By Marc Papell, presented at the 17th TCI Global Conference, Monterrey 2014.

1. Differences between cluster initiatives in America and
the rest of the world. 4 basics & 4 lessons learned
Marc Papell
Parallel 2.2 Cluster implementation in different parts of the world
11 November 2014

2. DIFFERENCES BETWEEN CLUSTER INITIATIVES
IN AMERICA AND THE REST OF THE WORLD
4 BASICS & 4 LESSONS LEARNED
MARC PAPELL
mpapell@cluster-development.com
CAROLINA GUERRERO
cguerrero@cluster-development.com

3. www.cluster-development.com
THE OBJECTIVE OF A CLUSTER INIATIVE (C.I.) IS ALWAYS THE SAME
“CREATE EXTRAORDINARY VALUE”
COCOA PRODUCERS
EXPORT OF CLINICAL
COMPETITIVENESS
NO MATTER THE BUSINESS! SERVICES
(IF IT IS A BUSINESS)
YOU CAN ALWAYS DEVELOP STRATEGIES TO
HELP BUSINESS GROW, TO INCREASE THEIR
PROFIT & GUARANTEE LONG TERM
SUISTAINABILITY
1

4. ¿WHAT www.cluster-development.DOES com
“CREATE EXTRAORDINARY VALUE” MEANS?
USD 109.3
billion
USD 86.6
billion
¿HOW DO WE GRAB A BIGGER PART OF
THIS CHOCOLATE CAKE?
EXAMPLE : COCOA PRODUCERS NORTH ANTIOQUIA (COLOMBIA)
POST CONFLICT TERRITORY
USD 109.3
billion
USD 5.9 billion

5. www.Cclu.sIte.r’-sdevFelOopmCeUnt.cSoEmS ON BUILDING STRATEGIES TO ACCESS HIGHER VALUE
MARKETS AS THE FIRST STEP TO GENERATE CHANGES IN ECONOMIC REALITIES
CHOCOLATE MASTERS INDUSTTRY
BEAN TO BAR INTEGRATORS
“QUALITY” DIFFERENTIATED INDUSTRY
(ORGANIC, FAIR TRADE, …)
COMMODITY
Grano
VALUE = x6
SAME VOLUME
TRANSFORMACIÓN
Productos Intermedios
NICHE MARKETS WITH VOLUME & VALUE
$24.000/KG MAX. PRICE
TONS: 10.000
ESPECIALIZED INDUSTRIAL MARKET (VOLUME)
PLUS ON PRICE: $250/kilo
PLUS ORGANIC: $250 - $750/kilo
TONS: 80.000
TRADITIONAL LOCAL MARKET
$4.600 LOCAL COMMODITY PRICE
2
WITHOUT BULDING STRATEGIES TO ACESS HIGHER VALUE
MARKETS WE’RE RETURNING TO THE STARTING POINT

6. 3 www.C.cluster-I.’s development.FOCUSES com
ON CREATING VALUE IN THE ENTIRE VALUE CHAIN AND CONNECTING
THIS VALUE FROM THE BEGGINING TILL THE END (MULTIPLIER EFFECT)
COMPETITIVENESS
HOW THE INSTITUTIONS
UNDERSTAND THE MARKET
CHALLENGES AND PLUG&PLAY
THEIR POLICIES/PROGRAMS
HOW FIRMS UNDERSTAND THE
BUSINESS CHALLENGES AND
IMPLEMENT THE STRATEGIES
HOW ALL PARTS OF ECOSYSTEM
UNDERSTAND THEIR ROLES &
RESPONSABILITIES
EXTRAORDINARY VALUE = SUM OF THE GENERATED VALUE IN EACH PART
OF THE VALUE CHAIN AND HOW THIS VALUE IS “CONNECTED” AND
“TRANSMITTED” TO ALL THE ACTORS IN THE BUSINESS

