presentation done by ifor williams

TCI Delhi Cluster Development: The How 11/29/10

© Custer Navigators Ltd 2010 1

1. Introducingaprocessforstar%ngaclusteringini4a4ve,or

2. Forrenewal,revitalisa%onofacurrentclusteringini4a4ve

ClusterDevelopment:TheHow,inTwelveSteps

TCIDelhiNovember,2010IforFfowcs‐Williams

CEO,ClusterNavigatorsLtd,NewZealand

Aclusteringini%a%veis…

…anorganisiedcollabora%onwithfirms,governmentandacademiawithinaconcentratedgeographicalarea

•  coopera'ngtowardscommongoals,

•  establishingcloselinkagesandworkingalliances

…toupgradecompe%%veness

Upgradingacluster’scompe%%veness

Designprinciples,12Steps

•  MovingfromclumpsoffirmsandacluCerofpublicagencies

•  Changenevercomeseasy,andtakes4me

•  Successfultransforma4onneedsacoali4onofvolunteers

•  Shorttermwinsbuildsthecredibilitytoaddresssubstan4veac4vi4es

ClusterdevelopmentDrawingonbothsidesofthebrain

LogicDetails

Safe

FeelingsBigpictureRisktaking

Step1:IntroducingrelevanceMobilisingsupport

•  Introducingtherelevanceofclusterstopoten4alfunders,usuallyapublicagency

•  Obtainingtheresourcestoproac'velyengageinthedevelopmentofpriorityclusters

•  Muchmorethanananalysisexercise



Posi%oningclusterdevelopmentAcentrestagestrategyNot‘anotherproject’

Acomprehensiveframeworkforarangeofeconomicdevelopmentagendas,including:•  Skills,training;workforcedevelopment•  SMEdevelopment;Newbusinessstart‐ups•  InvestmentaRrac4on;migrantaRrac4on•  Exportdevelopment,interna4onalisa4on•  Rural,communitydevelopment;•  Incubators;Industry/TechnologyParks…

Step2:Iden%fying,priori%singclusters

Segmen%ngthelocaleconomy

•  Themajorityofjobsandbusinessesineverylocaleconomyarethesame:•  Restaurants,retail,healthcare,housebuilding,vehiclerepair…

•  Aboutathirddiffer:•  Thetradedsector•  Firmsinthissectordrivethelocaleconomy,pullinthewealth

Iden%fyingthetradedclustersThepriori%esforearlypublicaCen%on

Shortlistedclustersshould:•  Drawontheregion’sstrengths,specialisa4ons•  Maycenteronaspecialisedcapability,aculturalstrength,atechnologyplaYorm

