RFCD 2011: Dr. Beverly Morgan: Cluster Development in the Caribbean 1


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RFCD Conference @ Arthur Lok Jack GSB - November 2011

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RFCD 2011: Dr. Beverly Morgan: Cluster Development in the Caribbean 1

  1. 1. Regional Forum on Cluster Development in the CaribbeanTheme 4 – Key Supporting Agencies The Competitiveness Company Beverley Morgan Trinidad & Tobago November 2011
  2. 2. The competitiveness companyWho are we? What do we do? Why do we do it? Whatare some of our stories?
  3. 3. Typical Cluster Initiatives Cluster ExpansionResearch & •Publish ReportsNetworking •Incubator Services •Study Cluster •Cluster Awareness •Branding Networks: •Companies •Attracting Firms •Regulation Lobbying •People •Technical Standards •Company Growth •Technical TrendsPolicyAction •Infrastructure Lobbying •Facilitate Innovativeness •Introduce New Technologies Innovation •Export Promotion •Production Processes & Technology •Business Assistance •Technology Diffusion •Market Intelligence •Technical Training •Purchase Coordination •Management Training •Increase Collaboration Commercial Education Cooperation & Training Source: Cluster Greenbook Based on 3 Survey of 500+ Clusters
  4. 4. MOBILISATION PROCESS Emails Telephone Calls Each person tellsMOBILISATIO others (Snowball) N Everyone welcome Everyone valued Open and Inclusive Process Ideas Welcome
  5. 5. Framework: Cluster Strategy Development Template1. The Cluster Strategy Development Template is a framework that provides a structured decision making methodology.2. The objective of the Template is to provide a set of concrete strategic initiatives that each cluster can pursue to attain the results they seek. In that sense it serves as a Roadmap for the cluster.3. The strategic initiatives contained in each Template form the Work Plan for the cluster throughout the duration of the project. The strategic initiatives stem from the cluster workshops and are based on the ideas and insights of the participating firms.4. The clusters own the document. Source: ontheFrontier
  6. 6. Framework: Cluster Strategy Development Template Cluster Workshops Cluster Diagnostic Strategy Development Template Review and Research Firm-Level Consultations The Cluster Strategy Development Template is the top-line repository of efforts . It is a comprehensive document reflecting the ideas and insight of all stakeholders. Source: ontheFrontier
  7. 7. The 5-Step Cluster Process– Competitiveness in Action– Step 1—Analyse Current Situation– Step 2—Set Industry Objectives– Step 3—Understand Customer Needs– Step 4—Articulate Competitive Positioning– Step 5—Develop Action Guidelines– Next Steps
  8. 8. Migrating Towards a Strategy Based Model Strategy, Operations and AssetsAsset-Based Approach Assets Operations Strategic Objectives  Compete on the  Create basic products  Look for high volume basis of one’s and wait for and low price natural conditions customers to come  Exploit Comparative AdvantageStrategy Based Approach Strategic Objectives Assets Operations  Focus on satisfying the  Acquire assets that  Set clear targets and needs of demanding deliver complex adopt sophisticated but well selected and products that meet configuration to meet high paying customers the needs of target them  Build Competitive customers – Strong-inter Advantage – Knowledge and company and public- research private sector – Technology and cooperation know how  Improve productivity
  9. 9. Strategy IS choice Cascading Choices What are our goals and aspirations? Where will we play? How will we win in chosen markets? What capabilities must be in place to win? What management systems are required?Source: Roger Martin
  10. 10. Cluster Participants Learn and Practise Structured Approaches RESEARCH GUIDE Situation Analysis Market Size & Demand Distribution Chain Standards & Regulations Production Volumes Logistics Quality Requirements ProfitabilityData Gathering Cluster Maps Customer Surveys Competitive Positioning
  11. 11. Clusters ImplementedBy The Competitiveness Company (2002 – 2011)1. Agribusiness: Sauces & Spices2. Tourism Unique Jamaica & MyJamaica3. Entertainment: Jamaica Signature Beats4. West Indies Sea Island Cotton5. Ornamental Fish6. Agro-Processing (In St. Vincent & the Grenadines)
  12. 12. The Issue of Public Goods• Public Goods created as result of cluster development (mainly informational goods)• Free Rider Problems – Puts Trust at Risk• Project must anticipate free rider problems• Value of IP generated needs to be recognised & protected• Appropriate systems, contracts, agreements, conversation s should be in place• Need for effective safeguards
  13. 13. The Free Rider Problem: Who, if anyone, owns what?
  14. 14. Role of Intellectual Property: What do Clusters Produce?• INFORMATIONAL GOODS AND KNOWLEDGE Names as Identity Shared Vision Strategies Identification of and Access to New Markets Identification of New Niches Plans Brands New Products Shared firm-level information
  15. 15. BRANDDEVELOPMENTHavingdetermined anidentityDeveloped aplanDesigned astrategyThe ingredientsare in place todevelop a brandWho owns it?
  16. 16. Why Trust MattersTrust: Trusting societies :o Linked to higher o Incentives to innovate economic performance o Accumulate physical capitalo Lower transaction costs o Have higher returns to human capital.o More trustworthy o Trust and civic involvement government linked to better performance ofo Higher levels of investment government institutions. o Individuals in socialo Intentional acceptance of dilemmas invest resources vulnerability based on to improve joint outcomes. positive expectations of o Cooperation levels higher others’ intentions (Ostrom than predicted. 2003) o Important to encourage people to invest themselveso Social connections lead in groups. persons to trust that others o To extent that identities will be motivated to act intertwined with benevolently. (Tyler, 2001) group, ‘social capital’ created, facilitating functioning of the social group.
  17. 17. ROLE OF TRUSTConfucius said to his disciple Lao Tzu:“Three things are needed for good government.They are the sword, food and trust.If a ruler must give up one, let him give up the sword.And if something else, let him give up the food.Trust should be guarded to the end.”