IPAs and cluster promotion : A new field for private-public partnerships

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IPAs and cluster promotion A new field for
private-public partnerships
Fabrice Hatem, AFII, EMN
Unctad Workshop on policy advocacy Geneva,
November the 23th
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New stakes for developed economies

• Loss of competitiveness/attractiveness in some
  activities (low and medium added-value
  manufacturing, offshoring of some services)
• New market opportunities in high added value,
  innovative and services activites
• A specialization on those activities can help to
  1) make up for the loss of more  traditional 
  ones 2) and/or perenize some of them by an
  upgrading of their content in added value and
  innovative capabilities
• Ex business functions (RD centers, SSC),
  industries (biotechs), niche markets for new
  products/services (dermocosmetics, nutraceutics)

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New agendas for economic development policies

• Transition to Information and knowledge-based
  economy (ex Lisbon agenda in the EU)
• increase RD capabilities (finance / human
  ressources)
• Develop education and train people at all levels
  (technicians, engineers, scientists, vocational
  training)
• Develop partnership networks (ex
  public/private, SME/large groups) for innovative
  projects (new products/process, organisation of
  the value chain)
• Encourage entrepreneurship, especially in
  knowledgde-based activities (start-up in ITC,
  life sciences)
• Favour the strenghtening of excellence centers
  (clusters, industrial districts, metropolitan
  districts for services activities)

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Attractiveness policies can help to achieve those
goals

• Attractiveness/promotion policies reflect those
  new stakes and goals of the territorial
  development policies in developed economiesbut
  also in developing and transition economies
• Developed countries examples of Ireland (from
  manufacturing to biotechs), Singapore (focus on
  the knowledge economy), The Netherlands (new
  promotion policy aimed at attracting high added
  value projects), Sweden (promotion policy focused
  on life sciences, ITC, HAV services)
• But also developping and transition economies
  exemples of the Czech republic (from garments to
  RD centers), Northern Mexico (from black and
  white TV sets to flat screens), Tunisia (from
  sub-contrating in shirts to co-contracting in
  medium added value textile/garment products)

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What and whom should we try to attract ?

• Knowledge-based activities (ex software,
  biotechs, nanotechs)
• Innovative and HAV segments in traditional
  industries (ex technical textiles,
  dermocosmetics,)
• New kind of services (ex private kindergardens)
  
• RD financing (venture capital, subcontracting of
  RD). Ex Israël, Walles
• RD centres (ex Crolles project in France,
  automotive development centers in Hungary..)
• Qualified manpower (students, researchers,
  engineers, entrepreneurs). Ex home sweet Home
  programm in the french region of Provence).
• Other added value or strategic activities
  (Headquarters)

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The key- role of clusters in innovation

• Definition spatial concentration of research,
  training, production, and financing activities,
  sustained by targeted public developement
  policies, and organized through partnership
  networks for the development of innovative
  projects and know-how transfers
• Play a key role in innovation and growth for the
  most advanced economies (favour diffusion of
  innovation, critical mass effects on specific
  techniques and/or industries, entrepreneurship
  culture).
• According to OCO Consulting census of european
  clusters, UK and France are well endowed for ITC
  and software, Italy and Spain for textile, UK for
  financial activities, Germany for automotive,
  Switzerland for pharmaceuticals, etc.
• Some are already full-scale clusters (Crolles and
  Sophia for ITC In France, Midlands software in
  the UK), other are only potential ones (ex
  microelectonic devices in Morocco).

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Cluster and attractiveness a double way relation

• Cluster as a factor of efficiency for promotion
  policies territorial diffenciation effect,
  implication of new partners (private companies,
  labs,), magnet effect (launching of new
  projects, endogenous dynamics as a factor of
  attractiveness). Ex  pôles de compétitivité 
  in France.
• FDI and external parnerships as a factor of
  strenghtening of the cluster agglomeration and
  critical mass effects (supply and markets),
  ressources (skills, know-how, financing),
  integration in international cooperation networks
  and spillover effects, remediation to weaknesses
  in the local offer and/or valuation of an
  inexploited potential (ex clinical tests for
  vaccines in the Lyon area).
• Nevertheless, beware of excessive enthousiasm
  1) attractiveness does not only rely upon
  clusters 2) the notion of  clusters , as seen
  upwards, is sometimes blured 3) the existence
  of large-scale spilover effects is not totally
  proved by the litterature 4) there is an
  on-going debate on the risk of  technology
  captation  by foreign investors (ex chinese)
  in high tech.

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Role of IPAs in cluster development

• Contribute to the identification of the
  existing/potential cluster and/or act as an
  order-taker of more global development policies
  ( Downward loop )
• Benchmark those clusters against their competors
  carry out a SWOT analysis of the cluster
• Policy advocacy function. Identify weaknesses
  and/or potential development fields and advocate
  remediation policies ( Upward loop )
• Territorial development function directly take
  part in the cluster development (ex real
  estate, definition of the territorial product,
  support activities and structure as in Paris
  Paris biopark, Paris cyber village)
• Device a promotion policy target potential
  investors (those who are both possible and
  profitable to attract), set up objectives and
  programmes, device promotional material.

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Cluster promotion open new fields of partnership

• The existence of cluster is in itself a strong
  asset for the implementation of promotion
  policies (differenciation/magnet effects)
• IPAs can help local cluster partners to market
  their projects (adress notebook, known-how in
  promotion activities such as seminars, roadshows,
  organisation of B2B meetings, go-between role)
• Local partner master high-level technical skills
  which can be mobilized by IPAs in their
  promotional activity (legitimization effects vs
  the potential investor).
• Direct participation in cluster development
  projets (ex neurosciences in Sweden
  international-oriented tertiary functions and
  media activities in the Marseille/Euromed
  project)
• After-care is also a way to promote cluster
  developement through a good integration of the
  foreign company in its local environnement,
  leading to a development of linkages and the
  launching of new projects.

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Thank youfabrice.hatem_at_afii.fr