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Cluster Development Guide

A Practitioners Guide for Cluster
Policy, Strategy and Implementation

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 Contents (1/3)
PREFACE PART 1 Strengthening Cluster Policies

▪ Background ▪ INTRODUCTION ▪ EVOLUTION AND ▪ THE ROLE OF

▪ Objective and target group RELEVANCE CLUSTER POLICY
▪ Further readings ▪ The cluster approach ▪ How the cluster approach ▪ Introduction to cluster policy
▪ Strategic alliances as a evolved over time ▪ The interplay between
precursor of the cluster ▪ Clusters as integral parts cluster policy and other
approach of regional economic policies
▪ Differentiating various development ▪ Key success factors
shapes of cluster ▪ Relevance of the cluster ▪ Dos & don’ts in cluster policy
implementation approach in development
cooperation ▪ Importance of the cluster
▪ Further readings approach within GIZ
▪ Key drivers, prerequisites
and obstacles to cluster ▪ Further readings
development
▪ Predominant cluster
approaches around the world
▪ Further readings

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PART 2 Maturity Stages in Cluster Development
▪ INTRODUCTION

▪ INITIATION ▪ ESTABLISHMENT ▪ OPERATIONALISATION ▪ TRANSFORMATION

PHASE PHASE PHASE PHASE
▪ Introduction ▪ Introduction ▪ Introduction ▪ Introduction
▪ Step by step ▪ Step by step ▪ Step by step ▪ Step by step
▪ STEP 1: What ▪ STEP 1: How to opera- ▪ STEP 1: How to › STEP 1: Identifying
potentials do we have? tionalise the strategy? operationalise? trends and challenges
▪ STEP 2: Who needs ▪ STEP 2: How to form ▪ STEP 2: How to attract › STEP 2: Stepping
to be involved? the organisation? and tie cluster actors? beyond cluster
boundaries
▪ STEP 3: Which value ▪ STEP 3: Which ▪ STEP 3: How to reach
added do we want to services and activities cluster management › STEP 3: Becoming
create? to implement? professionality? integral part of an
▪ STEP 4: How to ▪ STEP 4: How to ▪ Further readings innovation ecosystem
develop a strategy? monitor the progress? ▪ Further readings
▪ Lessons learned ▪ Further readings
▪ Further readings

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OUTLOOK LISTINGS

▪ Clusters as agents of regional and ▪ All good practices and examples at a glance
economic transformation ▪ Glossary
▪ Strengthening strategic cluster partnerships ▪ Further readings
▪ Clusters as agents to manage crises ▪ Acknowledgement
and rapid transformation
▪ Clusters 2030 – International Experts
Venturing a Prediction
▪ Further readings

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page 5 Cluster Development Guide – A Practitioners Guide for Cluster Policy, Strategy and Implementation
 * Woman & Hincapie. 2015. / ** Porter. 1990. / *** Izsak et al. 2016. / **** Own calculations based on the work of the
PREFACE European Cluster Observatory 2013 – 2016 and the European Secretariat for Cluster Analyses 2019.

Background
▪ In economic development policy, the term “cluster” is SMEs to access global value chains and can act as
usually used to describe geographical concentrations of drivers of industrial change and carbon-neutral ‘green’
companies and innovation activities. According to cluster transformation.
theory, both firms and regions benefit from clusters.
“These benefits accrue as a result of co-location or ▪ European policy makers have started to apply the
geographic proximity that, in turn, creates lower input approach since the end of the 1990s. Today, around
costs for firms through agglomeration economies and 3,500 cluster initiatives and similar approaches can be
facilitates knowledge spillovers that produce innovation found across Europe****. Other regions in the world like
and increased productivity.”* The cluster approach was North Africa, Sub-Saharan Africa and Asia have also
introduced by Michael Porter** in 1990. Since then, significantly used the cluster approach to increase
economists have used and defined the terms in many, regional competitiveness. In recent years, clusters have
slightly different ways. assumed a new and increasingly important role in the
framework of sustainable development and resilience in
▪ Clusters can be understood as both, a development regional economies.
approach aimed at facilitating networking and
cooperation between companies and a real economic
phenomenon, such as a Cluster management
organisation***. They play a crucial role in boosting
collaboration and networking among companies as well
as in building bridges across different ecosystems,
enabling innovation among SMEs. Clusters can also help

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 PREFACE

Objective and target group

The aim of the present document is to give practitioners The document consists of two parts: While the first part of
comprehensive and recent information on how to best this Guide, PART I (“Strengthening Cluster Policies”) is
support cluster development in practice. It incorporates mainly intended to be utilised by GIZ and its partner
state-of-the-art trends and takes into account the new organisations for developing and implementing cluster
framework conditions resulting from digital transformation development projects, PART II (“Strengthening Cluster
and technological convergence. It also considers the new Management”) targets mainly cluster practitioners within
reality of the COVID-19 pandemic and related societal clusters and cluster support organisations.
changes which give rise to shifts in cluster policies.

Cluster Toolkit
Development for Cluster
Guide Management

Mainly GIZ and related partner Mainly cluster managers or similar actors
organisation as well as their national (e. g. Business Park Management dealing with
counterparts cluster development at an operational level)

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In addition to displaying practical instruments for cluster

practitioners, the guide includes the following topics:
▪ Different shapes of cluster development: Clusters are ▪ Cluster strategies matter: Developing a cluster strategy
about agglomeration, competition and cooperation. This is important for each type of cluster. Strategies differ
can be achieved by cluster initiatives, Special Economic according to the stage of maturity a cluster operates in.
Zones, Industrial Parks and other similar initiatives. The
guide focusses less on which cluster type is the “right ▪ Interplay between clusters and regional development
one”. It will instead endeavor to show that different policy: Clusters are more and more understood as
development efforts must be matched by the appropriate active tools for regional development. Regional
management approaches. developers are in a good position to become partners for
cluster management entities.
▪ Cluster emergence and different cluster development
stages: Clusters display different stages of maturity,
from embryonic to advanced to specialised phases. The
management requirements change in accordance with
each stage of development.

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FURTHER READINGS
▪ Izsak, K., Ketels, C., Meier zu Koecker, G. & Laemmer-Gamp, T. 2016.
Smart Guide Cluster Policy, European Commission, doi: 978-92-79-52975-7.
▪ Keller, M., Reingruber, I., Dermastia, M. & Meier zu Koecker, G. 2019.
Implementing S3 with Clusters - An Innovation Model for Transformative Activities.
Fteval Journal for Research and Policy Evaluation, Issue 47, pp. 23-34. doi: 10.22163/fteval.2019.325.
▪ Laemmer-Gamp, T., Meier zu Koecker, G. & Christensen, T. 2011.
Clusters are Individuals, The Danish Agency for Science and Technology, tryk: 978-97-92776-22-8.
▪ Porter, M. 1990. The Competitiveness Advantage of Nations, Harvard Business Review.
▪ Scheer, G. & von Zallinger, L. 2007. Cluster Management Handbook, GIZ.
▪ Woman, H. & Hincapie, D. 2015. Development Policy, Economic Development Quarterly, 2015, Vol 29 (2),
doi: 10.1177/0891242413517136.

