Cluster strategies, tools, and actions

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Cluster strategies, tools, and actions

• Just Clusters
• Implementation
• Workshops

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Clusters offer a framework for

• Organizing engaging industry
• Delivering services
• Designing education training
• Targeting investments
• Supporting entrepreneurs
• Branding and marketing a region

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Within each, most actions can be classified under
three basic kinds of activity

• Collaborating
• Specializing
• Targeting

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The first, collaborating, is fundamental to the
success of clusters

• The synergy of clusters comes from the
  application of networks and other forms of
  associative behavior

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Survey of Objectives of Cluster Initiatives

• 96 Establish networks among firms
• 96 Foster networks among people
• 94 Expand existing firms
• 91 Increase innovativeness
• 86 Attract new firms
• 84 Promote exports
• 83 Brand region
• 76 Provide technical mgmt training

Cluster Initiative Greenbook, The Competitiveness
Institute, 2003
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Oregons legislated pre-cluster programs
(1992-1995)

• Key Industries Program
• Flexible networks (examples)- Interactive
  Multimedia-Based Workforce Training- Marketing
  network for grapes and wine- Green forest
  products- Furniture Oregon/International
  (marketing)- Finding industry applications for
  biotech network- Marine services/fisheries
  marketing, standards- Oregon publishers training
  and equipment sharing- Oregon Film Network to
  share equipment, projects

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How frequently companies collaborate with various
actors in innovation process
Council on Competitiveness Survey, 2006
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1. Actions for organizing and engaging
industry to, e.g

• Facilitate networking
• Provide cluster with collective voice
• Identify common needs
• Share knowledge
• Aggregate demand
• Scan, plan for future
• Provide services at lower costs

Finding or forming a collective identity
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Cluster associations that work--and why

• AZ Optics Industry Association (Leadership)
• Montana BioScience Alliance (Recognition)
• Connecticut Plastics Council (Political clout)
• Carolina Hosiery Association (External threat)
• New York New Media Association (Networking)
• Tri-State Manufacturers Association (Isolation)
• Appalachian by Design (Scale)

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Technology Coast Manufacturing Engineering
Network (Florida)

• Association formed to upgrade skills, develop
  new products, (TeCMEN)
• 31 members in defense electronics
• Catalyst was community college, network employed
  full-time director housed at college
• Support from state, foundations, dues.
• Results inside track with federal labs, multiple
  hard production networks, new businesses.
• Latest accomplishment was convincing state to
  allow college to offer BS in management.

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Avoiding barriers to inclusivity

• Membership costs and guidelines
• Time and place of meetings and events
• Unwelcoming atmosphere
• Language or cultural differences (lack of shared
  values)
• Poor communications

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2. Actions for organizing and delivering
services

• Collect and disseminate information
• Deliver services through network
• Establish one-stop cluster hubs
• Form multi-disiplinary cluster SWAT teams (bus,
  tech, marketing, training
• Facilitate global connections

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The Hosiery Technology Center Catawba Valley
Community College (North Carolina)

• Trains entry level workers and technicians
• ESL using hosiery environment as context
• Trains management and customers
• Conducts quality testing for companies
• Demonstrates new equipment
• Web site for jobs, procurement and e-commerce
• Brokers research and production networks
• Lean manufacturing, product development\
• Improve design capabilities

www.legsource.com
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North Carolina Biotechnology Center

• 1981 State established NC Biotechnology Center
• 1984 becomes private non-profit
• 60 member staff
• 13.3M budget in 2005-06, 12.1 from legislature
• Invested 174M in biotech development to date
• Sponsored summer workshops for 1,250 teachers
• Sponsored gt 450 research projects, led to 141
  federal match
• Partnership with community college system
• Hosts Council on Entrepreneurship

150 pharma companies employ 18,500 750 CROs
employ 16,000
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3. Actions for building workforce (more
later)

• Qualify specialized labor force
• Use clusters as context for learning
• Establish cluster skills centers
• Form partnerships between education clusters
• Support regional skills alliances
• Create inter-regional cluster alliances

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Targeting Wood -Based Clusters
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4. Actions for innovation entrepreneurship

• Specialize with MEP and SBDCs
• Support cluster incubators
• Facilitate entrepreneurial and learning networks
• Establish innovation hubs
• Links to similar clusters elsewhere
• Recognize value of learning

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Innovation (as well as inspiration and imitation)
comes from the

• labs that do research
• associations that companies keep and the
  relationships they develop
• connections to benchmark practices and innovators
  anywhere
• workforce that is expected and enabled to learn,
  experiment, and innovate
• marketplace and customers

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Hosts for Innovation Hubs
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Cluster Innovation Center Functions

• Gathering knowledge - Surveying market and
  member needs (e.g. training, tech)
• Disseminating knowledge - trends in technology,
  design, markets, workforce - benchmark trend
  setters - training, services, consultants,
  etc. - selected education training
• Conducting research - securing funding -
  shared special equipment, technology, lab space
  - carry out RD on products, processes,
  packaging, etc.
• Social capital - conferences and meetings -
  facilitating networking - collaborative RD
• Providing links to global knowledge and markets
• Entrepreneurship - incubating new companies -
  links to capital sources