7. www.cluster-development.com
C.I.s WITHOUT BUSINESS LEADERSHIP AND GOVERNANCE TO IMPLEMENT
“PROJECTS” LINKED WITH INSTITUTIONALITY WILL NEVER CHANGE REALITY 4
1. STRATEGIC AGENDA FOR THE FUTURE PROJECTS
 Concrete actions and projects that will impact in firms P&L
 Definition of roles and responsibilities for the implementation of the projects
2. FIRMS LEADERSHIP + INSTITUTIONS LEADERSHIP
 Active participation, not only in the cluster initiative but also on projects and actions
implementation
 Development of roles and responsibilities
3. GOVERNANCE OF THE CLUSTER INITIATIVE FOR THE
IMPLEMENTATION
 Long term horizons (10 years) to change realities
 Modelling long term governance with clear “playing rules” with firms & institutions

8. www.cluster-development.com
VALUE CREATION, FUTURE STRATEGIES, AGENDA OF
PROJECTS & FIRMS & INSTITUTIONALITY LEADERSHIP ARE
THE BASICS…
¿BUT CAN WE HAVE THE SAME
IMPLEMENTATION FOR ALL CLUSTER
INITIATIVES?
…IN AMERICA AS IN OTHER PARTS OF THE WORLD
YOU CAN FIND DIFFERENT REALITIES THAT IMPLIES
DIFFERENT APPROACHES OF IMPLEMENTATION…

9. www.cluster-development.com
TO CHANGE REALITIES, C.I.’s MUST IMPLEMENT DIFFERENT APROACHES
DEPENDING ON MATURITY OF INSTITUTIONS AND BUSINESS STRUCTURES 5
SUISTANABLE & COMPETITIVE
TERRITORIES
• BUSINESS ENVIRONMENT
• MATURE INSTITUTIONS WITH
DEVELOPED CAPABILITIES
UNDEVELOPED TERRITORIES OR
POSTCONFLICT TERRITORIES
• POOR BUSINESS STRUCTURE BASED ON
FAMILY PRODUCTION UNITS
• POOR OR LACK OF INSTITUTIONS
COCOA, COFFE, TOURISM, EXOTIC
FRUITS, SHEEP/GOAT, …
- CAPACITY OF THE TERRITORIES TO CAPITALIZE THE VALUE OPPORTUNITY +
+
OPPORTUNITY TO CREATE EXTRAORDINARY
VALUE FROM HIGHER VALUE MARKETS
-
Examples: SUCRE, GUAJIRA, ITUANGO,
MAGDALENA MEDIO, URABÁ…
Examples: VALLE DE ABURRA -
MEDELLIN
EXAMPLES IN COLOMBIA
ENERGY, CLINICAL SERVICES,
INFRAESTRUCTURE SOLUTIONS
TWO REALITIES WITH BIG DIFFERENCES IN CAPABILITIES TO DEVELOP
“THE VALUE OPPORTUNITY”

10. www.cluster-development.com
TO CHANGE REALITIES, C.I.’s MUST IMPLEMENT DIFFERENT APROACHES
DEPENDING ON MATURITY OF INSTITUTIONS AND BUSINESS STRUCTURES 5
SUISTANABLE & COMPETITIVE
TERRITORIES
UNDEVELOPED TERRITORIES OR
POSTCONFLICT TERRITORIES
TERRITORIES TO DIVERSIFY
•BUILD CAPABILITIES IN LOCAL
INSTITUTIONS (MARKET VISION &
PROJECT DEVELOPMENT)
•INCREASE THE LEVELS OF
BUSINESS INTEGRATION TO
ACCESS MARKETS (ASOC.,
COOP’S,..)
•WORK ON CULTURAL CHANGE
(FROM FARMERS TO BUSINESSES)
FOCUS ON
- CAPACITY IN TERRITORIES TO CAPITALIZE THE VALUE OPPORTUNITY +
+
EXAMPLES IN COLOMBIA
•ENCOURAGE HIGH PERFORMANCE
INSTITUTIONS CONNECTED WITH
MARKET CHALLENGES
(PLUG&PLAY)
•DEFINE HIGH VALUE LONG TERM
STRATEGIES
•WORK ON CHANGE MANAGEMENT
FOR HIGHER PERFORMANCE
BUSINESSES
OPPORTUNITY TO CREATE EXTRAORDINARY
VALUE FROM HIGHER VALUE MARKETS
-

