Draft Kenyan Policy On Clusters
presented at
The Conference on Cluster initiatives
for Enhanced Competitiveness
Redcourt H...
Concept of Clusters
The concept of clusters has in recent years gained
enormous popularity to the extent that
policy-maker...
Concept of Clusters
 Conceptually, industry clusters have driven the economic
development policy in many parts of the wor...
Definition: What is a cluster
Definitions as to what
exactly constitutes a cluster
vary. However, the concept
of ‘cluster’...
Kalundborg eco-industrial park
Wednesday,
July 9, 2014
KV2030 Manufacturing
Sector Delivery Secretariat
5
A cluster of friends on Facebook
Wednesday,
July 9, 2014
KV2030 Manufacturing
Sector Delivery Secretariat
6
Cluster Policy?
Potential benefits from cluster initiatives do not in
themselves suffice as rationale for policy interven...
Cluster policy?
The presence of potential benefits from cluster
initiatives does not in itself suffice as rationale or
ju...
Objectives of the Cluster policy in Kenya
On the role of policy in cluster development, various
notions abound in the lite...
Objectives of a
Cluster Policy in
Kenya
1. Spur workforce
development through
creativity, innovations,
Knowledge and skill...
SITUATION ANALYSIS
There are four types of cluster and network
programmes in the different regions and countries.
These va...
SITUATION ANALYSIS
In Kenya, The National Economic and Social Council
(NESC) in 2009 recommended the adoption of a cluste...
20 SELECTED PRIORITY CLUSTERS
• 1. Cotton - Makueni
• 2. Cotton - Mombasa
• 3. Dairy – Nakuru
• 4. Dairy – Uasin-Gishu
• 5...
Status of Implementation of the Cluster
Participatory Action Plans in Kenya
Cluster study tour of Rotterdam port cluster, ...
Status of Implementation of the Cluster
Participatory Action Plans in Kenya
The Ministry of Industrialization has spearhea...
Garissa Beef Cluster Cluster Workshop
Wednesday, July 9, 2014
KV2030 Manufacturing Sector Delivery
Secretariat
16
From left to right: Mr. Gerald Snel CEO, Port of
Rotterdam with participants from Kenya
Rotterdam Port Cluster
Wednesday, ...
Food Valley Netherlands
Wednesday, July 9, 2014
KV2030 Manufacturing Sector Delivery
Secretariat
18
Food Valley Cluster Netherland/ www.freshparkVenlo.nl
Wednesday, July 9, 2014
KV2030 Manufacturing Sector Delivery
Secreta...
Clusters in the Vision 2030
Excerpts From: Kenya Vision 2030 Book pg. 74
Development of industrial and manufacturing
zone...
Wednesday, July 9, 2014
KV2030 Manufacturing Sector Delivery
Secretariat
21
Vision 2030 Clusters
• Special Economic Cluster for agro-processing
• Special Economic Cluster for agricultural input
prod...
Cluster Infrastructure in Kenya
NESC directed that the Ministries of Trade and
Industrialization to spearhead the develop...
JUSTIFICATION FOR A CLUSTER POLICY
Clusters are seen as important drivers of
competitiveness and innovation. Kenya recogn...
JUSTIFICATION FOR A CLUSTER POLICY
Given the presence of multiple imperfections in
markets and prevailing institutions wi...
JUSTIFICATION FOR A CLUSTER POLICY
By looking at an economy through the lens of various
regional(County) production and i...
JUSTIFICATION FOR A CLUSTER POLICY
Today, with the Internet and a click of the mouse
button, companies can source for goo...
Peaks in the Delta
In Netherlands, Regional
Authorities have been
established to lead National
Coordination in clusters. T...
CHALLENGES
• Capacity building (training of cluster facilitators and promoters)
• Inadequate funding
• Private sector part...
