This document discusses the Western Cape Provincial Government's cluster program for economic development. It provides a history of the program since 1998 and outlines the current portfolio of 16 industry clusters. It then describes the nature of the cluster initiatives, the roles of the provincial government and lessons for the national government. Finally, it discusses key challenges for emerging and mature cluster programs and concludes that the Western Cape's broad-based cluster program has provided a platform to build industry networks and encourage economic restructuring.

1. DEPARTMENT OF ECONOMIC DEVELOPMENT
AND TOURISM: WESTERN CAPE PROVINCIAL
GOVERNMENT
Managing a MultiManaging a Multi--Cluster ProgrammeCluster Programme
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO 1
TCI Conference
Cape Town October 2008
Presented by: Nigel Gwynne-Evans

2. History of Cluster Programme in the
Western Cape
Department involved in facilitating DTI’s cluster
roadshows in 1996/97
First cluster launched in 1998 (Cape IT Initiative)
Steady progress to 2003 (6 initiatives launched)
Major funding boost and recognition through
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Major funding boost and recognition through
provincial government iKapa Elihlumayo “Growing the
Cape” Programme – 5 new sectors launched early
2004.
Micro-Economic Development Strategy – 2004
16 Cluster Initiatives 2008
2

3. CCDI
(Craft) Institute
SA
Aqua-culture
Institute
SAOGA
(Oil and Gas
supply)
WC Tooling
Initiative
SA Wine and
Brandy Trust
SA Wine and
Brandy Trust( ew materials)
CIMM
( ew materials)
Electronics
Clotex
Cape IT
Initiative
Calling the
Cape
Prof. Bus.
Services
Established Clusters
Emerging Clusters
Cape Film
componants
Auto-
componants
CTRU
Clusters with potential
Western Cape - Industry Cluster Portfolio
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Cape ClothingCape Clothing
Cluster
Visual Arts
etwork
(Boatbuilding)
CTBi
(Boatbuilding)
Clotex
(CMT’s)
Food
Processing
Cape FurnitureCape Furniture
Initiative
Environmental
Goods & Services
Environmental
Goods & Services
Commission
Cape Film
Commission
Performing ArtsPerforming Arts
etwork
Cape bio techCape bio-tech
Trust
CTRU
Tourism
Clusters with potential
Cape Music
Council
Fashion Council
Cape Town
Fashion Council

4. Nature of WC Sector Initiatives
Average 4/5 up to 12 employees.
Not-for profit companies
Public/ private sector funded
Open membership
Representative boards (majority industry + reps from
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Representative boards (majority industry + reps from
academic & research institutions / government).
CEO’s – industry specialists

5. Role of Cluster Initiatives
Understand dynamics within
the Cluster
Develop rich networks across
the sector
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Provide the “Communication
Space” for players - TRUST
Develop and manage projects
to grow the sector
Oil and not the engine

6. Role of provincial Government (1)
Understand process of
clustering
Develop deep understanding
of key sectors and dynamics
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Support/ incubate new
initiatives
Ongoing guidance and support
through governance structures
Fund with distinction between
operational and project costs

7. Role of provincial Government (2)
Develop best-practice around
potential interventions
Monitor and evaluate
performance
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Co-ordinate Services
Provide Link between regional
and central government
Provide Vision and
Leadership

8. Lessons – Role of National Gov
Recognition of role of regional
govs in driving clustering
Empower Regional Gov’s to
develop capacity
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Provide central funding
Programmes for new clusters
Provide project specific
support
Co-ordination amongst
regional cluster Initiatives

9. Key Challenges – Emerging
Programme
Building Sectoral Capability within gov.
Understanding local economy
Where to start – priority or dynamic clusters?
Ringfencing Programmatic allocations
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Defining Outcomes – Gov. KPI’s
Long term nature of CI’s

10. Key Challenges – Mature Programme
SECTORAL FOCUS – is there an optimal number –
6, 10, 15, 20?
Bureaucratic Creep – Justified?
Corporate Governance within CI’s – A double-edged
sword
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Dealing with poorly performing initiatives
Dealing with political change
LT nature of clustering

11. Policy Implications
Building sectoral capacity within government key.
Work with what exists – difficult to create industry from scratch /
private sector not energised
Clear differentiation between annual operational costs and
projects.
Self-sustainability unlikely – most will remain dependent on some
form of gov. support.
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
form of gov. support.
Initial funding requirement to launch regional cluster programme
does not need to be excessive: (+- R5m per year to initiate
process).

12. To conclude:
From the Western Cape experience developing a
broad-based cluster programme has provided a
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
broad-based cluster programme has provided a
solid platform for a regional government to build
institutional “thickness” in targeted sectors, and is
the key vehicle to encourage industrial
restructuring.

13. Thank you!
ISEBE LOPHUHLISO LWEZOQOQOSHO NEZOKHENKETHO
Nigel Gwynne-Evans
Ngwynne@pgwc.gov.za