•  AlreadyaRractincometotheregion

•  Alreadyhavearangeoffirms•  Haveappealforfunders

•  Focusonthestrongclusters,nottheweak

SiliconAlley,ManhaRan,New York;SiliconBeach, Santa Cruz;USA;Silicon Bog, Limerick, Ireland;SiliconCity,Chicago,USA;SiliconCoast,Auckland,NewZealand;SiliconCorridor,M4,UK;SiliconDesert,Phoenix,Arizona; Silicon Ditch, M4, UK; Silicon Dominion, Virginia; Silicon Fen, Cambridge, UK; Silicon Forest,Portland, Oregon; Silicon Forest, Australia; Silicon Freeway, Southern California, USA; Silicon Glacier,Montana,USA;SiliconGorge, Bristol, England;SiliconGlen, Scotland;SiliconGulch, San Jose – California,USA; SiliconGulch, Aus4n, Texas, USA; SiliconGulf, Davao, Philippines; SiliconHill, MassachuseRs, USA;SiliconHills,Aus4n,Texas;SiliconHoller,WashingtonDC,USA;SiliconHollow,Tennessee,USA;SiliconIsland,Virgin Islands;Silicon Island, New York, USA;Silicon Island, California, USA;Silicon Island, Taiwan;SiliconIsland,Whidby Island,Washington, USA; Silicon Isle, Ireland; SiliconKashba, Istanbul; SiliconMesa, NewMexico,USA;SiliconMountain, Colorado Springs;SiliconMountain, Pennsylvania,USA;SiliconMountain,MassachuseRs, USA; SiliconNecklace, Boston,MassachuseRs, USA; Silicon Oasis, Dubai; SiliconOrchard,Wenatchee Valley, Washington, USA; Silicon Planta%on, Virginia, USA; Silicon Plateau, Bangalore, India;Silicon Polder, Netherlands; Silicon Prairie, Champaign‐Urbana, Illinois; Silicon Rainforest, SeaRle,Washington, USA; Silicon River, Missouri, USA; Silicon Sandbar, Cape Cod, MassachuseRs, USA; SiliconSaxony,Saxony,Germany;SiliconSeaboard,Richmond,Virginia,USA;;SiliconSeaside,SouthNorway;SiliconSlopes, Utah, USA; Silicon Snowbank, Minneapolis‐St Paul, Minnesota; Silicon Spires, Oxford, UK; SiliconSwamp, Florida,USA;SiliconTriangle,Durham,NthCarolina,USA;SiliconTundra,ORawa,Canada;SiliconValais, Switzerland; Silicon Valley North, ORawa; Silicon Valley East, Malaysia; Silicon Valley Forge,Pennsylvania,USA;SiliconValley,Iowa,USA;SiliconValleyofChina,Zhongguancun;SiliconValleyofEurope(Dublin);SiliconValleyofRussia,Moscow;SiliconValleyofSouthKorea,Incheon;SiliconValleyofSweden(Kista);SiliconValleyofTaiwan;SiliconVillage,MassachuseRs,USA;SiliconVillage,California,USA;SiliconVineyard, Okanagan, Bri4sh Columbia, Canada; Silicon Vineyard, Napa Valley, USA; Silicon Wadi, Israel;SiliconWelly,Wellington,NewZealand;andCwmSilicon,Wales.

Notanother‘SiliconSomewhere’



TheClusterMusterHighprofile,kick‐offpublicmee%ng

Roundingupthe‘usualsuspects’…andtheunusualones

•  Publiclyannouncingtheini4a4ve•  Introducingthefacilitator(s)•  Reques4ngthecluster’sstakeholderstobeavailableforanearly1‐on‐1mee4ng

•  Announcingthedateforafirstworkshop•  Presen4ngfeedbackontheinterviewsandanalysis

Soloplayers,hardtomusterDon’twaitforall

Step3:Ini%alclusteranalysisTwothrusts

1.  Ini4alcompe%%venessdiagnosis,factbased,understandingcluster’scurrentsitua4on:structure,scale,opportuni4es,constraints,culture…

2.  Establishingapla]ormforac%on,Introducingtheprocess;mo4va4ngkeystakeholderstopar4cipate;iden4fyingthecluster’stalent&poten4alleaders...

ClusteranalysisDevelopingasharedunderstandingacrosstheclusteroncompe%%veness

Step3:Ini%alanalysisessen%alsInwardlookingemphasis

•  Iden4fyingthecluster’sleadfirms•  Theinnovators…andtheirsuccessfactors

•  Iden4fyingotherstakeholders…supportfirms,soiinfrastructure•  Needtodiligentlyiden4fy;

•  Detec4veworkneeded•  Muchmorethana‘YellowPages’orindustryassocia4onlist

•  Securingtheirinvolvement



HistorymaCers!Understandthecluster’sfounda%ons

•  Howdidtheclusterstart?Why?

•  Howdiditgrow?Whatchanges?•  Evolu4onofthelocalspecialisa4on?•  Whatchallengesalongtheway?Whatpublicsupport?

•  Developmentoflinks,trustwithinthecluster?•  Levelofsocialproximity?Subcontrac4ng?Interdependencies?Jointac4ons?Universityac4vity?

•  Developmentofgloballinks•  Exports?Overseasinvestment?Interna4onalisa4on?

Gatheringclustersta%s%csCau%on!

•  Clustersarebroaderthanan‘industry’;maybeatechnology

•  Clusterboundaries≠regionalboundaries•  Establishthecluster’sfunc%onalboundary•  Importanceofsurveys,ratherthananover‐analysisofpublisheddata

Ini%alanalysisprocessFace‐to‐faceinterviewing

•  Interviewingoienmerits80%oftheanalysiseffort;GemngbehindthewriRenword

•  Introducingtheclusterconcepttoscep4cs•  Buildingalliesforsubsequentmee4ngs

•  Ini4alassessmentofleaders•  Anovertagenda,andacovertone

EstablishtheBaselineDataWhatwillbeonthecluster’s

dashboardtomeasureprogress?