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 PART 1 › Introduction

OVERVIEW OF
PART 1

Strengthening Cluster Policies

▪ INTRODUCTION
▪ EVOLUTION AND RELEVANCE
▪ THE ROLE OF CLUSTER POLICY

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 PART 1 › Introduction

OVERVIEW OF PART 1:
INTRODUCTION

▪ The cluster approach

▪ Strategic alliances as a precursor of the cluster approach
▪ Differentiating various shapes of cluster implementation
▪ Further readings

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 PART 1 › Introduction / Cluster approach * Porter. 1990. / ** European Commission. 2018.

The cluster approach

Since Michael Porter published his book on the Only very few businesses feature sufficient capital, market
competitive advantages of nations in the early 90s*, the know-how, product knowledge and ability to learn on their
cluster approach has become an important instrument of own. To combat these limitations, businesses, especially
regional competitiveness policy all over the world. SMEs, must focus on their core competences and
establish well-structured collaborations with
Why clusters? complementary partners.
Due to globalized value creation processes, digital and Cluster participation plays a crucial role in boosting such
carbon-neutral transformation as well as sectoral and collaboration of enterprises. To further support innovation,
technological convergences, today’s businesses face internationalisation and competitiveness, clusters can
complex and turbulent environments. help to build bridges connecting different ecosystems,
▪ They must sell a stream of new and better products in supporting innovation, internationalisation and
identified growth markets which are often heavily competitiveness**.
contested.
▪ They must take the lead in quality improvement and new
technologies.
▪ They must produce and sell at competitive prices.
▪ To reach these goals, firms must innovate successfully
through dedicated R&D on a regular and long-term
basis.

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 PART 1 › Introduction / Cluster approach * Bergman & Feser. 2020.

The cluster approach

Over the past decades, the economy has flourished in Clusters can arise on their own where suppliers and
regions where multiple businesses are engaged in supplementary service providers relocate or establish
strategic alliances with an industry or positioned along an businesses in places where there are already enough
associated value chain. Such regional ecosystems also partners with complementary competencies. External
include business service providers, R&D institutes, economies based on shared infrastructure, skilled workers,
innovation service providers, universities and advanced knowledge networks and a culture of innovation present
training institutions. Regional agglomeration is a key the opportunity to specialize and create a binding force in
ingredient for successful cluster development. the region*. This can lead to a regional upgrade in terms of
economic development, giving it appeal for new
complementary business relocations and related cluster
growth.

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 PART 1 › Introduction / Strategic alliances

Strategic alliances as a precursor of the cluster approach

Forerunners of the cluster approach are so-called "strategic alliances".
Strategic alliances generally have the following characteristics (among others):

orientation on benefits orientation on strengths partial link functional autonomy

The partners expect a The anticipated added The partners in the alliance The partners in the alliance
benefit for themselves. value arises out of the bring in these specific maintain their autonomy.
interaction based on strengths & competences,
specific strengths of the but not their businesses as
partners. a whole.
BUSSINESS A BUSSINESS B

A cluster might grow organically where a critical mass of

companies in an industry engage in strategic alliances ASSUMPTIONS, SKILLS, BENEFITS,
within a given value chain. EXPECTATIONS RESOURCES TRUST

BENEFITS, SKILLS, ASSUMPTIONS,

TRUST RESOURCES EXPECTATIONS

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 PART 1 › Introduction / Various shapes

Differentiating various shapes of cluster implementation

Regional economic or cluster policy often supports cluster All clusters share four qualifying characteristics:
formation and development by establishing or promoting ▪ a spatial focus
the necessary hard and soft infrastructures. It is essential ▪ a sectoral focus
to build upon a critical mass of supplementary actors ▪ a critical mass of firms
and competences. Cluster development does not ▪ a management unit
necessarily serve as a short-term solution for any While clusters share these qualities, their implementation
structural weaknesses in the system. Rather, it is a long- may take on various shapes portrayed in the following two
term commitment on the part of all actors concerned. slides.
In many countries, policy promotes the creation of Cluster
Initiatives, Special Economic Zones or Industrial Parks.
These include related business services offered to the
cluster participants by a coordinating entity such as cluster
management or park management.
Such clustering initiatives are organised networks of
alliances among a large number of different actors in a
regional economic system.

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 PART 1 › Introduction / Various shapes * UNIDO. 2020. / ** Sforzi. 2002. / *** Bergman & Feser. 2020. / **** Moore & Hamalai. 1993.

Differentiating various shapes of cluster implementation

Inter-firm Network Growth Poles
(Inter-firm) Networks are alliances of firms that work Growth Poles are centers of propulsive industries, i.e.
together towards economic and/or environmental goals. industries that dominate other sectors because of their
They can be established between firms within clusters but large size, considerable market power, and/or role as lead
also exist outside clusters. Networks can be horizontal innovators. Expanding industries (or even individual firms)
(firms that compete for the same market) and vertical represent poles of growth which attract, concentrate, and
(firms belonging to different levels of the same value direct other economic resources.
chain)*. The genesis of the growth pole idea was mainly in
economics, rather than in geography space, although
Industrial District geographical agglomeration was not excluded***.
In contrast to the theoretical construct of ‘growth pole’ ,the
industrial district is a local system characterized by the Business Associations
active co-presence of a human community and a dominant Business Associations bring together firms with similar
industry constituted by a set of small independent firms interests, therefore providing a wide range of functions,
specialized in different phases of the same production including voicing the collective interests of member
process. The term ‘Industrial District’ was initially companies they represent or offering services such as
developed by Alfred Marshall in 1890**. training, information, networking, organising trade fares
etc. There is a huge variety of possible organisational
structures a business association can have. Regional
proximity is not a must****.

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 * United Nations Conference on Trade and Development (UNCTAD). 2019; Farole. 2011. /
PART 1 › Introduction / Various shapes ** IASP. 2020. / *** Peddle. 1993. / **** UNIDO. 2017.

Differentiating various shapes of cluster implementation

Special Economic Zone (SEZ) To enable these goals to be met, a Science / Technology
SEZs are geographically delimited areas within which Park stimulates and manages the flow of knowledge and
governments facilitate industrial activity through technology amongst universities, R&D institutions,
administrative, fiscal and regulatory incentives and companies and markets; it facilitates the creation and
infrastructure support that are different than those of the growth of innovation-based companies through incubation
domestic country. SEZs are widely used across most and spin-off processes; and provides other value-added
developing and many developed economies*. services together with high quality space and facilities**.

Science and Technology Park (STP) Industrial Park

A science / technology park is an organisation managed An industrial park is defined as a large tract of land, sub-
by specialised professionals, whose main aim is to divided and developed for the use of several firms. It
increase the wealth of its community by promoting an features shared infrastructure and promotes the close
innovative culture and the competitiveness of its proximity of firms***.
associated businesses and knowledge-based institutions.
Eco-industrial Park (EIP)
A Technology Park has similar objectives as an Industrial
park, but is more focused on technology and innovation. EIPs are a dedicated area for industrial use at a suitable
site that ensures sustainability through the integration of
social, economic, and environmental quality aspects into
its siting, planning, management and operations****.

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 PART 1 › Introduction / Cluster vary * Christensen et al. 2011.

Clusters vary across sectors and regions

Clusters vary across different variables, for example with regard to the number of their members, level of specialisation
of their members and their governance structure. These differences depend, amongst others, on:

Sector
Whereas manufacturing clusters usually focus on quality and
productivity, agribusiness cluster might focus on organic
sourcing or export promotion from the very beginning. For
Biotech or Life Science clusters, R&D and innovation is often
the prevailing field of activities. ICT clusters often focus on
business generation and market penetration.

