Archive for November, 2003

Picardie region revitalising metals industry

November 4, 2003

The Picardie region is about two hours drive of Paris (Battle of the Somme area). Their attention to the metals industry is noteworthy. When next in France, why not look them up?  

The Regional Direction for Industry of the Picardie region (DRIRE) and the Union of the Metal Industry of Le Vimeu (UIMMV) recently launched an “Industrial development plan” to support the development of the metal industry of Le Vimeu, Its aim is to create collective inter-firms dynamics such as “clusters”.

The regional Prefecture, the Chamber of Commerce and Industry of Abbeville and the Regional Council is also involved in this plan. The CCI of Abbeville is in charge of its implementation which will last 7 years  – EUR 8 million budget.

The main objectives are:

– analyse and increase the industrial competitiveness by fostering technological transfer, inter-firm  networks and developing ICT.
– promote firms and the territorial industrial identity.
– improve human resources management and develop training in metal industry.
– deal with environmental questions in the industrial development of firms.
The Picardie region has already developed collective dynamics with many local clusters  – the Hydraulic and Mechanical Pole of Albert, the Boiler-making and Maintenance Pole of Ham, the Thiérache Cluster,  and sectoral plans in mechanics, and health.    

Contact: kader.amara@industrie.gouv.fr

Cluster hardware – hubs, spokes, satellites, anchors

November 4, 2003

A Clemson University USA research paper (Barkley/Henry) provides a typology of clusters that is a novel way of looking at them. 

§          Marshallian clusters – mostly locally-owned SMEs concentrated on craft-based, high tech or producer services industries. Substantial trade between firms – firms network to solve problems.

§          Hub & Spoke clusters – dominated by one or several large firms, surrounded by smaller suppliers and related activities. Cooperation exists between small and large firms, but noticeably absent is cooperation among competitor firms to spread risks, stabilise markets, share innovations.

 

§          Satellite platforms – clusters dominated by branch facilities of externally-based MNEs. These branch plants are large and relatively independent – minimal trade or networking takes place between the branch plants within the cluster, and spin-off activities are modest.
 

§          State-anchored clusters – local business structure is dominated by a public or non-profit entity e.g. military base, university, government offices.

Stereotypes – cruel, but funny

November 4, 2003

‘One of the few moments of happiness a man knows in Australia is that moment of meeting the eyes of another man over the tops of two beer glasses’

– note found by English novelist Bruce Chatwin, written on the flyleaf of a book, in a second-hand bookshop in Alice Springs.

 ‘If a Frenchman goes on about seagulls, trawlers and sardines, he’s called a philosopher. I’d just be called a short Scottish bum talking crap.’

– former Leeds player Gordon Strachan, referring to French-born Manchester United soccer star Eric Cantona  

Source: ‘The Australian’. 

Mauritius – textiles & footwear

November 4, 2003

Text’île Innovation

One year after the visit of the SPL Lille – whose mission was to investigate the possibility of promoting clustering in Mauritius – the first Mauritian cluster, Text’île Innovation, was launched in October 2002.

This cluster comprises 17 enterprises in the textile sector – work force of 1,880. Its main objectives are: the diffusion of new products through a Creativity Unit to develop new collections; to reduce its overheads in the supply-chain through the setting up of a central clearing house at the free port, and to enhance the training of the employees through partnership with training institutions. Chairman of the cluster is Joseph Cateaux of Textile EMB Ltd. Secretary is Alexandrine Maigrot of Créacom Ltée.

The mail address of Text’île Innovation 14, Rue Arthur de Bissy, Floréal. Tel.: 251 3405 

Footwear Cluster

The NPCC has been conducting a series of working sessions with members of the Association of Footwear Manufacturers (AFM) to devise a strategy for the footwear industry. Using the proven ZOPP methodology, representatives from 18 enterprises brainstormed to identify the constraints and problems affecting the footwear industry in Mauritius.

With the assistance of the NPCC as facilitator, the participants developed a shared vision for the footwear industry, and defined a mission statement, set objectives and developed an action plan. Through the working sessions, the members of the AFM expressed the view that clustering is the structured framework for promoting cooperation and networking among operators of that industry. The Ministry of Industry has plans to develop a footwear village at Riche Terre.

 Contact natpro@intnet.mu 

Systems thinking

November 4, 2003

 

Professor Peter Senge (Massachusetts Institute of Technology) and Arie De Gues (Chief Planner, Royal Dutch Shell) are pioneers of learning organisations and the application of systems thinking.

They argue that an organisation’s only sustainable competitive advantage in a global economy is the superior performance of its people.  They have taken ‘scenario planning’ and ‘systems thinking’ to new levels to assist management in anticipating change in their environment. At the core of the work has been the development of learning organisations. They allow you to get beyond the vision statement – by generating widespread, quality interactions that inspire people, stimulate innovation and deliver real results. 

Professor Senge has described systems thinking as “a discipline for seeing wholes.  It is a framework for seeing interrelationships rather than things, for seeing patterns of change rather than static snapshots.  It is a set of general principles – distilled over the course of the twentieth century, spanning fields as diverse as the physical and social sciences, engineering and management.”  

The Senge-De Gues approach has symmetry at the community level because communities, like organisations, depend on people to make them tick.