Establishingtheperformanceindicators

•  Numberoffirms?Employees?•  Numberofnewfirmstotheregion?•  Totalsales?

•  %local,%na4onal,%interna4onal?•  Numberofstudentsinlocaltrainingdirectedatthecluster’sneeds?

•  %workforcewithhighereduca4on?•  ……………

Based on Oxford Research, Norway

Step4:FormingtheLeadershipGroup

Ac4veclusteringdemands:•  Acoali4onofpreferredleaderswhounderstandandcareaboutthebigpicture

•  AGroupwithabalanceofskills,abletoaggressivelyworkasateam

FacilitatorplaysakeyroleinestablishingGroup



BuildingtheLeadershipGroup

Takes%metogettherightpeopleonthebus…andintherightseats

thewrongpeopleoffthebus

ClusterLeadershipBus

Step5:Developingthepreferredfuture

•  Apreferredscenario…theclusteratit’sfuturebest

•  Acommonreasonforthefailureofclusteringini4a4vesislackofagreementonthedirec4on

ThePreferredFuture

Thevision

ThepreferredfutureTheVision

Building on the cluster’s current competitive position … with a challenge,

a s t r e t c h factor

PreferredfutureexampleFilmclusterAuckland,NewZealand

Avibrant,growingscreenproduc%onindustryintheAucklandregion.

Ac%vitydoublingoverthecoming5years.



Step6:StandinginthefutureIden%fyingthesteppingstones

•  Lookingbackfromthefuture:

Backcas%ng

•  Notacon4nua4onofthepresent…Forecas4ng

Auckland,NZFilmClusterVision:vibrantgrowingindustry

doublingac%vityin5years

Key steps Voting

Culture 28

Skills, training 25

Hard infrastructure 19

New investment 18

International marketing 18

I P & R & D 14

Step7:Shortterm,tac%calagenda

ForeachofthePrioritySteps•  Pickthe‘lowhangingfruit’•  Notwishlistsforothers

Immediateprojectsthatdemonstratethevalueofcollabora4on

Justdoit!

Projectimplementa%onMovingquicklyintoac%on

•  Buildteamsaroundthepriorityac4onprojects

•  CATs…ClusterAc%onTeams•  Teamsworkbestwithvoluntarymembers

•  Andself‐destructontaskcomple4on



Step8:Launching,formalisingthecluster

1.Launchingthecluster•  A‘TownHall’publicevent•  3‐6monthsaierfinalworkshop

•  Highlightini4alsuccesses•  Andtheforwardagenda•  Ensuremediacoverage!

ClusterlaunchLakeKatwesaltcluster,Uganda

Take%meinformalisingthecluster’sstructure

•  Firmswantearlybenefits•  Notdelaysthroughdiscussionsonstructure•  Avoidearlystakeholderfa4gue

•  Cantake4mefor:•  Thecluster’sboundariestoemerge•  Thecluster’sLeadershipGrouptobeiden4fiedandsolidifyasateam

Step9:In‐depthanalysis,benchmarking

Factbased,outwardfocussedanalysis

•  Fundamentallyunderstandingthecluster’scompe44veposi4on,thelocalspecialisa4on

•  Frameworks:Porter’sFiveForces&Diamond•  Benchmarkingv.referenceclusters

BenchmarkingvisitsExample:Norway’sMountain

TourismclustervisittoBanff,Canada

•  Iden4fyanappropriate(model)referencecluster

•  Benchmarkingvisitsprovideacollabora4velearningopportunity•  Business+publicagencies+academicssharingtheirlearning

•  EstablishingB2Blinks•  Visitscanprovidemobilisingdatashocks



Step10:Long‐term,strategicagendaMoresubstan%ve,morestrategicini%a%ves

Movingbeyondtheini4alac4vity…the‘lowhangingfruit’e.g.•  Technology&SMErelated

•  R&Dcenters;CentersofExcellence;Incuba4onfacility•  TechnologyPark;One‐stop‐servicecentre

•  Interna4onalisa4on•  Clusterbranding;Exportdevelopment;InvestmentaRrac4on

•  Skillsdevelopment•  Ter4arycoursedevelopment;Partnershipswithlocalschools

•  Finance•  Equityanddebtfunding,venturecapital,angels,seedfunding

Developingthecluster’sStrategicAgenda

AStrategicAgendaisnotconstrainedbythecurrentavailabilityofresources

•  Ithighlightsthepriorityac4vi4es,andthenseekstofindtheresourcesforimplementa4on