Country / Region
Of course also the maturity of the overall economy, industrial
landscape and framework conditions shape the characteristics
of clusters and their development path. Consequently, cluster
development varies between countries and regions. For
example, in developing countries, clusters often have fewer
R&D institutions and universities among their members. Thus,
country specific approaches for cluster development are the
most promising way*.

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FURTHER READINGS
▪ Bergman, E. & Feser, E. 2020. Industrial and Regional Clusters: ▪ Peddle, T. 1993. Planned Industrial and Commercial Developments in
Concepts and Comparative Applications; Perroux, 1950, Economic the United States: A Review of the History, Literature, and Empirical
space: theory and applications. Quarterly Journal of Economics 64, pp. Evidence Regarding Industrial Parks and Research Parks. Economic
89-104. Development Quarterly 7 (1), pp. 107-124.
▪ Christensen, T., Laemmer-Gamp, T. & Meier zu Koecker, G. 2011. ▪ Perroux, F. 1950. Economic space: theory and applications. Quarterly
Clusters are Individuals – Creating Economic Growth through Cluster Journal of Economics 64, pp. 89-104.
Policies for Cluster Management Excellence.
▪ Porter, M. 1990. The Competitive Advantage of Nations, Harvard
› Retrieved from [Link]
Business Review.
individuals-2013-creating-economic-growth-through-cluster-policies-
[Link], [accessed July 2020]. ▪ Sforzi, S. 2002. The Industrial District and the ‘New’ Italian Economic
Geography. In: European Planning Studies, Vol. 10, No . 4.
▪ European Commission 2018. Industrial Cluster Policy.
› Retrieved from [Link] ▪ Sinkule, B. & Ortolano, L. 1995. Implementing Environmental Policy in
cluster_en, [accessed May 2020]. China.
▪ Farole, T. 2011. Special economic zones in Africa: Comparing ▪ United Nations Conference on Trade and Development (UNCTAD).
performance and learning from global experiences. 2019. World Investment Report 2019 – Chapter IV: Special Economic
› Retrieved from [Link] Zones.
SEZs%20in%[Link], [accessed May 2020]. › Retrieved from: [Link]
WIR2019_CH4.pdf, [accessed May 2020].
▪ International Association of Science Parks and Areas of Innovation –
IASP. 2020. Definitions. ▪ United Nations Industrial Development Organization (UNIDO). 2020.
› Retrieved from [Link] Clusters and networks development.
[accessed May 2020]. › Retrieved from: [Link]
economic-competitiveness/supporting-small-and-medium-industry-
▪ Moore, M. & Hamalai, L. 1993. Economic Liberalization, Political clusters/clusters-and-networks-development, [accessed May 2020].
Pluralism and Business Associations in Developing Countries. World
Development, 21, No. 12, pp. 1895-1912. ▪ United Nations Industrial Development Organization (UNIDO), World
Bank Group & Gesellschaft für Internationale Zusammenarbeit (GIZ).
2017. An International Framework for Eco-Industrial Parks.

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 PART 1 › Evolution & Relevance

OVERVIEW OF PART 1:
EVOLUTION & RELEVANCE

▪ How the cluster approach evolved over time

▪ Clusters as integral parts of regional economic development
▪ Relevance of the cluster approach in development cooperation
▪ Key drivers, prerequisites and obstacles to cluster development
▪ Predominant cluster approaches around the world
▪ Further readings

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 * Marshall. 1890. / ** Schumpeter. 1981. / *** Bagnasco. 1977. /
PART 1 › Evolution & Relevance / Evolution **** Becattini. 1979. / ***** Porter. 1990. / ****** European Cluster Policy Group. 2010.

How the cluster approach evolved over time

The idea of businesses co-locating with related firms (including competitors) is nothing new – it could already be
observed in ancient Athens. In the city center, the agora, fruit, fish, spice and perfume retailers and jewelers gathered
in adjacent corners. In Germany, two regions with long traditions in specific products are Nuremberg for pencil
manufacturing and Solingen for specialty steels.

Observers of this co-location phenomenon include the following:

1890 Alfred Marshall, described his observations on northern 1978 Giacomo Becattini in 1979 drew on his experience with
England in The Concentration of Specialised Industries in Italy’s industrial districts, highlighting spatial economic
Particular Localities (1890): “When an industry has chosen a development and social relationships. Becattini emphasized a
locality for itself it is likely to stay there long: so great are the passive “embeddedness” and an active “sense of belonging”
advantages which people following the same skilled trade get to a place with a shared vision****.
from near neighbourhood to one another (…) and presently
subsidiary trade grows up in the neighborhood”*. The availability 1990 Michael Porter popularised the relevance of clusters as a
of skilled labour, intermediate goods, easy transmission and framework for economic development in 1990. By introducing
discussion of new ideas and improvements are pointed out by the ‘Diamond Model’, Porter describes why some firms and
Marshall as major advantages. some regions were particularly successful. His comprehensive
work drew on research in ten leading trade countries:
1939 Joseph Schumpeter in 1939 highlighted the “swarm like Denmark, Germany, Italy, Japan, Korea, Singapore, Sweden,
appearance of entrepreneurs” and “the clustering of industry”**. Switzerland, the UK and the US*****.
1977 Arnaldo Bagnasco in 1977 established the term ‘Third Italy’ 2008 European Cluster Policy Group, led by Tea Petrin, set the
referring to areas in north-eastern and central Italy that cornerstones for the modern European Cluster Policy
are characterized by a strong presence of crafts-based small Approach. This approach placed the importance of cluster
firms clustered in a constellation of specialized industrial organisation and related excellence at the core of the
districts***. approach. It also established the importance of leveraging
cluster development interventions through the support of
framework conditions******.

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 PART 1 › Evolution & Relevance / Integral parts * Meier zu Koecker et al. 2017.

Clusters as integral parts of regional economic development

Interdependency of clusters and economic In the past, cluster initiatives primarily supported partners
development from business and science. The associated services often
It is crucial for the success of cluster development that reflect the entire breadth of the needs of this customer
cluster actors benefit individually based on a common group including networking, matching, training and
goal. This means that cluster initiatives – through their education, working groups, cross-clustering, technology
work on behalf of members from the fields of science and transfer, internationalization and more. Nonetheless,
business – must significantly contribute to the two cluster initiatives may also operate on a smaller scale
following outcomes: representing targeted efforts. For example, a cluster
initiative might work on defining and refining thematic
fields of strength of a region which could facilitate the work
(1) increased competitiveness and innovation capacity of business development agencies and other regional
of the individual cluster actors through the actors for purposes of regional economic development
synergetic interplay of different core competences, efforts. Thus, a cluster initiative usually represents
a subset of actors in a regional ecosystem*.
(2) the overall development of the cluster in size,
memberships, services, and growth accelerator.

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 PART 1 › Evolution & Relevance / Integral parts * Ketels. 2013. / ** Keller et al. 2018. / *** Foray & Goenaga. 2013. / **** Sedlmayr et. al 2019.

