Cluster Dev & Project Funding 0412 P

Cluster Development & Project Funding Helsinki April 2012

Cluster Navigators’ Clients

Leveraging EU Funding Europe: Latvia Czech Lithuania Denmark Norway Through a clustering approach Estonia Poland Asia: Americas: Finland Spain Bangladesh Malaysia Bahamas Georgia Sweden Cambodia Pakistan Canada Germany Switzerland UAE China Singapore Dominican Iceland Turkey India Thailand Ireland UK Saudi Republic Arabia Korea Vietnam Trinidad USA Africa: Botswana Mozambique Australia Ethiopia Rwanda Kenya Tanzania New Zealand Helsinki, 17 April 2012 Libya Uganda Mauritius South Africa Ifor Ffowcs-Williams Cluster Navigators Ltd UNIDO New Zealand World Bank Advisors to:

Clusters … start naturally Aarhus, Denmark

• #1 wind energy cluster Scone, Australia in the world Population: 5,000 • Now Vestas’s HQ

• 90% of Denmark’s Accounts for 80% of activity Australia’s thoroughbred horse • 80+ companies exports • Full supply chain • 11,000 employees

Bergen, Norway: the world’s leading centre for subsea technology • 100 companies and organisations; employing 4,600. • Three of the world’s leading subsea production system firms, many subcontractors.

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Norway’s cluster focus National ‘Centers of Expertise’

Bergen University: Attracts high value students globally • B.Sc. in Underwater Technology, focuses on subsea operation and maintenance • New Master’s in Underwater Technology

Fish Feed Health Research Advisory Technology farming & & & & Bodø, Norway processing producon environment training ﬁnance Ph.D and Masters degrees in English: • Aquaculture • Marine Ecology • Sustainable Management

NCEA structure

And working with local high schools The world is not flat … it’s spiky

• Marketing an exciting industry, with

international career opportunities • Collaboration between cluster firms and educational institutions to ensure: - Recruitment - Regional pride and identity - Knowledge about aquaculture - ‘Access to the brightest heads and the best hands’

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Isafjord, Iceland Population 2,500

Community Growth Agrement covering three key clusters: Zanzibar Fishing, Marine engineering & Tourism seaweed

cluster Employment for 10,000 women

Clumps & Clutter v. Innovative Clusters Cluster-based economic development Clumps of firms

Moving from clumps & clutter Local agglomerations of self-contained, stand alone, vertically integrated, to integrated isolated firms; innovation systems • Little trust, limited interaction; • Little out sourcing, subcontracting, collaboration • Geographic but not social proximity

Kiruna

Clumps & Clutter v. Innovative Clusters Pajala

Gällivare

Jokkmokk

Övertorneå

Arjeplog Överkalix

Kalix

Clutter of public agencies Luleå Sorsele

Arvidsjaur

Storuman

Skellefteå Lycksele Vilhelmina

Strömsund • Individual silos each with their own development Umeå BIOREFINERY OF THE FUTURE

agendas for the cluster Åre Örnsköldsvik

Kramfors • Absence of teamwork, alignment, trust Östersund Sundsvall

Härjedalen

• Dysfunctional Ljusdal Hudiksvall ROBOTICS VALLEY

Bollnäs

Mora • Remote from private sector needs Söderhamn Malung

Gävle Falun

Vansbro

Avesta

• Priorities set in isolation; Ludvika

Uppsala

Fagersta

Västerås

• And ever changing Köping

Eskilstuna Stockholm

Örebro Katrineholm

Nyköping

• Different levels of government Lidköping GöteborgBIO Norrköping

Linköping Skövde

Tranås

Västervik • EU & National/ELY & Regional Councils & Municipal Borås

Jönköping

Vimmerby Gotland

Nässjö

Värnamo

Oskarshamn

• Short term funding horizons Växjö Ljungby

Kalmar

Älmhult

• But long term needs Karlshamn Karlskrona

Kristianstad

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International research The evidence on clusters is clear

• Firms in clusters are more competitive than similar firms located outside clusters. France: Major Clusters generate: clusters • More employment under • Higher economic growth development • Higher wages • Better productivity

• Higher levels of innovation • More entrepreneurship • More start-ups, and • Attract more investment.

