Cluster basics: Managing a Multi-Cluster Programme
DEPARTMENT OF ECONOMIC DEVELOPMENTAND TOURISM: WESTERN CAPE PROVINCIALGOVERNMENTManaging a MultiManaging a Multi--Cluster ProgrammeCluster ProgrammeISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO 1TCI ConferenceCape Town October 2008Presented by: Nigel Gwynne-Evans
History of Cluster Programme in theWestern CapeDepartment involved in facilitating DTI’s clusterroadshows in 1996/97First cluster launched in 1998 (Cape IT Initiative)Steady progress to 2003 (6 initiatives launched)Major funding boost and recognition throughISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHOMajor funding boost and recognition throughprovincial government iKapa Elihlumayo “Growing theCape” Programme – 5 new sectors launched early2004.Micro-Economic Development Strategy – 200416 Cluster Initiatives 20082
CCDI(Craft) InstituteSAAqua-cultureInstituteSAOGA(Oil and Gassupply)WC ToolingInitiativeSA Wine andBrandy TrustSA Wine andBrandy Trust( ew materials)CIMM( ew materials)ElectronicsClotexCape ITInitiativeCalling theCapeProf. Bus.ServicesEstablished ClustersEmerging ClustersCape FilmcomponantsAuto-componantsCTRUClusters with potentialWestern Cape - Industry Cluster PortfolioISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHOCape ClothingCape ClothingClusterVisual Artsetwork(Boatbuilding)CTBi(Boatbuilding)Clotex(CMT’s)FoodProcessingCape FurnitureCape FurnitureInitiativeEnvironmentalGoods & ServicesEnvironmentalGoods & ServicesCommissionCape FilmCommissionPerforming ArtsPerforming ArtsetworkCape bio techCape bio-techTrustCTRUTourismClusters with potentialCape MusicCouncilFashion CouncilCape TownFashion Council
Nature of WC Sector InitiativesAverage 4/5 up to 12 employees.Not-for profit companiesPublic/ private sector fundedOpen membershipRepresentative boards (majority industry + reps fromISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHORepresentative boards (majority industry + reps fromacademic & research institutions / government).CEO’s – industry specialists
Role of Cluster InitiativesUnderstand dynamics withinthe ClusterDevelop rich networks acrossthe sectorISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHOProvide the “CommunicationSpace” for players - TRUSTDevelop and manage projectsto grow the sectorOil and not the engine
Role of provincial Government (1)Understand process ofclusteringDevelop deep understandingof key sectors and dynamicsISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHOSupport/ incubate newinitiativesOngoing guidance and supportthrough governance structuresFund with distinction betweenoperational and project costs
Role of provincial Government (2)Develop best-practice aroundpotential interventionsMonitor and evaluateperformanceISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHOCo-ordinate ServicesProvide Link between regionaland central governmentProvide Vision andLeadership
Lessons – Role of National GovRecognition of role of regionalgovs in driving clusteringEmpower Regional Gov’s todevelop capacityISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHOProvide central fundingProgrammes for new clustersProvide project specificsupportCo-ordination amongstregional cluster Initiatives
Key Challenges – EmergingProgrammeBuilding Sectoral Capability within gov.Understanding local economyWhere to start – priority or dynamic clusters?Ringfencing Programmatic allocationsISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHODefining Outcomes – Gov. KPI’sLong term nature of CI’s
Key Challenges – Mature ProgrammeSECTORAL FOCUS – is there an optimal number –6, 10, 15, 20?Bureaucratic Creep – Justified?Corporate Governance within CI’s – A double-edgedswordISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHODealing with poorly performing initiativesDealing with political changeLT nature of clustering
Policy ImplicationsBuilding sectoral capacity within government key.Work with what exists – difficult to create industry from scratch /private sector not energisedClear differentiation between annual operational costs andprojects.Self-sustainability unlikely – most will remain dependent on someform of gov. support.ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHOform of gov. support.Initial funding requirement to launch regional cluster programmedoes not need to be excessive: (+- R5m per year to initiateprocess).
To conclude:From the Western Cape experience developing abroad-based cluster programme has provided aISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHObroad-based cluster programme has provided asolid platform for a regional government to buildinstitutional “thickness” in targeted sectors, and isthe key vehicle to encourage industrialrestructuring.