11. 6 www.cluster-C.I.’development.s MUST com
FOCUS ON “MARKET CONNECTIONS” DEVELOPING HIGHER
LEVELS OF BUSINESS INTEGRATION TO ACCESS HIGHER VALUE MARKETS
DOESN’T VALUED BY
LOCAL MARKETS
SUBSISTENCE
HIGHER VALUE
MARKETS
Associations
¿HOW WE CONNECT THE BASE OF THE
PYRAMID WITH THE VALUE MARKETS?
UNDEVELOPED
TERRITORIES OR
POSTCONFLICT
TERRITORIES

12. 7 www.cluster-C.I.’development.s DON’T com
RESPOND TO HYPERSUBSIDIZE OR S.C.R. PROJECTS BUT TO DEMAND
DRIVEN PROJECTS TO CAPITALIZE A LONG TERM SUSTAINABLE VALUE CHAIN
COCOA ASOCIATIONS’ ACTIVITY LEVEL IN
“ANTIOQUIA” FOR THE LAST 10 YEARS
HYPERSUBSIDIZED
DEVELOPMENT
COCOA’S CLUSTER INITIATIVE
FOCUSED ON:
• MARKET PERSPECTIVE AND KEY
BUSINESS INTEGRATION WITH A
VALUE PROPOSITION FOR
FARMERS
• COCOA’S CLASSIFICATION NOT BY
• DEMAND DRIVEN ACTIONS AND
12
2004
2010
2011
2012
SOCIAL FOCUSSED PROJECTS
(FUPAD, US AID, UN, ACNUR..)
PRODUCTION REACTIVATION
FOCUSSED ON SOCIAL ISSUES
AND INCREASING PRODUCTION
FOCUSSED ON LOCAL
PRODUCTION SUSTAINABILITY
SUCCESS FACTORS ON HIGHER
VALUE MARKETS
• INCREASE THE LEVEL OF
QUANTITY BUT QUALITY
PROJECTS WITH INSTITUTIONS
(EXPORT DEVELOPMENT)
FOCUSSED ON DEVELOPING
HIGHER VALUE MARKETS
CORPORATE SOCIAL RESPONS.
& LOCAL MARKET VISION
DEMAND DRIVEN PROJECTS TO
ACCESS INTERNATIONAL MARKETS
2007
2024
2014
2013
40% PROD.
DECREASE

13. www.cluster-development.com
SO, ¿WHICH ARE THE KEYS OF SUCCES IN
IMPLEMENTATION?

14. www.cluster-development.com
THE “4 BASICS” THAT DOESN’T CHANGE
(1)VALUE CREATION
(2) FUTURE STRATEGIES
(3) AGENDA OF CONCRETE PROJECTS
(4) FIRMS & INSTITUTIONALITY LEADERSHIP

15. THE www.cluster-4 development.LESSONS com
LEARNED IN AMERICA
DIFFERENCES IN
IMPLEMENTATION
DEPEND ON THE
DEVELOPED
CAPABILITIES IN
EACH “TERRITORY”
C.I.s MUST IMPLEMENT DIFFERENT APROACHES DEPENDING
ON MATURITY OF INSTITUTIONS AND BUSINESS STRUCTURES
IN “TERRITORIES” TO CHANGE REALITIES
CLUSTER INITIATIVES IN TERRITORIES WITH LOW CAPABILITIES
MUST FOCUS ON “MARKET CONNECTIONS” DEVELOPING
HIGHER LEVELS OF BUSINESS INTEGRATION TO ACCESS
HIGHER VALUE MARKETS
MUST FOCUS ON DEVELOP CAPABILITIES IN EXISTING LOCAL
INSTITUTIONS & ATTRACT NEW INSTITUTIONS TO THE REGION
TO COMPLEMENT THEM
MUST GENERATE DEMAND DRIVEN PROJECTS FOCUSSED ON
HIGHER VALUE MARKETS AND THE BUILD OF LOCAL
CAPABILITIES TO DECREASE HYPERSUBSIDIZE REALITIES