Cluster Development The How

Step 1 Cluster development A centre stage strategy, rather than ‘another project’

A comprehensive framework for a range of economic development agendas, including: • Skills, training; workforce development • SME development; New business start-ups • Investment attraction; migrant attraction • Export development, internationalisation • Rural, community development; • Incubators; Industry/Technology Parks

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Silicon Somewhere clusters Carefully define Some well grounded, the cluster others politician’s dreams

Silicon Alley, Manhattan, New York; Silicon Beach, Santa Cruz; Silicon Bog, Limerick, Ireland; Silicon City , Chicago, USA; Silicon Coast, Auckland, New Zealand; Silicon Corridor, M4, UK; Silicon Desert, Phoenix, 1. Avoid generic 1. Identify specific Arizona; Silicon Ditch, M4, UK; Silicon Dominion,, USA; Silicon Island, California, USA; Silicon Island , Taiwan; Silicon Island, Whidby Island, Washington, USA; Silicon Isle, Ireland; Silicon Kashba, Istanbul; descriptors, e.g. : competencies: Silicon Mesa, New Mexico, USA; Silicon Mountain, Colorado Springs; Silicon Mountain, Pennsylvania, USA; Silicon Mountain, Massachusetts, USA; Silicon Necklace, Boston, Massachusetts, USA; Silicon Oasis, Dubai; Silicon Orchard, Wenatchee Valley, Washington, USA; Silicon Plantation, Virginia, USA; Silicon Plateau , • Engineering • Forestry equipment Bangalore, India; Silicon Polder, Netherlands; Silicon Prairie, Champaign-Urbana, Illinois; Silicon Rainforest , Seattle, Washington, USA; Silicon River, Missouri, USA; Silicon Sandbar, Cape Cod, Massachusetts, USA; Silicon Saxony, Saxony, Germany; Silicon Seaboard, Richmond, Virginia, USA; ; Silicon Seaside, South Norway; • Food products • Pork products Silicon Slopes, Utah, USA; Silicon Snowbank, Minneapolis-St Paul, Minnesota; Silicon Spires, Oxford, UK; Silicon Swamp, Florida, USA; Silicon Triangle, Durham, Nth Carolina, USA; Silicon Tundra, Ottawa, Canada; • Cleantech • Waste water Silicon Valais, Switzerland; Silicon Valley North (Ottawa); Silicon Valley East, Malaysia; Silicon Valley Forge, Pennsylvania, USA; Silicon Valley, Iowa, USA; Silicon Valley of China (Zhongguancun); Silicon Valley of Europe (Dublin); Silicon Valley of Russia (Moscow); Silicon Valley of South Korea (Incheon); Silicon 2. Avoid broad regions 2. Narrow boundaries Valley of Sweden (Kista); Silicon Valley of Taiwan; Silicon Village, Massachusetts, USA; Silicon Village , California, USA; Silicon Vineyard, Okanagan, British Columbia, Canada; Silicon Vineyard, Napa Valley, USA; Silicon Wadi, Israel; Silicon Welly, Wellington, New Zealand; and Cwm Silicon, Wales. Virginia; Silicon Fen , • Finland • Lahti Cambridge, UK; Silicon Forest, Portland, Oregon; Silicon Forest, Australia; Silicon Freeway, Southern California, USA; Silicon Glacier, Montana, USA; Silicon Gorge, Bristol, England; Silicon Glen, Scotland; Silicon Gulch, San Jose – California, USA; Silicon Gulch, Austin, Texas, USA; Silicon Gulf, Davao, Philippines; Silicon Hill, Massachusetts, USA; Silicon Hills, Austin, Texas; Silicon Holler, Washington DC, USA; Silicon Hollow, Tennessee, USA; Silicon Island, Virgin Islands; Silicon Island, New York

Step 3 Initial cluster analysis Building the base Two thrusts: • Initial competitiveness diagnosis, fact based, understanding cluster’s current situation: structure, scale, opportunities, constraints, culture … • Establishing platform for action, Introducing the process; motivating key stakeholders to participate; identifying potential leaders ...

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Example: Board of Directors Steel & Engineering Cluster Värmland, Sweden

• Gert Nilson Uddeholm Tooling ordförande • Ulf Eliasson Rolls-Royce • Lars Blomgren Permec Group • Kjell Edholm PartnerTech • Anders Gustafsson CTF/Karlstads universitet • Kjell-Åke Lindqvist Metso Paper • Bengt Lundström Volvo Construction Equipment • Per Eiritz ”Metso Paper” • Ingemar Olson CCI Valve Technology • Leif Rosén Outokumpu Stainless Steel • Monica Schagerholm Karlstads universitet

Step 5. The preferred future Preferred future example The Vision Ocean engineering cluster

Newfoundland, Canada

Building on the cluster’s current competitive position … with a challenge, a s t r e t c h factor We will make St. John’s, Newfoundland an international destination of choice in ocean technology

Preferred future ICT, Cape Town, South Africa

• CITI will create Cape Town as the IT gateway and training centre of Africa • We will operate in a dynamic and entrepreneurial environment as a cohesive and high trust network of people www.citi.org.za