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University Driven Waterloo (Canada) ICT Cluster
1900s German entrepreneurs Tech-industrial base,
family-owned
1967 Canadas largest computer
1974 Developed new FORTRAN Compiler, spun off
company
1924 Waterloo Lutheran College--liberal arts
1970s 80s ICT spinoffs, 59 hi tech firms since
1973
1956 The Waterloo Plan--Local talent pool
cutting edge knowledge Establ. Waterloo
University Cooperative education with industry

• Current status
• 468 tech firms
• -70 1 to 9 employees
• -niche ICT firms (little comp.)
• -23 ICT patents, 1998-2002
• -64 ICT WF creative class
• -Little venture capital

1950s Reqd numerical analysis For engineering
students, modeling
1960 First IBM computer
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ACEnets strategy

• Focus on food/ag/technology clusters
• Get entrepreneurs to innovate, network, and
  collaborate
• Introduce art and local culture in products and
  packaging
• Get everyone in community (e.g., consumers,
  organizations, and banks) to support
  entrepreneurs
• Works with schools, especially on entrepreneurial
  education that focuses of particular type of
  business

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A cluster-focused incubator in Appalachian Ohio

• Kitchen Incubator Networking Hub Ultimately
  builds a larger network

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Alabamas Auto Cluster
Social capital Networking
AL Automotive Mfgers Assoc.
AL Technology Network
Core
AL Port Authority Intnl Trade Center Consulates L
anguage schools
Suppliers
Support functions
Global
Assemblers - Mercedes - Honda - Hyundai
1st tier
Parts
2nd tier

• University of Alabama
• AL Productivity Center
• Ctr for Adv. Vehicle
• Auburn University
• Other colleges

• Engines
• Toyota
• Intl Diesel

3rd tier
Supply chain - Mercedes (35) - Honda (28) -
Hyundai (34)

• -Workforce
• -Retraining
• Interns
• Apprentices

Community Colleges Vocational schools Bevill
Centers
AL Indust. Dev. Training (AIDT)
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5. Actions for Allocating Resources Investments

• Incentives or set asides for multi-firm
  activities
• Invest in RD relevant to cluster
• Seed and bridge funds for new companies or
  products
• Fund critical foundation factors (e.g., K-12,
  transportation)

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Turning RD into a real bio cluster

• North Carolina at mid-century was among poorest,
  most rural states, low levels of education,
  mostly tobacco and traditional industry
• 1958 state created Research Triangle Park
• 1968 First major bio tenant--National Institute
  of Environmental Health Sciences offered land for
  lab
• 1970s Burroughs Wellcome, Glaxo locate in RTP
• 1981 State established NC Biotechnology Center,
  becomes private non-profit in 1984
• BASF, Bayer, Wyeth, Biogen, Novo Nordisk follow

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Alabamas Auto Cluster
1997 Mercedes-Benz 4,500 team members 1.2 B
invested 372 M incentives
2005 Hyundai 2,000 associates 1.1 B
invested 252 M incentives
2002 Intl Diesel 300 associates 400 M
invested - incentives
2001 Honda 4,300 associates 1.1 B invested 248
M incentives
2003 Toyota engines 800 associates 490 M
invested 33 M

• Why Alabama (D-B)?
• WF Training
• Infrastructure
• University presence
• Supplier base
• Business climate
• Quality of life and

-AL Auto Mfgers Assoc. -AL Tech. Network -Econ
Dev Partnership
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6. Actions for marketing and branding clusters

• Target inward investments
• Promote clusters in global markets
• Form export networks
• Look for opportunities to brand regions and/or
  products

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Silicon Valley Silicon Alley
Silicon Glen Silicon Fen Silicon Bog
Silicon BeachSilicon Ditch
Silicon Forest Silicon Tundra Silicon
Sandbar Silicon Parkway
Silicon PrairieSilicon Polder Silicon
Crescent
Branding Strengths-- or Dreams of Strength
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Appalachian by Design networking to get scale
A Training, Marketing and Design Corporation for
Appalachian Artisans

• Started in 1991 with 8 women with home knitting
  machines
• ABD offers training year long apprenticeships,
  business skills, help with machine purchase
• ABD gets orders, notifies network, requests
  delivery commitments
• Operates boutiques at Greenbriar resort

http//www.abdinc.org
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North CarolinaMotorsport Cluster
NC Motorsport Association NASCAR Drivers
Assoc. NASCAR Crew chiefs club
NC Governors Advisory Council
Sponsors
Repairs Spare parts Electronics
Tourism
NASCAR Teams Motor Vehicles and parts 400
firms 24,400 jobs
Fan paraphernalia(caps, shirts, books)
Fuel
Broadcast Media rights
Testing facilities
Tracks race venues
Community colleges
NASCAR Technical Institute
NASCAR Museum
Economic impact, 5 billion Investment, 20
billion
UNC, RD
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Common barriers to successful cluster strategies

• Poor definition of clusters
• Using membership as measure of success
• Insularity and isolation (lock-in)
• Excessive attention to recruitment and large
  firms
• Assuming one size strategy fits all clusters
• Insufficient support and impatience (too little
  time to achieve results)
• Failure to identify or understand what makes the
  cluster work