Clusters as integral parts of regional economic development

Clusters as a tool for regional economic In order to implement priorities and open up new paths for
development a future-oriented transformation of regional economic
Today, clusters in Europe, US, Latin America and beyond structures, a critical mass of capacities in certain sectors
are well acknowledged as tools for strategic regional (industry, technology, R&D and related fields) is needed.
economic development*. The rise of the concept of High-performing clusters can provide this. Strategically
Research and Innovation Smart Specialisation oriented cluster initiatives logically then become crucial
Strategies (RIS3), introduced by the European vehicles in the design and implementation of holistic
Commission as mandatory requirement to receive regional economic development strategies in the sense of
European Structural Funds, contributed significantly to a S3. In turn, cluster initiatives benefit from such an
comprehensive rethinking**. Article 2(3) of the Common integrated approach when successful diversification occurs
Provisions Regulation for the European Structural and by specializing on a certain number of prioritized economic
Investment Funds defines S3 as activities***.
There is increasing evidence that cluster initiatives can be
“regional innovation strategies which set priorities in order
a significant tool for implementing regional economic
to build competitive advantage by developing and
matching research and innovation strengths to business strategies. Key conditions are access to market
needs in order to address emerging opportunities and intelligence, readiness for continued adaptation to new
framework conditions and overall neutrality****.
market developments in a coherent manner, while
avoiding duplication and fragmentation of efforts.”

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 PART 1 › Evolution & Relevance / Integral parts * Keller et al. 2018.

Clusters as integral parts of regional economic development

Interplay between cluster and regional innovation
and economic strategies*

Regional economic development, innovation strategies

and clusters are strongly intertwined. A regional innovation
strategy typically relies on existing local resource
concentrations, which are often represented by
clusters. Cluster initiatives are ideal “tools” to use in the
process of developing and implementing
regional strategies and thus strongly favoured by policy
makers. In this perspective, clusters are
vehicles transmitting innovation processes initiated by
regional strategies to the business level, ultimately
contributing to create jobs in innovative new fields. On the
other side of the coin, clusters are often also direct
beneficiaries of such strategies.

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 PART 1 › Evolution & Relevance / Integral parts * Sedlmayr et al. 2019.

Clusters as integral parts of regional economic development

Involvement of different actors in the different During the development process of an innovation strategy,
phases of the development of a regional innovation which is typically grouped into analytical, development and
strategy* implementation phase, the different actors take over
different roles. However, the figure below nicely indicates
The process of developing regional innovation or
that cluster initiatives play an important role throughout the
economic strategies typically involves a broader set of
entire strategy process. That’s why cluster (initiatives)
actor groups. This is needed, since all these different actor
matters in regional strategy development and
groups represent different demands and fields of interest.
implementation.

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 PART 1 › Evolution & Relevance / Relevance * UNIDO. 2014.

Relevance of the cluster approach in development cooperation

Benefits of clusters for SME development Objectives of cluster development in development
Globalization and digital transformation processes cooperation
increase the demand for innovation. Competitiveness and Whereas the overall objectives of cluster development are
innovation on SME level depends on multiple similar for well-developed and less developed regions, the
competences, which rarely one SME can raise on its own. focus areas may differ. Whereas joint R&D and innovation
Reaching out to select partners is essential in order to as well as common product development is at the core of
integrate and bundle necessary competences and to many cluster activities in developed countries, cluster in
leverage synergies for successful outcomes. less developed countries often focus on productivity
Clusters offer SMEs, especially in developing countries, an improvement, raising quality of products, skill
opportunity to stimulate each other’s business development, policy advocacy or export promotion*.
development and to establish an international profile There are many examples, some of which are portrayed
through networking, cooperation and joint undertakings. on the following slides.
International visibility matters in a globalized business
world. For example, Northern African regions with
predominantly SME structures, such as Morocco or
Tunisia (to mention just a few examples) have been able
to improve their international position as car assembly hot-
spot through cluster formation in the past.

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 * United Nations University Maastricht Economic and Social Research and
PART 1 › Evolution & Relevance / Example 1/3 Training Centre on Innovation and Technology. 2008.

EXAMPLE
Fishery Cluster Uganda*

CHALLENGE CLUSTER KEY FACTORS & INSTIGATORS RESULT

OBJECTIVE FOR SUCCESS

New regulations and ▪ Skill development of The key success factor was the 85 % of cluster firms rapidly
enforcement of EU market employees of cluster firms on common undertaking for fishery upgraded the process to meet
standards caused risk of how to meet hazard analysis process-related upgrading: EU requirements, mainly down
potential exclusion for Uganda and critical control points government, donor agencies, due to the proximity that
fishery processing firms from (HACCP) criteria, mandatory fish-processors association and facilitated knowledge spill-overs
global supply chain. to export to EU. private firms worked closely needed to spread mandatory
▪ Trained the minimum number together. The Development knowledge as fast as possible
of firms needed to assure the Organisation and Fish- among the cluster firms to avoid
minimum amount of supply. processors Association ban-out from EU market.
(UFPEA) was key instigator that
took the lead.

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 PART 1 › Evolution & Relevance / Example 2/3 * Expert interviews, additional information retrieved from [Link]

EXAMPLE
Automotive Cluster Serbia*

CHALLENGE CLUSTER KEY FACTORS & INSTIGATORS RESULT

OBJECTIVE FOR SUCCESS

After the disintegration of Besides productivity and quality There were several key success Today, almost 15 years after its
Jugoslavia, the automotive improvements, the main goal of factors that contributes to the inauguration, the Automotive
industry faced huge the cluster development was to successful cluster development. Cluster AC Serbia is still very
transformation processes. enable more firms to become Firstly, the key instigators: The active and lively. It gathers 40
Furthermore, productivity and embedded in global automotive Serbian Ministry for Economy members and 15 support
quality was not appropriate to supply chains and to increase as well as GIZ were the key partners. It is commonly
be exposed to global export shares. drivers behind the development, considered as one of the good
competition. assuring strong political and practices of cluster development
financial backing. Secondly, a in the West Balkans. The
professional cluster manager current focus of the cluster
was recruited, well experienced management is on new
in setting up Automotive services, support in
clusters in the Balkans. Thirdly, digitalization and topics on
key automotive firms actively ecology.
joined from the beginning.
Finally external investors
stepped in, which made the
cluster very attractive. The time
sequence of the individual
success factors contributed to
the overall success of the
cluster.

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 PART 1 › Evolution & Relevance / Example 3/3 * Expert interviews, SME and DCFTA in Georgia – Final Report.

EXAMPLE
Georgian Apparel and Fashion Association (GAFA)*

CHALLENGE CLUSTER KEY FACTORS & INSTIGATORS RESULT

OBJECTIVE FOR SUCCESS

Up until 2015, Georgian apparel ▪ Integration of the industry into The first step was to identify The Georgian Apparel and
SME produced mainly for the global apparel value chains market opportunities through an Fashion Association was
local market. Their huge export with a focus on sustainability in-depth analysis of the value registered in December 2020
potential was untapped. ▪ Branding “Made in Georgia” chain. Next, three selected with 24 members and continues
Producers lacked access to as a quality seal for companies were strengthened to grow. Focusing on
international markets, were sustainable clothing and in their capacity to comply with sustainability and innovation,
unable to document their fashion. international buyer standards. GAFA prioritizes digitalization in
adherence to international The basis of the cluster was the production process as well
standards and lacked sales then expanded to further as for online sales globally. The
power and experience in industry players including Association (the term “cluster” is
presenting and marketing their fashion designers, producers of avoided because of its
products. men‘s and children‘s wear and connection with the corona
to the regions of the country. pandemic in Georgian public
Cluster members implemented discourse) will drive export and
innovative approaches, e.g. thus create jobs*.
production of eco-textiles or
specific clothing produced with
and for persons with disabilites.