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Example: Key stepping stones to achieving the vision Newfoundland Ocean Engineering

1. Leadership, cluster culture, teamwork 2. Skills upgrading, aligning university with industry needs 3. Branding the cluster, market development 4. R & D, technology transfer 5. Finance, venture capital

Example Step 7 Short term, tactical Early Action Agendas agenda Newfoundland Ocean Engineering Establishing immediate projects that demonstrate the value of collaboration Stepping Stone: • Branding the cluster, market development Just Early Action Agenda For each of the Priority Steps • Cluster web site, portal do it! • Pick the ‘low hanging fruit’ • Inward /outward missions • Not wish lists for others • Proactive media coverage • Airport signage

Step 9 In-depth analysis, benchmarking

Fact based, outward focussed analysis

• Fundamentally understanding the cluster’s competitive position, the local specialisation • Benchmarking v. reference clusters

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Benchmarking visits Example: Norway’s Mountain Tourism cluster visit to Banff

• Identify an appropriate (model) reference cluster • Benchmarking visits provide a collaborative learning opportunity • Business + public agencies + Benchmarking academics sharing their learning against other • Builds connections, trust, social capital amongst the travellers relevant • B2B links often develop during a clusters visit • Visits can provide motivating data shocks

Long-term cluster strategies Most common cluster actions Source: The Cluster Initiative Greenbook

Long-term agenda Long-term agenda IT Incubator Cape Town Building one-stop-service Home for 50 + start-ups centers E.g. Biella, Italy

Providing specialised support for 200 textile machinery firms, and 1300 textile firms 1. Training 2. Applied research 3. Know-how transfer 4. Export development

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Step 11 Linking the cluster Building on a solid understanding of the cluster’s strengths

Three levels of leverage: • With other regional clusters • Provincially, Nationally, with clusters in the same sector • Internationally, with clusters in the same sector

International Collaborations

Cambridge UK Medicon Valley Lifescience Alliance Corridor51 France

Step 12 Review, evaluation 24+ months after the launch Governance and Financing Over time, sustainable clustering initiatives Two dimensions: have: Triple helix governance with strong • private sector leadership • The pay-off from the clustering process • Leaders with passion who understand • Is the competitivness of the cluster the broad picture being upgraded? • Multiple funding sources in place, predominantly local, with support from national & EU agencies

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Mats Williams St. John’s, Newfoundland Center for Strategy & Competitiveness Stockholm School of Economics

‘Find the BIG QUESTIONS that are common’

Oceans Advance St. John’s Cluster 2004 Newfoundland Ship Design & Construcon The image cannot be displayed. Your computer may not have enough The image cannot bememory displayed. to Youropen computerthe image, may or the not image have enough may have memory been corrupted. to open the image, or the image may have beenRestart corrupted. your computer, Restart andyour then computer, open the and file then again. open If the filered again.x still If the red x Offshore Structural Fisheries & Ice Engineering still appears, you mayappears, have to youdelete may the have image to deleteand then the insertimage it and again. then insert it again. Design Aquaculture CFD Offshore Oil & Gas Naval Numerical Architecture Modeling

Ocean Mapping Physical Modeling

Underwater Communicaons Hydro- Acouscs Propulsion Systems Underwater Technology Marine Subsea Environmental Survival Technology Marime Defense Technology Transportaon & Monitoring & Coastal Security Shipping

Marine Science

Memorial University Jan. 23, 2012

Oceans advance cluster, Newfoundland The Centre for Logistics Systems Building Whole-of-Government support and Material Handling Kauhajoki, Western Finland

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Technology Center Logistia Technology Center Logistia

Co-operation with Research University of Vaasa Professorship of Logistics Systems, Center of Learning and a international research team

Technology Center Logistia Financing cluster development

• No one funder should be able to unduly influence the cluster’s development agenda Business incubator Faartti • Multiple short-term project funding “From idea to business” enables engagement on long-term projects 24+ new companies… • Establishing a cluster incubator? • Training centre? • Integrating migrants? • Export development? • Links with neighboring clusters, Russia …

Cluster development & project funding Ifor Ffowcs-Williams CEO, Cluster Navigators Ltd 1. Cluster development is long-term 22 Examiner St, Nelson 7010 economic development New Zealand

2. Provides an integrated, sustainable [email protected] framework for a series of short-term + 64 3 548 0606 project activities www.clusternavigators.com

3. Sustainable projects needs to be www.linkedin.com/in/clusterdevelopment Skype: ‘clusterguy’ • Centered on the region’s key clusters Blog: www.e4oncompetitiveness.com

• Driven by the cluster’s strategic priorities, not the availability of project funds