Traditionel industries in the knowledge economy' Regional mobilisation for growth

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Traditionel industries in the knowledge economy.
Regional mobilisation for growth

• REG LAB annual conference march 2nd 2006

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Key questions

• The challenge outsourcing and closings in
  manufacturing industries is a challenge to
  regional economies.
• Is there a way forward for traditional industries
  in Dk?
• Will all jobs in manufacturing eventually move
  out of DK?
• Can we create new jobs in other parts of the
  value chain?
• Is competitiveness a question of transforming
  old-fashioned manual tasks into knowledge
  intensive jobs for people with higher education?
• What are the key characteristics for successful
  firms in traditional industries?

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Background

• Ambition To provide inspiration for members of
  REG LAB to form strategies and initiatives, that
  can strengthen transformation and competitiveness
  in traditional industries.
• The analysis was finansed by REG LAB members and
  a group of sponsors Ringkøbing Amt, Viborg Amt,
  Nordjyllands Amt, Århus Amt, Erhvervs- og
  Byggestyrelsen, Det jysk-fynske
  erhvervssamarbejde.
• Workshop in Viborg mid December 05 Conclusions
  and presentations from Yorkshire Food Cluster and
  The Packaging Arena, Värmland Sweden. Powerpoints
  on www.reglab.dk.
• Final report can be downloaded on www.reglab.dk
• Booklet communicating conclusions available for a
  broader group of regional stakeholders.

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Loss of jobs in all traditional industries in all
regions

• Traditionelle erhverv
• Geografiske erhvervsspecialiseringer
• God

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• Job growth 1995-2003

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Traditional industries in Denmark A picture
with many colors and shades

• All industries are loosing measured by number of
  jobs.
• Although in minority, there are many examples of
  succesful sub regions.
• There are succesful companies and micro clusters
  in all sections of traditional industries.
• The succesful regions are small.

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High perfoming cases

• Metal industries in Vildbjerg 1000 jobs in 14
  SMVs. Extreme growth.
• Aluminium in Southwest Jutland 16 companies,
  2000 jobs. Hydro Aluminium as locomotive.
• Automative, Styria (Austria). 200 companies,
  45.000 jobs 20.000 new jobs created during past
  10 years.
• Ethnic Foods, Yorkshire (England). 5.000 jobs in
  100-150 primarily SMVs. 17 annual growth.
• The Packaging Arena, Värmland (Sweden). 11.000
  jobs i 250 companies. Restructuring and
  redefinition of value chain focusing on end
  consumers.

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Conclusions from case studies

• It IS possible to create jobs in traditional
  industries, even in a competitive, global
  environment.
• Firms are able to not only compete well, but even
  do it so successfully that they can steal
  business back from China and grow both in terms
  of jobs, turnover and profit.
• Moreover, the continued presence of
  manufacturing skills is often a prerequisite for
  the ability to create competitive jobs in other
  activities such as design, product development,
  marketing and logistics.

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Many success stories in Denmark but why are
they so small and scattered?

• If we are going to increase number of jobs in
  traditional industries, we need them to be much
  bigger. This is the main challenges.
• Lack of cluster policy is the major difference
  between the foreign succes cases and the Danish
  micro clusters.

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Seven Strengths in competitive traditional firms
Trust (Relations, Receptive)
Cluster strengths
Market Competence

• Core Competences

Strong Automation
Company strengths
Entrereneurial Spirit
Coherent value chain
Specialised knowledge institutions
Cluster strengths
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Guide to regional mobilisation for growth
What bricks have been crucial to building
success in the five cases?
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Clusters in traditional industries - the most
important framework conditions

 
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Companies in traditional industries - the most
important framework conditions

 
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How do we do it?

• There is no uniform, fixed methodology. The case
  studies show that each region and cluster has a
  certain history, challenges etc. Methodologies
  vary a lot and are often a result of complex
  processes that are best described looking back.
• However, a few steps seems to be general

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Steps to transform traditional industries
0. Identify clusters, and their economic
potential

• Map value chains
• and relevant knowledge
• environments

2. Efficient cluster organisation
Regional policy maker
3. Strategic cooperation with knowledge
institutions
4. Create awareness, trust and common identity
5. Initiatives targeted towards the 4 company
strengths
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Questions?

• Did we get the Bricks right?
• Are they valid for all industries traditional
  manufacturing as well as new (biotech, IT etc.)?
• Steps to transform did we get these right?
• Is it possible to identify a more detailed,
  generic methodology?
• Are there different methodologies if applied to
  other types for instance creative industries?