© GIZ (Office Georgia)

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 PART 1 › Evolution & Relevance / Key drivers

Key drivers, prerequisites and obstacles to cluster development

Success factors for cluster development
Regardless of the objective and shape of a given cluster, For SMEs in particular, there is also the appeal of gaining
there are certain features which apply to all successful access to missing resources, know-how and network
cluster development processes: partners, while offering their own contributions to the
All involved cluster actors should trust each other. As partner. This allows each partner to concentrate on its
relevant internal data is always used as part of the strengths while using the other businesses to supplement
collaboration, such trust is essential. the other areas.
▪ All cluster actors are involved voluntarily and retain their
independence. This is the only way to ensure a high
quality of project input and output.
▪ Cooperation occurs in a dynamic and open style.
A rigid structure would be unable to exploit
arising opportunities.
▪ As cluster actors remain competitors in other areas,
there is no movement toward cartel formation. This
boosts the dynamic level of the alliances and ensures a
stimulating environment (“coopetition”)
▪ The cooperation results in clear additional benefits to
all participating cluster actors.

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 PART 1 › Evolution & Relevance / Prerequisites

Key drivers, prerequisites and obstacles to cluster development

Prerequisites for successful clusters
(PART I) (PART II)

There are no “quick wins”, but medium and long term Professional cluster management is the main engine.
development. Clusters need professional cluster management structures with
Clusters are a tool for the further development of existing regional or competent, experienced and motivated people.
entrepreneurial strengths, not for resolving structural weaknesses in
the short-term. There is no “one size fits all” support for cluster actors.
The premise is, that cluster management must offer services that
A critical mass is needed. add value for cluster actors.
An adequate number of supplementary and active businesses is a
prerequisite for successful cluster development. Targeted policy support stimulates clusters but doesn’t build
clusters.
Actively involve champions. Authorities can provide decisive support for clusters through
Reaching a critical mass of engaged cluster actors matters. appropriate stimulating programmes, partnerships and innovative
Individual instigators, anchor firms and interested policy makers are service models, such as the “one stop shop” model. However, they
vital for a cluster development process right from the very beginning. cannot “build” clusters.

Common core competences have to be in place and common

goals envisioned.
A clear focus on core competences, a common identity and a
common vision is required from the start.

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 PART 1 › Evolution & Relevance / Obstacles

Key drivers, prerequisites and obstacles to cluster development

Potential obstacles to clusters and cluster development
(A) Stemming from potential cluster actors (B) Stemming from cluster (management) structures
▪ A mismatch between structures and cultures of the ▪ Lack of informal networking trust building activities based
cluster actors on (shared) experiences
▪ Lack of legal or financial possibilities for cooperation ▪ Lack of cluster management personnel as well as lack of
among cluster actors professional experience and competence among cluster
▪ Lack of trust among the cluster actors (shortcomings in staff
the cluster culture) ▪ Lack of financial resources dedicated for cluster
▪ Lack of knowledge of the actors management
▪ Lack of understanding of added value when engaging in ▪ Lack of consensus-based strategy and common goals
cluster activities and why getting engaged becomes ▪ Lack of relations to relevant partner entities outside the
beneficial for all cluster (risk of “lock-in”)
▪ Vague or unrealistic expectations of cluster actors.

Obstacles (A) and (B) mutually reinforce each other.

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 PART 1 › Evolution & Relevance / around the world

Predominant cluster approaches around the world

Europe
On the level of the European Union, selected policy instruments to develop innovative regional
strategies were introduced in the early 1980s. Explicit cluster policy programmes have been around
since the late 1990s.
To assure common principles in these approaches, the EU policy focused on improving framework
conditions for clusters in all Member States as well as on supporting internationalization.
The European Commission has implemented several actions and initiatives in this regard:
▪ The European Cluster Observatory fosters the understanding the role clusters play in industrial
change and transformation processes,
▪ The European Strategic Cluster Partnership and B2B missions aim at the internationalization
of clusters,
▪ The European Secretariat for Cluster Analysis (ESCA) promotes cluster management excellence,
▪ The European Cluster Collaboration Platform (ECCP) facilitates knowledge exchange between
European cluster managers.
Besides the European Commission, its member states have developed further cluster policies in
recent years. Although country specific cluster support programmes focus on different priorities and
use different instruments, all pursue the same objectives: They seek to provide need based
support of cluster actors and promote the improvement of conditions for sustainable regional
and sectoral development of clusters.

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 PART 1 › Evolution & Relevance / around the world * European Secretariat for Cluster Analysis. 2018.

Predominant cluster approaches around the world

Africa
Cluster development approaches vary across Africa. Support has been provided by a range
of donors and multilateral agencies, usually with short-term horizons and therefore limited
sustainability. Some cluster projects have not been sufficiently resourced to move beyond
analysis stages.
▪ In Northern Africa, the French “Technopoles” approach prevails.
▪ Many Sub-Saharan countries stimulate competitiveness and job creation through SEZs,
Business Parks, and physical infrastructure.
▪ Cape Town, South Africa, was an early adopter with ten clusters under development. As
with the Cape IT Initiative, business energy led to government engagement.
▪ In Tanzania, Uganda and Mozambique universities provided neutral ground and
knowledge to introduce clustering before donor support was concluded. For the Ugandan
Fishing Cluster in Lake Victoria, the national government has provided critical support*.

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 PART 1 › Evolution & Relevance / around the world * European Commission. 2016. / ** European Secretariat for Cluster Analysis. 2018. / *** Government of Canada. 2020.

Predominant cluster approaches around the world

North America
In the USA, relative to Europe, there are few well-resourced long-term clustering initiatives
underway and very few attempts to connect related US clusters. Public interventions tend to
focus on improved framework conditions*. Noteworthy initiatives include the Massachusetts
Medical Cluster, the Cumberland Emerging Technology Cluster, the New England Water
Innovation Network and the Research Triangle Clean Tech Cluster**.
Canada’s more substantial experience with clustering initiatives started with Quebec,
drawing on France. Canada has recently scaled up significantly with a national cluster
competition to select five Superclusters offering $950 million in co-funding over five years to
the winners: the Digital Technology Cluster, the Protein Industries Cluster, the Next
Generation Manufacturing Cluster, the Scale AI Cluster and the Ocean Cluster***.

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Predominant cluster approaches around the world

Australia and Oceania
Cluster development in Australia has had sporadic public support. A number of regional
governments have supported short-term interventions. More recently, three of the national
Industry Growth Centres have cautiously engaged in cluster development. One is
organising a national competition to select four regional food clusters to receive three years
of support.
Internationally, New Zealand was one of the first economies to support cluster development,
following the close advice of Prof. Porter. While New Zealand’s initial efforts discontinued
due to lack of momentum, the country’s few frontier firms with an international reach are
reinvigorating interest in cluster-based regional development.
With EU support, a very short-term cluster development project encouraged four small
Pacific Island countries to identify and engage in a pilot cluster program. Papua New
Guinea’s ICT cluster continues to grow.
While both Australia and New Zealand have hosted Global Conferences of the TCI
Network, cluster development has yet to gain substantial policy support in the South Pacific.

