Clusters are a very popular topic in the EU at the moment. The Commission statement “Towards world-class clusters in the European Union“ was released on 17th October and this communication will be further discussed at the EU Council of Competition in December this year. Here’s a brief overview of concrete applications of EU cluster policy.
The EU envisions clusters as regional, industry-specific consortia, mainly comprised of SMEs with the perceived potential to compete with big global companies. The EU supports cluster development, as does the Czech Republic.
Two levels of support were available during the program period 2004 – 2006. The first one was a mapping project, aimed at identifying appropriate industries and companies to cluster within specific regions. When at least 15 companies were identified that could be grouped with a logical business production chain, these companies were then invited to apply for the support at second level.
The second level of support offered new clusters three years of financial support covering more than 50% of its running costs, including additional investment. (The amount of such financial support was reduced by 75% in the first year, 65% in the second, and 55% in the third year.)
A similar program was introduced for the program period 2007 – 2013. The program was launched in October this year, so by the end of this year we will see how attractive it is for Czech companies.
The idea is not so bad, but in my experience, not many truly functional clusters have been established. I worked as a facilitator of one cluster, and I was also regularly in touch with the facilitators of many other clusters.
The biggest problems I see with clusters are overly burdensome administrative requirements, and inflexible and unclear conditions.
In my view, those companies which are open to cooperate, because the collaboration is meaningful, will form ties even without government support. Companies whose management are afraid of losing of know-how and customers, or who simply aim to ruin their competitors, will not establish clusters regardless of how much the government is willing to support them.
What is your experience in your country?
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Vitku, based on our experience from FIRST Innovation Park the biggest challenge is finding a common interest among the players and their willingness to share information across the value chain. I guess it’s also our mentality problem in Central Europe, we are not used to share info and network so much. Moreover there are very weak relations to university research and a large gap between theory there and practice in businesses.
What administrative requirements and conditions do you specifically mean? We could address them in the policy recommendations to be developed within the CITT cluster strategy later next year.
And also which cluster is easier to build from your experience - horizontal (players from one sector) or vertical (across value chain)?
Although Ukraine does not really have a developed cluster scene, some ad hoc market-driven initiatives start to emerge. Major issues are that there is no governmental support to speak about (but many declarations) and the cluster initiatives supported by the UK and US governmental programmes for Ukraine have not produced any lasting (institutional) results.
Even when there is an interest/business reason to set up a cluster, no cluster manager/facilitator is available on the market. Secondly, even when there are people who are trying to play this role, they do not have necessary international experience, skills and network of contacts (both nationally and internationally). By running around with ideas of clusters, they are often doing more harm than good.
Thanks for your comment, Volodymyr. It’s particularly interesting to hear a perspective from outside of the European Union.
However, I’m curious on one point. How can people ‘do more harm than good’ in their attempts to set up these clusters? What kind of downsides are you talking about?
I can imagine that some of these efforts may be unproductive, but I can’t see how they could create any harm. That would be interesting to know.
While the Ukraine will come close to EU, even financial support to clusters will come, Volodymyr.
I understand how “facilitators” may harm. There is a power at the word. When people speak about clusters and they look like professionals, they will built a construct in the mind of others. When this construct is wrong, because such “facilitator” have a wrong idea what cluster really is, businessmen refuse the idea of clusters and they don´t know, they refused just some misunderstanding…
Have you mean this, Volodymyr?
To answer also Vlastimil´s question. Some horizontal clusters may have a good results, but my opinion is the vertical clusters has to bring much bigger added value to its members.
Vit, indeed, you captured of what I meant by harm well. There is also another factor of harm as a waste of someone’s time. When some “clusters” without real long-term interest engage managers, they take their valuable time from other options of investing the time. Often it could make more difference if owners or managers just spend more time with their team, transferring knowledge and/or developing organizational culture.