Incontrast,aStrategicPlaniden4fiesthepriorityac4vi4estobeundertakenwithintheresourcesthatareavailable

Step11:LinkingtheclusterBasedonaclearunderstanding

ofthecluster’sstrengths

Threelevelsofleverage:1.  Withotherregionalclusters

•  Linkingrelatedclusters,e.g.wine&tourism•  DevelopingtheRegionalInnova%onSystem

2.  Na4onally,withclustersinthesamesector•  Developingna4onalstrategiesfromtheboRom‐up

3.  Interna4onally,withclustersinthesamesector•  Fosteringspecialisa4onbetweenclusters•  Buildingvaluechain,B2Blinks

Apor]olioofclusteringini%a%vesGävle,Sweden’sClustersuitcase

TheRegionalInnova%onSystem



LinkingregionalclustersDevelopingnewcombina%onsin

Catalonia,Spain

•  A‘KidsCluster’drawingoncompetenciesfrom3regionalclusters:•  Children’sclothing,children’spublica4onsandtoys.

•  A‘HabitatCluster’drawingon5clusters:•  Tworegionalhomefurnitureclusters,aligh4ngcluster,ataps/valvesclusterandahometex4lecluster

LinkingOntario’stopthreeICTclusters:

Linkingregionalclusters Ontario’sTechnologyCorridor

+ +

Step12:Review,evalua%on24‐36monthsalerthelaunch

1.  Thepay‐offfromtheclusteringprocess

2.  Isthecompe44vnessoftheclusterbeingupgraded?

1.Pay‐offfromtheclusteringprocess

•  ‘ReturnonInvestment’review•  Qualita4veratherthanquan4ta4ve

•  Reviewbothsuccesses&failures

•  Feedbackfromclusterstakeholders•  Value‐addedbytheclusteringini4a4ve

ReviewingtheBaselineDataAgainstagreedperformanceindicators

Whatwerethekeyperformanceindicatorsfortheclusteringini4a4ve?

•  Growthinemployment?NumberofPh.D.?

•  Growthinexports?•  Numberoffirmsinthecluster?Start‐ups?•  Increasedcompe44veness?

•  Measuredbymarketshare?Produc4vity?



2.Upgradingcompe%%veness?Harddata

•  Arethecluster’sfirmsabletoprofitablyserviceevenmoredistantcustomers?

•  Hasthecluster’smarketsharegrown?

2.Upgradingcompe%%veness?Qualita%ve

•  Clumpremoval?Closerlinksamongstfirms?–  Increasingtrust,tacitinforma4onflows?–  Out‐sourcing,sub‐contrac4ng,co‐specialisa4on?

•  CluCerremoval?Arepublicagencypriori4esstronglyinfluencedbythecluster’sagenda?

–  Universi4es,schools,training,technologyproviders,investmentaRrac4onagency,exportdevelopmentagency…

•  IstheclusterademandingcustomerforR&Dcentersanduniversi4es?

•  Anincubatorwithoutwalls?

Clusterreview:Implementa%onFromReviewtoAc%on

•  Followingreviewofprojectmilestones,budgets•  Closedownslowerini4a4ves?

•  CurrentrelevanceofthePreferredFuture?•  Opportunitytostretchfurther?

•  ArethekeySteppingStoness4llvalid?•  Havecircumstanceschangedthestrategy?

•  RevisittheLeadershipGroup’smembership?•  Extendgenepool?Bringinnextgenera4on?

ClusterworkshopsFundamentaltothecluster

developmentprocess

•  ‘Thewisdomofthecrowd’•  Consensusbuilding,transparent•  Workshopsopentoall

•  Broadagreementonpriori4es•  Notafewdecidingformany•  Capturingheartsaswellasminds

AddressingCompe%%venessThursdayalernoonbreakout

Aninterac%veworkshop

1.LarsEklund,ScandinavianCompe44venessGroup,Sweden

2.IforFfowcs‐Williams,ClusterNavigators,NewZealand



IforFfowcs‐WilliamsCEO,ClusterNavigatorsLtd22ExaminerSt,Nelson7010NewZealand

[email protected]+6435480606www.clusternavigators.com

www.linkedin.com/in/clusterdevelopmentSkype:‘clusterguy’Blog:www.e4oncompe44veness.com