The value of clustering innovation in personal care

1
The value of clustering innovation in personal
care

• David Elliott
• B.A. (Lon), M.B.A. (Executive Management) Hull,
  MCIM

2
Presentation

• Clusters
• A case study
• Some thoughts
• Some experiences
• Innovation
• Some conclusions

3
Clusters

• Michael Porter A Cluster can be defined as a
  geographic concentration of inter-connected
  companies, specialised suppliers, service
  providers, firms in related industries and
  associated institutions in particular fields that
  compete but also co-operate.

4
The Diamond Concept
Yorkshire Forward. A Guide to Cluster
Development, 2006
5
The Diamond Concept
Yorkshire Forward. A Guide to Cluster
Development, 2006
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Case study

• British Cod Liver Oils Limited
• Marfleet Refinery Limited
• Seven Seas Healthcare Limited
• Seven Seas Limited.

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Thoughts

• Factor endowments Health from the land and
  sea.
• Ports.
• Knowledge Lorenzos Oil, University, Medics
  etc.
• Network of Companies

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Experiences

• Companies that started in the area Reckitts,
  Smith and Nephew, Phytopharm, GW Pharmaceuticals,
  Essential Nutrition, Anhydro.
• Companies that came to the area Efamol, Grandma
  Vines, Salcura, etc.
• Companies that left the area Grandma Vines,
  Efamol, Phytopharm, GW Pharmaceuticals and
  probably Anhydro.

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Innovation

• From a theoretical perspective, the regional
  dimension to innovation stems from two key
  sources
• tacit knowledge, which does not travel very well
• a well-defined set of external economies of scale
  that are realised within what Marshall termed
  industrial districts, but what are today more
  frequently referred to as clusters.

Frenz, M. Oughton, C. (2005) Innovation in the
UK Regions and Devolved Administrations A
Review of the Literature. DTI ODPM
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Innovation

• Agglomeration economies in production, pools of
  skilled labour, networking, human capital and
  knowledge spillovers are key external economies
  that are subject to processes of cumulative
  causation.
• This leads to a third important factor, namely,
  the ability of firms and regions to learn, which
  is determined by their stock of human capital and
  knowledge, and by their absorptive capacity.

Frenz, M. Oughton, C. (2005) Innovation in the
UK Regions and Devolved Administrations A
Review of the Literature. DTI ODPM
11
Conclusions

• Clusters work, create value, brands and
  employment.
• Need to identify potential and nurture it.
• The successful exploitation of new ideas
  NPD/OPD.

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Conclusions

• Area still has a number of Companies Salcura,
  Power Health, Yorkshire Hemp, Principle Health
  Care Limited, Thornton and Ross, Croda, NK
  Chemicals, Bee Health Group. etc.
• Innovation is easier to perceive in a cluster
  and is certainly easier to act on.

Porter, M.