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Predominant cluster approaches around the world

Latin America and the Caribbean
▪ Latin America has made huge progress in cluster development since the 1990’s. The
most active regional chapter in the TCI Network is Latin America.
▪ Many countries, including Bolivia, Brazil, Chile, Colombia and Mexico have implemented
long-term cluster policies. Most are continuing. The Inter-American Development Bank
has been an important partner and chambers of commerce have also been particularly
active.
▪ Cluster support programmes place significant attention on monitoring results and
evaluation to improve the design and implementation of the programmes.
▪ Compete Caribbean has been active in introducing the merits of a clustering approach to
many of the small Caribbean countries. The organisation is a joint venture of the UK and
Canadian development agencies.

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 PART 1 › Evolution & Relevance / around the world * Choe & Roberts. 2011.

Predominant cluster approaches around the world

East and Central Asia
There are a variety of cluster development approaches across Asia. Some countries,
including China and South Korea have focused on SEZ and Industry Parks; Japan has a
focus on R&D clusters which remain relatively isolated from businesses.
▪ Russia has implemented a very top-down cluster approach with success in sectors where
Russia is particularly strong in, such as defence as well as in oil & gas. Recently it has
made impressive progress with business-driven clusters.
▪ India has extensive experience in cluster development with a focus on SME growth
resulting in part from UNIDO support.
▪ A number of donors such as the World Bank have provided short-term support for
clustering activities in many countries. These include Pakistan, Bangladesh, Sri Lanka,
Thailand, Viet Nam and Cambodia.
In a number of countries, there is a movement away from investing in physical infrastructure
and providing financial incentives to individual businesses towards promoting
competitiveness of industry clusters, incentivizing specialized industries and enabling high -
level skills development and innovation*.

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FURTHER READINGS
▪ Bagnasco, A. 1977. Tre Italie: la problematica territoriale dello S3 Policy Brief Series. No. 01/2013. European Commission Joint
sviluppo italiano. Research Center.
▪ Becattini, G. 1979. Dal ‘settore’ industriale al ‘distretto’ industriale:▪ Foray, D., Keller, M., Bersier, J. & Meier zu Koecker, G. 2018.
alcune considerazioni sull’unità d’indagine dell’economia industriale. Transformative Activities for Smart Specialisation: Considerations on
Rivista di economia e politica industriale, 1, pp. 7-21. a Workshop Methodology, Working Paper of University for Applied
Physics Lausanne, Retrieved from
▪ Choe, J. & Roberts, L. 2011. Competitive Cities in the 21st Century,
[Link]
Cluster-Based Local Economic Development. Retrieved from
Activities_for_Smart_Specialisation_Considerations_on_a_Workshop_
[Link]
Methodology, [accessed June 2020].
[Link], [accessed June 2020].
▪ European Commission. 2016. Cluster and Workforce Development – ▪ GIZ Georgia, 2020, Georgian Apparel Cluster Initiative. Retrieved
The Massachusetts Case. Retrieved from from [Link] [accessed September 2020].
[Link] ▪ Government of Canada. 2020. Canada‘s New Superclusters,
ussion_paper_skills_development.pdf, [accessed June 2020]. Retrieved from [Link]
▪ European Cluster Policy Group. 2010. Final Recommendations – [accessed June 2020].
A Call for Policy Actions. Retrieved from [Link] ▪ Keller, M., Reingruber, I., Dermastia, M. Bersier, J. & Meier zu Koecker
[Link]/object/document/7861, [accessed June 2020]. G. 2018. Smart Specialization Strategies (S3) and Clusters –
An Innovation Model for Transformative Activities., Working Paper,
▪ European Secretariat for Cluster Analysis. 2018. Retrieved from
University for Applied Physics Lausanne.
[Link]
clusters/?country=6a7389f0dba345fab09a30cd321b3d23, ▪ Ketels, C. 2013. Recent research on competitiveness and clusters:
[accessed June 2020]. What are the implications for regional policy? Cambridge Journal of
▪ Fazilullah, M. 2017. Study on Honey Production by Using Wooden Regions, Economy and Society, 2013, 6, pp. 269-284.
and Poly Hive in Bangladesh.
▪ Ffowcs-Williams, I. 2016. Cluster Development Handbook.
▪ Foray. D., Goenaga, J. 2013. The Goals of Smart Specialisation.

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and Implementation
 PART 1 › Evolution & Relevance

FURTHER READINGS
▪ Marshall, A. 1890. Principles of Economics. ▪ Soelvell, O., Lindqvist, G. & Ketels, C. 2013. The Cluster Initiative
▪ Meier zu Koecker, G., Schneider, K. & Grieb, B. 2017. Cluster Greenbook 2.0, Stockholm Business School, Ivory Tower Publisher
Initiatives as Path maker for Regional Innovation Development. AB, ISBN 978-91-974783-5-9.
▪ United Nations Industrial Development Organization (UNIDO). 2014.
▪ Porter, M.1990. The Competitive Advantage of Nations.
Diagnostic Study on a Lacquerware Cluster in Bagan and Nyaung-U,
▪ Schneider, K., Meier zu Koecker, G. & Ziegler, O. 2019. Strengthening Myanmar.
the capacities of clusters in the Danube region. Retrieved from
[Link] ▪ United Nations University Maastricht Economic and Social Research
content/uploads/sites/4/sites/4/2020/01/White-Paper_Danube- and Training Centre on Innovation and Technology. 2008. Industrial
Region_FINAL_.pdf, [accessed July 2020]. cluster and innovation systems in Africa.

▪ Schumpeter, J.1981. The Theory of Economic Development – An

Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle.
▪ Sedlmayr, B., Meier zu Koecker, G. & Buhl, C. 2019. Trend Report –
Development dynamics of cluster initiatives in Germany over time. doi:
10.13140/RG.2.2.23939.25120.
▪ Sedlmayr, B., Meier zu Koecker, G., Grieb, B. & Noegel. L. 2019.
Understanding Regional Transformation Processes – New Instruments
for Regional Strategy Development, Working Paper of the Institute for
Innovation and Technology (iit), doi: 10.13140/RG.2.2.32777.60004.
▪ Soelvell, O., Lindqvist, G. & Ketels, C. 2003. The Cluster Initiative
Greenbook, Stockholm Business School, Ivory Tower Publisher AB,
ISBN 91-974783-1-8.

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 PART 1 › The Role of Cluster Policy

OVERVIEW OF PART 1:
THE ROLE OF CLUSTER POLICY

Creating conducive framework conditions for cluster development

▪ Introduction to cluster policy

▪ The interplay between cluster policy and other policies
▪ Key success factors
▪ Dos & don’ts in cluster policy
▪ Importance of the cluster approach within GIZ
▪ Further readings

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 * Izsak et al. 2016.
PART 1 › The Role of Cluster Policy / Introduction ** Christensen et al. 2012.