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Draft kenyan policy on clusters

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  • Draft kenyan policy on clusters

    1. 1. Draft Kenyan Policy On Clusters presented at The Conference on Cluster initiatives for Enhanced Competitiveness Redcourt Hotel, Nairobi June 28th 2012 Victor Mageto Ministry of Industrialization Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 1
    2. 2. Concept of Clusters The concept of clusters has in recent years gained enormous popularity to the extent that policy-makers, practitioners and academics alike are increasingly referring to it. However, many different cluster definitions exist and the economic impact of clusters on competitiveness and innovation is far from being clear. Clusters are becoming an increasingly popular concept which is reflected in a growing number of policies and initiatives in support of clusters. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 2
    3. 3. Concept of Clusters  Conceptually, industry clusters have driven the economic development policy in many parts of the world. It is now a universally accepted fact that successful regional economies are, to varying degrees, specialized.  Clusters can indeed therefore be viewed as key drivers of competitiveness and innovation and thus of growth and jobs. Evidence from around the world shows that clusters are significantly related to prosperity and that enterprises benefit from clusters.  Whereas clusters are a real economic phenomenon that can be economically measured, cluster policies are more an expression of political commitment to support existing clusters or the emergence of new clusters. Cluster initiatives are practical actions to strengthen cluster development, which can, but must not necessarily be, based on a formulated cluster policy. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 3
    4. 4. Definition: What is a cluster Definitions as to what exactly constitutes a cluster vary. However, the concept of ‘cluster’ generally refers to a geographical concentration of vertically or horizontally linked firms engaged in related lines of business together with supporting organizations such as banks, suppliers, Business member organizations e.t.c. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 4
    5. 5. Kalundborg eco-industrial park Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 5
    6. 6. A cluster of friends on Facebook Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 6
    7. 7. Cluster Policy? Potential benefits from cluster initiatives do not in themselves suffice as rationale for policy intervention in clustering processes. Individual firms and organizations are the prime actors in cluster processes, and cluster policy is about consistently paving the way for conditions that are conducive to people’s engagement in joint efforts, and the realization of mutual benefits. Yet, government policy impacts on the preconditions for clustering under all circumstances, whether willingly or un-willingly. The understanding and attitudes of policymakers thus matter greatly for what can be achieved through cluster initiatives and cluster actions. (Cluster Policies White book) Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 7
    8. 8. Cluster policy? The presence of potential benefits from cluster initiatives does not in itself suffice as rationale or justification for policymakers to interfere. The key question is whether and how policymakers can add value through appropriate measures, beyond the outcomes that markets and market actors produce on their own. E.g. is their evidence that issues analyzed should be addressed by policy intervention that Without it the clusters will not develop. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 8
    9. 9. Objectives of the Cluster policy in Kenya On the role of policy in cluster development, various notions abound in the literature. One commonly stated view is that public authorities should refrain from creating clusters. Attitudes are generally more favorable with regard to instruments for supporting existing or emerging clusters and, indeed, a number of governments around the world - irrespective of ideology - apply cluster policy with focus on the latter. Likewise, many clusters have gone through initial stages of mostly spontaneously generated clustering followed by a stronger element of conscious policy-support. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 9
    10. 10. Objectives of a Cluster Policy in Kenya 1. Spur workforce development through creativity, innovations, Knowledge and skills transfer 2. Facilitate increase of exports 3. Improve national and regional productivity and competitiveness 4. Improve market driven research and networking 5. Create comparative and competitive advantage through collapetion and cooptetionWednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 10
    11. 11. SITUATION ANALYSIS There are four types of cluster and network programmes in the different regions and countries. These variations can be summarized into four main categories or types of programmes: • Regional economic development programmes • Programmes for the development of national industries, • Research and development based cluster programmes • Network programmes that support the development of new clusters Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 11
    12. 12. SITUATION ANALYSIS In Kenya, The National Economic and Social Council (NESC) in 2009 recommended the adoption of a cluster development strategy as part of regional and national competitiveness strategies. KIPPRA was commissioned and conducted a study on clusters (Cluster Mapping) with technical backstopping of ECORYS Netherlands. The overall objective of the study was to come up with practical solutions to the challenges Kenya faces with respect to productivity & competitiveness in the mapped clusters and then to draft Participatory Action Plans that provide blueprints for development. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 12
    13. 13. 20 SELECTED PRIORITY CLUSTERS • 1. Cotton - Makueni • 2. Cotton - Mombasa • 3. Dairy – Nakuru • 4. Dairy – Uasin-Gishu • 5. Energy – Olkaria • 6. Horticulture – Mombasa • 7. Horticulture – Naivasha • 8. ICT – Nairobi • 9. Livestock – Garissa • 10. Livestock – Kajiado • 11. Maize – Kitale • 12. Marine & fisheries – Kisumu • 13. Marine & fisheries – Malindi • 14. Transport & logistics - Mombasa • 15. Sugar – Nyando • 16. Sugar – Western • 17. Tea – Kericho • 18. Tea – Mombasa • 19. Tourism – Mombasa • 20. Tourism – Nairobi SIX PARTICIPATORY ACTION PLANS DEVELOPED 1. ICT Cluster: Participatory Action Plan 2. Kisumu Inland Fisheries Cluster Participatory Action Plan 3. Garissa Beef Cluster: Draft Participatory Action Plan 4. Cut-Flower Cluster Draft Participatory Action Plan 5. Coastal Beach Tourism Cluster Draft Participatory Action Plan 6. Transport and Logistics Cluster Draft Participatory Action Plan Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 13