 

Moreover, in today’s complex world, there is a need to better identify connections between cause and effect, and identify just what measurement tools should be used at each stage of its development. It also has the potential to provide pointers for improving resource allocation at both the macro and firm level. 

There are other aspects.

Communities with strong social capital have systems thinking embedded in them, and are more likely to prosper in a globalised world where value chains, industry collaboration and fleet-footed responses to market opportunities win the day. The capital cities and regional centres have an edge in this regard, because it’s easier for the stakeholders to keep in contact.

 Full article appears at www.lgfocus.com.au

For a dialogue, contact Jim Bitomsky, Cairns – jim@kleinhardt.com.au or phone 07  4041 1120 – or the Editor.

Factor conditions do not = a cluster

November 4, 2003

 

A colleague in Queensland has passed on some timery comments.

 

 

‘My current research into horizontal v. vertical clusters is forcing me to replace the word “cluster” with “social networks of businesses”.

 

It is a more cumbersome term, but less ambiguous for government agencies and businesses not terribly familiar with current competitiveness think.

 

Part of the reason for this is God – Porter himself.

 

As I quickly found, you can have all of his factor conditions present and still not have any clusters unless there is the “social” catalyst in the business interaction sense.

Cluster of VW Beetles

November 4, 2003

Executives are rediscovering timeless truths about the advantages of proximity.

In the German city of Wolfsburg, Volkswagen (VW), the local government, and McKinsey are working together to create a regional economic cluster—a concentration of companies and related institutions focused on a specific technological area.

The project is designed to attract high-technology start-ups, as well as suppliers and other relevant companies, to VW’s doorstep and thus to cut local unemployment in half (the equivalent of creating 10,000 new jobs) by 2003. 

In the home of the world’s largest auto plant, the partners have formed a technology center based on the automotive industry. As well as showing corporate citizenship, VW hopes to benefit by creating a vibrant entrepreneurial community and improving the local supplier base.

At the same time, city officials want to combat high unemployment and to revive a dwindling service and retail sector. VW and the local government have so far invested about $12 million and $10 million, respectively, in the project. 

Wolfsburg, some 100 miles west of Berlin, lies close to the border with the former East Germany. It is a classic company town – 50,000 people, and more than half the local labor force works in VW offices and plants. Home of the Beetle, Wolfsburg had a labor market that was in steady decline for years – by the late 1990s, the unemployment rate had reached 18 percent.

To help address the situation, Dr. Ferdinand Piëch, the chairman of VW, initiated the project to stimulate economic growth around VW’s headquarters, and the AutoVision program was born. 

Source: Thomas Heuser, Peter Kraljic, and Martin R. Stuchtey. The McKinsey Quarterly, 2001

Guidelines for economic downturns – USA view

November 4, 2003

The Corporation for Enterprise Development (CFED) in the USA has released its latest Development Report Card on the States (visit http://drc.cfed.org/).

It includes guidelines for state government policymakers to cope with economic downturns – perhaps self-evident, but worth repeating. 

1.       Set spending priorities based on what’s critical for your area’s long-term success.

2.       Consider investments in education, health care, and child development as part of an overall economic development strategy that needs to be maintained in both good and bad times.

3.       Use tax incentives judiciously and strategically, and only in concert with accountability and performance checks.

4.       Make tax reforms to balance often competing goals of equity-efficiency-sufficiency-competitiveness.

5.       Focus on your homegrown economy – don’t let recruitment drive your development strategy.

6.       Create realistic and measurable objectives that reflect your real development goals.

7.       Provide direct labor subsidies if job creation is a prime imperative.

8.       Invest in community leadership and assist unemployed workers, while selectively helping declining, but viable firms.

9.       Use limited government resources to direct and leverage other development services.

10.    Give frontline staff more power to make decisions and to respond flexibly when delivering services.  

Outside investment is an important shot in the arm for a state or local economy. But most jobs are still created by one’s homegrown economy. Businesses do not move when their locations make sense. So, strengthen existing business, promote entrepreneurship, and make wise investments in schools, workforce development initiatives, universities, and the physical infrastructure.

 Source: via NCOE

Information Technology – the Cape Town experience

November 4, 2003

A major report by Infonomics South Africa was released in 2003. It charts the history of the Cape Town IT Initiative (CITI), a cluster development agency in the Western Cape province of South Africa.

The report provides learning material for future initiatives and to assist in future planning. It also includes lessons for cluster practitioners. Some that struck a cord with us are:

§          Cluster development relies heavily on the personal energy of individual champions.
§          The networking role of the CEO is vital.
§          Networks are based on people –clusters developers must provide opportunities for interaction.
§          Flagship projects are a useful rallying point.
§          Cluster developers need secure, sustainable operational funding. 

The report contains a SWOT analysis, which raised numerous issues. Interesting parts include:          

§          Strengths – the mix of funding sources (helped maintain appearance of neutrality); base-line funding from government; web presence – important branding tool; early recognition of the need to understand/analyse the ICT industry and cluster.
§          Weaknesses – seeking funds has been costly; lack of quantitative data about the cluster; lobbying and input into ICT policy development has not been consistent.
§          Opportunities – creation of a credible platform for international trade promotion (export of IT); closer linkages with research community; market Cape Town as a creative city.
§          Threats – cluster members will lose vision and passion; lack of funding over long-term; balancing  need for a formal operational system with maintenance of innovative and entrepreneurial culture. 

Contact Nigel or the Editor.