Does Centrope have the potential for an ICT cluster? (part one)

Finding the answer to this question is a central goal of the Centrope ICT Technology Transfer project (CITT). The project is comprised of six partners in four countries – Austria, Czech Republic, Hungary and Slovakia – and funded by European Community.

To reach this answer, we performed a SWOT analysis, focusing our attention on the ICT sector. Here are the results of this analysis – the first part. (I’m dividing this work into two parts, due to the length of the text.)

Strengths

1. There is already established a political framework covering cooperation in the Central European region – Centrope.
2. The Centrope countries share many similarities in culture, customs and habits, as well common historical experiences. The Centrope Region offers a strong cultural and historical coherence, both in mentality as well as in the nature of academic life and performance.
3. Many parts of Centrope are relatively prosperous. Vienna and Bratislava have reached even higher levels of the GDP per capita than the EU27 average.
4. The ICT segments in the Centrope region are shifting in importance towards the service sectors
5. The region has established a solid base for research and development.
6. Centrope has a relatively large number of professional and competent IT companies, as well as qualified professionals.
7. The region’s competitive advantage is based on ICT knowledge & skills, good infrastructure and (still) lower labour cost.
8. The Centrope countries have a long tradition of  quality technical education and engineering.
9. The Centrope region offers ICT companies a larger market than just their home countries.
10. An additional market opportunity is the remaining areas of the Centrope countries that fall outside of the Centrope region.
11. Centrope has an advantageous geographical position, frequently described as the “heart of Europe”. The region serves as a “bridge” between more economically and technologically developed European countries and less the developed new EU member states.
12. The number of academic and R&D institutions is big enough to create a base for the ICT cluster.
13. Centrope already has a reasonable number of working IT clusters as well as individual ICT companies willing to cooperate in the Central European region.
14. There are already experienced teams in managing clusters financed by EU funds.
15. There is a chance to organize an international project within the Centrope countries so that final delivery will always be responsibility of a local company. This means that communication with the customer will be with a native-speaking company.
16. High potential flexibility in delivery of projects. There is a chance to organize project teams from members of Centrope ICT cluster.

Weaknesses

1. There is still a “mental and practical” iron curtain between the Centrope countries.
2. Most potential SME participants lack experience in international projects.
3. Most Centrope ICT SMEs lack foreign market knowledge.
4. A mental gap exists between research and business. In particular, academic research in Europe has mainly concentrated on itself, as most institutions have been publicly funded and required no need for third party capital. This has also led to a limited readiness to communicate with the outside, so that there is a major lack of information on what universities do and how competitive their developments might be.
5. Low efficiency in cooperation between academia and ICT businesses, due to low interest and willingness on both sides.
6. Lack of innovative know-how, innovative results and a low offer of the academia and R&D sector for  ICT SME-s.
7. Different and uneven conditions supporting clusters establishment and growth in Centrope countries.
8. Different business culture in Centrope countries.
9. Weak tradition and a lack of experience with projects financed via public private partnership.
10. In HU, SK and CZ there is lack of entrepreneurship tradition and a weak appetite for risk. And there are weak support mechanisms in public and private sectors for risk taking entrepreneurs.
11. National governments lack insufficient vision regarding the knowledge economy (compared to, for example, the UK, Finland, Ireland, Estonia, Korea, and other countries.)
12. There are funds for financing international clusters during their start-up period.
13. Different and uneven conditions supporting clusters establishment and growth in Centrope countries.
14. Possible conflicts between competing companies for participation in the project when tender was won by Centrope ICT cluster and is forming delivery consortium from cluster members.

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