Introduction to cluster policy

A Cluster policy is an expression of political commitment to The performance and development potential of clusters
strengthen existing clusters and/or facilitate the depend on three dimensions which have to be considered
emergence of new ones. Cluster policies aim at by policy makers when introducing policy
establishing favourable business environments for or programme interventions (see figure below)**.
innovation and entrepreneurship and the development of
new value chains .
▪ Dimension of framework conditions
The motivation is that the cluster approach offers greater (environment of a cluster)
benefits compared to ▪ Dimension of cluster firms
▪ firm-level interventions, as cluster-level actions ▪ Dimension of cluster management organisation
can create greater leverage and reach a larger number
of firms.
▪ industry-level interventions, as interventions on
cluster level avoid many of the distortions relating
to suppliers along the value chain that otherwise
often emerge.
▪ economy-wide policies, as they can be better
targeted at the specific issues faced by companies
in a set of related industries*.

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 PART 1 › The Role of Cluster Policy / Interplay * European Commission. 2016. / ** ChinaPower Project. 2019.

The interplay between cluster policy and other policies

Cluster policy interventions can address one or several of ▪ Tax exemptions for Textile Industrial Parks in Ethiopia
the aforementioned levels. contribute to cluster development by attracting investors
The best impact results from supporting all three levels in to invest in local textile cluster firms. They also serve as
parallel and over a long period based on one policy a motivator for local firms to move into such cluster
approach or the interaction of several policies. facilities.
▪ Stimulating Foreign Direct Investments in the 90s in the
Improving framework conditions Massachusetts region (US) resulted in huge foreign
investments in local cluster firms and attracted
Cluster actors need favorable framework conditions for
international firms to move into the Medical Technology
growth and job creation. This includes sufficient
Cluster in Boston*.
infrastructure such as roads, electricity, and IT networks
▪ Improved intellectual property regulations in China
but also low tax burdens, minimal bureaucracy and secure
stimulated local cluster actors to invest in R&D and
legal frameworks among other conditions. As mentioned
innovation**.
before, cluster policy is not a single policy but rather a set
▪ The German Initiative SI Jobs supports job creation
of measures with a dedicated focus on improving cluster
through cluster developments in Africa. One objective of
development.
this effort is to improve certain framework conditions for
around 14 selected clusters.

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The interplay between cluster policy and other policies

Direct support of cluster actors Cluster organisations
Cluster policy can provide direct incentives for cluster Providing financial support for cluster management
actors. These may include matching funds for firm-level organisations to stimulate networking, matchmaking, trust
investments, skill development programmes for employees building or cooperation among the cluster actors is one of
working in cluster firms, subsidies for innovation creation, the most common approaches of cluster policies.
and export promotion support for cluster actors. Incentives
to match industry and academia are also typical policy
measures. By focusing on a given cluster, such measures
can achieve good leverage with limited resources.
▪ The German Cluster Cutting Edge Programme directly
supported actors of selected clusters by providing up to
40 Mio EUR funding for innovation from 2012 – 2016
for each selected cluster.

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The interplay between cluster policy and other policies

By bundling actors and knowledge, clusters serve as Clusters are mouthpieces of challenges and development
important hinge between business, research and society in potentials at the local or regional level. Therefore, cluster
various thematic fields at the micro level and policy becomes a relevant lever in all policy areas that are
corresponding policy areas at the macro level. relevant for integrated and sustainable regional
development.

POLICIES CONDUCIVE TO SUPPORT CLUSTER DEVELOPMENT

INNOVATION FOREIGN TRADE INFRA- ENVIRONMENT

SOCIAL
POLICY POLICIES STRUCTURE
Environmental policy can be
Stimulating the innovative Cluster firms depend on Good social framework
Improved trade policies and a burden, but also a driver
milieu within clusters good infrastructure. New (conditions) as well as
export promotion support for for cluster development.
through targeted measures drivers like digitalisation or working conditions are
cluster actors helps them to GreenTech clusters,
foster innovation and, thus, sustainability puts new important determinants to
compete globally as well as stimulated by environmental
increases competitiveness infrastructural requirements attract talents and keep
to better export their goods. policies, are a good
of the cluster firms. in place workers in cluster motivated examples for this.

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 PART 1 › The Role of Cluster Policy / Key success factors

Key success factors

Many of the mentioned prerequisites for successful clusters in chapter 2 apply to cluster policy, too.
The most essential aspects to support cluster development on the part of cluster policies are:

No wishful thinking, but thought-through and long-term cluster Cluster policy thrives on continuous exchange and transparency.
policy.
▪ Set realistic goals that can be measured through an indicator-
▪ No “one fits for all” solution, there is no blueprint for cluster based system. Also encourage cluster management to implement
development support. strategies with clear goals and measurable indicators.
▪ Clusters are no remedy for short-term solutions to structural ▪ Establish PPP dialogues at a regular basis – no matter the
insufficiencies in the regional economy. development level of a cluster. This helps to continuously monitor
▪ Focus on evidence based regional capabilities and strengths and policy measures and to capture needs and challenges of cluster
establish a common understanding of cluster policy. actors.
▪ Long-term cluster policy matters. Cluster policy is a long-term ▪ Policy evaluation is crucial for regular updates and refinements of
commitment from the public and private sector. policy programmes or measures.
Bottom-up vs. top-down cluster policy at different maturity levels. Cluster policy as part of an integrated policy system.
▪ Be aware of different maturity levels of clusters and adjust support ▪ Cluster policy shall be embedded or linked to other regional policies
programmes accordingly (e.g. financial support for building cluster and not be considered as a stand-alone policy. It is not merely a
management capacities at embryonic level, individual hands-on cluster funding policy.
support for strategy building at advanced cluster development level). ▪ Foster close coordination and alignment between different policy
▪ Find a good balance between top-down and bottom-up areas in order to avoid redundancies and an cannibalization
approaches when designing cluster development support between regional economic support instruments.
programmes.
▪ Bottom-up-oriented cluster policy can incentivize regional
cooperation and engagement among cluster-relevant actors.

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 PART 1 › The Role of Cluster Policy * Own illustration of authors.

EXPERIENCES AND GOOD PRACTICE EXAMPLE

Good practice example for long-term engagement –
experiences from Germany
Germany: 25 years of cluster support – the holistic cluster For example, Germany’s Leading-Edge Cluster Competition
development approach supported cluster actors (firm-level funding of R&D, in total 600 Mio.
EUR funding for collaborative R&D among cluster actors), but also
Cluster policy in Germany is not a stand-alone policy; rather, it is
provided funds for the cluster management. The figure also indicates
well embedded in economic and R&D policy on Federal and Federal
that policies for cluster development in Germany happened
State level. The Figure below reveals various support programmes
continuously on two levels. Support provided on Federal State Level
implemented since 1993 intended to support cluster development*.
mainly aimed to initiate cluster development (early stage), whereas
These programmes target several levels of cluster development on Federal level, striving for cluster excellence (cluster management
(see previous chapter). excellence and innovation excellence) was the core objective.

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 PART 1 › The Role of Cluster Policy * European Commission. n.d.