    14. 14. Status of Implementation of the Cluster Participatory Action Plans in Kenya Cluster study tour of Rotterdam port cluster, food valley, Venlo logistics clusters undertaken in the Netherlands June 2010 • National study tours – one to Nyanza, Western and North Rift; the other to Coastal Kenya December 2009 • 3 Clusters mainstreamed and budget provided by government 2010/2011, 2011/2013 and continuing • Other clusters taken up by NESC and supported for mainstreaming in relevant Ministries • Cluster development Google group formed • Cluster Online Newsletter developed • Cluster policy as work in progress Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 14
    15. 15. Status of Implementation of the Cluster Participatory Action Plans in Kenya The Ministry of Industrialization has spearheaded the development of; Inland Fisheries Cluster in Kisumu 30 Cluster Facilitators trained Cluster Officials Elected  Garissa Beef Cluster in Garissa 30 Cluster Facilitators trained Cluster Officials Elected Cashew Nut Agro-processing Cluster in Mombasa Work in Progress Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 15
    16. 16. Garissa Beef Cluster Cluster Workshop Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 16
    17. 17. From left to right: Mr. Gerald Snel CEO, Port of Rotterdam with participants from Kenya Rotterdam Port Cluster Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 17
    18. 18. Food Valley Netherlands Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 18
    19. 19. Food Valley Cluster Netherland/ www.freshparkVenlo.nl Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 19
    20. 20. Clusters in the Vision 2030 Excerpts From: Kenya Vision 2030 Book pg. 74 Development of industrial and manufacturing zones: Different regions of the country are suitable for different types of industrial and manufacturing activities. In order to harness the resources available in different parts of the country, region-specific industrial and manufacturing clusters will be promoted. Necessary infrastructure and services will be provided to stimulate the development of these clusters (Figure 3.5.5). Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 20
    21. 21. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 21
    22. 22. Vision 2030 Clusters • Special Economic Cluster for agro-processing • Special Economic Cluster for agricultural input production with research park • New horticulture Cluster • Special Economic Cluster for packaging this cluster will include packaging tea and coffee for global markets • Fruit juice Cluster • Vegetables Cluster • Fish processing Cluster Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 22
    23. 23. Cluster Infrastructure in Kenya NESC directed that the Ministries of Trade and Industrialization to spearhead the development of a cluster policy. Since clusters are cross-cutting among different ministries, an inter-ministerial committee comprising of Ministry of Trade, Ministry of Industrialization, NESC, KEPSA and KIPPRA was constituted. The Ministry of Trade in collaboration with various stakeholders therefore is set to develop cluster policy. The overarching goal of the cluster policy is to enhance productivity and competitiveness of various sectors of the economy. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 23
    24. 24. JUSTIFICATION FOR A CLUSTER POLICY Clusters are seen as important drivers of competitiveness and innovation. Kenya recognizes that competitiveness and productivity improvements are the twin drivers of rapid economic growth and transformation. However, Kenya still ranks low in global competitiveness. For example, the Global Competitiveness Report 2010- 2011 ranked 106th Kenya as behind important emerging economies such as Egypt (ranked 81), India (ranked 49) , South Africa (ranked 45) and Thailand (ranked 36). Thus, relative to these countries Kenya has weak institutions, infrastructure, and market efficiencies, among other problems. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 24
    25. 25. JUSTIFICATION FOR A CLUSTER POLICY Given the presence of multiple imperfections in markets and prevailing institutions with multiple actor in a cluster, there is a potential for policymaking to generate benefits, both by accelerating the growth of existing clusters and by creating conditions that are favorable for the formation of new clusters as well as the recognizing and re-engineering of forgotten clusters. (Daily cluster in North Rift, Meat cluster in Dagoreti and Egg Cluster in Thika) One of the strongest arguments for focusing on clusters is that it helps governments better understand how their economies really work. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 25
    26. 26. JUSTIFICATION FOR A CLUSTER POLICY By looking at an economy through the lens of various regional(County) production and innovation systems, regions can more accurately identify market imperfections, find pressure points, and detect systemic failures. Only then can they determine which interventions are likely to have the greatest impacts. Most challenges and opportunities are based on circumstances that vary from market to market and product to product (Rosenfield, 2002). Cluster policy also provides a framework for dialogue and cooperation between firms, the public sector and non governmental organizations. Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 26
    27. 27. JUSTIFICATION FOR A CLUSTER POLICY Today, with the Internet and a click of the mouse button, companies can source for goods, capital and technology globally. Technology has set a new frontier to the conventional wisdom about how companies and nations compete. With more open global market, easy access to information and faster transportation, the role of location in competition might be said to have diminished! But if location does not matter, why is today’s economic map of the world is still being dominated by growing clusters of economic activities? Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 27
    28. 28. Peaks in the Delta In Netherlands, Regional Authorities have been established to lead National Coordination in clusters. There are six different regions and each focuses on region specific potentials. Important Instruments in the success of the authorities 1. Campus development 2. Business sites 3. Quality of life 4. Accessibility issues Financial • Subsidy schemes • Investment funds Valorization • Commercial exploitation of knowledge • Market introduction on short term Organizing capacity • Regional network synergies • Collocation Physical preconditions Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 28
    29. 29. CHALLENGES • Capacity building (training of cluster facilitators and promoters) • Inadequate funding • Private sector participation in the whole implementation program is still poor • The Secretariat? is not fully facilitated. • Carry out in-depth cluster studies • Encourage backstopping support particularly from institutions of higher learning • Mainstream clusters in relevant Ministries work plans and performance contracts • Engage development partners to provide funding for the cluster activities • Create inter-ministerial committee to continue implementing and monitoring pilot cluster Participatory Action Plans. • PACF – Kenya Chapter • Carry out a registration and launching exercise for readily formed clusters • Address emerging issues (Environmental, social and climate changes) Wednesday, July 9, 2014 KV2030 Manufacturing Sector Delivery Secretariat 29
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