and development agencies to the potential of the cluster concept and informing policy makers on the most appropriate forms of intervention. The LEED Programme has also been active for many years in the promotion of entrepreneurship and small and medium-sized enterprise (SME) development in Central and Eastern Europe. An important step was taken to reinforce this work in 2003 with the creation of the OECD LEED Trento Centre for Local Development, which provides a structure for policy analysis, information exchange and capacity building activities to promote entrepreneurship, local governance and social cohesion with a special focus on Central, East and South East European countries. Business Clusters: Promoting Enterprise in Central and Eastern Europe – ISBN- 92-64-00710-5 © OECD 2005 3 FOREWORD This book forms part of LEED’s ongoing work on clusters and on entrepreneurship promotion in the OECD LEED Trento Centre target countries. It is the fruit of a joint project with the Central European Initiative/European Bank for Reconstruction and Development called “Clusters in Transition Economies”. In addition to detailed analytical work, the project involved five cluster conferences in Czech Republic, Hungary, Poland, Slovakia and Slovenia 8in 2001-2002 and the major “East-West Cluster Conference” that took place in Udine and Grado, Italy, in October 2002. The major contribution of the book is a first cluster mapping exercise in five case study countries, which identifies and describes the existing and emerging clusters in each country. In addition, the book describes the policies in place in aech country to promote cluster development and makes recommendations on how cluster development can be better supported by policy. The final section of the book draws out policy recommendations relevant to all Central, East and South East European countries in three thematic areas: cluster strategy, programme design and cluster management. With this book, the newly established OECD Centre for Entrepreneurship, SMEs and Local Development, of which the LEED Programme is a part along with the Working Party on SMEs and Entrepreneurship and the Tourism Committee, provides practical insights on clusters and cluster policies to governments, local development practitioners and entrepreneurs alike who want to use the cluster concept to pursue a wide range of economic development-related goals. The Central, East and South East Europe region has been through much change in recent years. It is now time to move beyond the free market transition to establish solid foundations for sustainable economic growth. There is still much work to do and solid analysis and forums for the exchange of ideas are needed to support future policy development. The OECD Centre for Entrepreneurship, SMEs and Local Development, and in particular its OECD LEED Trento Centre, will be closely involved in this process in the coming years. Sergio Arzeni Director, OECD Centre for Entrepreneurship Head, OECD LEED Programme 4 BUSINESS CLUSTERS: PROMOTING ENTERPRISE IN CENTRAL AND EASTERN EUROPE – ISBN- 92-64-00710-5 © OECD 2005 ACKNOWLEDGEMENTS ACKNOWLEDGEMENTS This book has been prepared and edited by Johanna Möhring, consultant to the OECD LEED Programme. The OECD LEED Programme would like to thank the Central European Initiative/European Bank for