EXPERIENCES AND GOOD PRACTICE EXAMPLE

Good practice example of developing cluster support schemes –
experiences from Romania, Tunisia and Georgia (1/3)
Romania: Competitiveness Operational Programme (COP)
and Programme for Development of Innovative Clusters*

MAIN OBJECTIVE FUNDING PRIORITIES ROLE OF CLUSTER POLICY

The overall goal is to build a modern R&D ▪ R&D and innovation supporting ▪ This example shows how different
environment that focuses on the economic competitiveness and the policies and related programmes can go
businesses' needs and facilitates development of businesses hand in hand to provide added value for
cooperation between the private and ▪ Information and communication all actors involved
academic sector through clustering. technologies for a competitive digital ▪ Cluster organisations were strengthened
Relevant programme components are: economy to support industrial and academic
▪ Reinforcement of the research, ▪ Financinal support for selected cluster actors to participate in the COP
development and innovation organisations programme.
(RDI) capacity (resources and ▪ Two programmes contributed to cluster
infrastructure) development, also in areas of export
▪ Boosting private investments in RDI promotion, industry development and
▪ Develop Centres of Excellence human resources development and
▪ Strengthen the links between cities development.
businesses and research institutions,
and
▪ Strengthening of cluster initiative and
their management.

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 PART 1 › The Role of Cluster Policy * GIZ Tunisia. 2020.

EXPERIENCES AND GOOD PRACTICE EXAMPLE

Good practice example of developing cluster support schemes –
experiences from Romania, Tunisia and Georgia (2/3)
Tunisia: “Tunisia Digital 2020” and Cluster Development*

MAIN OBJECTIVE FUNDING PRIORITIES ROLE OF CLUSTER POLICY

“Tunisia Digital 2020” is a five-year Whereas the Tunisian government is The project is well aligned with the Tunisia
strategy targeting ICT technologies in providing funds for the Programme Digital 2020 strategy. Both efforts support
order to significantly increase the number “Tunisia Digital 2020”, the current the clustering and digital transformation of
of jobs and export earnings within the ICT development of two clusters in the field of at least 200 manufacturing companies.
sector. Industry 4.0 in Sousse and Sfax is Tunisia Digital 2020 provides additional
▪ This strategy aims to make Tunisia an supported by GIZ. Besides mandatory support for cluster actors, like improved
international digital reference and make infrastructure for both cluster initiatives ICT infrastructure or SME support
ICT an important lever for socio- (Competence Centers), the staff of the measures. Both initiatives go hand in hand
economic development. centers are co-financed as well*. with the “Smart Tunisia” Initiative that
▪ Through this strategy, Tunisia would like offers export promotion and attracts
to create employment, value added by international partner in the offshoring
innovation and improve business sector.
competitiveness by the development of
ICTs
▪ The GIZ-implemented project works
hand in hand with Tunisia Digital 2020
and supports the development of two
cluster like entities

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 PART 1 › The Role of Cluster Policy * Information provided by GIZ Georgia.

EXPERIENCES AND GOOD PRACTICE EXAMPLE

Good practice example of developing cluster support schemes –
experiences from Romania, Tunisia and Georgia (3/3)
Georgia: National Cluster Development Policy Framework*

MAIN OBJECTIVE FUNDING PRIORITIES ROLE OF CLUSTER POLICY

The main goal is to foster the development ▪ Strengthen the capacities of research ▪ Clusters as drivers for fragmented
of clusters across all sectors through a institutions and business development sectors in a small country
coherent cluster policy and programme. organisations to promote cluster ▪ Focus on sector development and
▪ Create knowledge and expertise among development synergies derived from increased
policy makers and staff of the national ▪ Financing mechanisms to set up new or competitiveness
enterprise development agency support mature clusters ▪ Driving productivity and standards at
▪ Elaborate appropriate policies and tools ▪ Internationalisation of cluster company level, leveraging innovation
▪ Delivery of cluster support programmes organisations: participation in and stimulating new business
and initiatives to SME international fairs, workshops and opportunities for SME
▪ Impact Monitoring seminars
▪ Feedback into future policy making and
adjustment of instruments

© GIZ (Office Georgia)

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Dos & don’ts in cluster policy (1/5)

CLUSTERS AS
UNDERSTANDING CLUSTER CLUSTER CLUSTER TOOLS FOR
CLUSTERS IDENTIFICATION DEVELOPMENT EXCELLENCE REGIONAL
DEVELOPMENT

DESCRIPTION DOS POLICIES & INSTRUMENTS

Understanding Clusters: ▪ Develop a common understanding of the ▪ Use case studies to understand how
During the 90s of the last century, cluster approach and how clusters can cluster development worked in the past
understanding clusters and clustering contribute to regional objectives. and which success factors were relevant.
effects was at the top of policy agendas. ▪ Engage the public and private sector already ▪ Use practical guides that define the role
However, cluster policy interventions are at that stage to assure a sound and common and characteristic of clusters.
still often implemented without a sound understanding. ▪ Establish public-private dialogue
understanding of the cluster approach and ▪ Understand key success factors. formats where the relevant public and
its potential. Key questions are: potential cluster actors at local, regional
▪ What parts of the value or supply chain and national level can exchange views at
can be covered by the targeted cluster? a regular basis.
DON‘TS
What is missing or shall intentionally be ▪ Dialogues, meetings and conferences are
excluded? useful to capture challenges and needs of
▪ Do not follow the cluster approach because
▪ What are limits and potentials of the cluster actors and develop policy support
you believe it might solve structural problems
cluster development? measures accordingly.
in regions.
▪ What shall be reached by cluster
▪ Avoid a ‘copy and paste’ of concepts from
development?
other regions.
▪ Do not support single cluster development
without properly embedding it in regional
economic or (national) cluster policy.

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Dos & don’ts in cluster policy (2/5)

CLUSTERS AS
UNDERSTANDING CLUSTER CLUSTER CLUSTER TOOLS FOR
CLUSTERS IDENTIFICATION DEVELOPMENT EXCELLENCE REGIONAL
DEVELOPMENT

DESCRIPTION DOS POLICIES & INSTRUMENTS

Cluster Identification: ▪ Elaborate indicators and thresholds defining ▪ Cluster mapping approaches, like US
Identifying clusters with high growth whether or not there is a critical mass and Cluster Mapping, European Cluster
potential is not that trivial. Cluster and value sufficient competitive advantage for cluster Collaboration Platform, Indian Cluster
chain mapping tools help to identify the development. Mapping and other publicly available tools
number and type of existing cluster actors ▪ Set up a neutral PPP board (group of experts) can be used to learn how cluster
and possible gaps in terms of actors and for selecting clusters to be supported. identification can work.
functions. In order to get an idea of the ▪ Embed cluster identification in a regional ▪ Quantitative data that provide sector-
dynamics of the cluster, relationships and discovery process. specific information about businesses are
interactions between actors and the an important input, but must reflect the
competitiveness of the individual actors, it is regional component.
DON‘TS
important to conduct qualitative interviews. ▪ Chambers or sectoral associations often
Together, these will allow development have valuable data or information needed
▪ Do not define policy ‘wishful thinking’ clusters
projects and policy makers to identify for cluster identification.
in 'hype sectors'.
clusters with potential for growth and ▪ PPP Dialogues can be useful to bring in
▪ Clusters shall not be identified by a ‘closed
development. different competences and market
shop’ approach.
intelligences.
▪ Number of clusters in a region shall be
limited. Quality matters!

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Dos & don’ts in cluster policy (3/5)

CLUSTERS AS
UNDERSTANDING CLUSTER CLUSTER CLUSTER TOOLS FOR
CLUSTERS IDENTIFICATION DEVELOPMENT EXCELLENCE REGIONAL
DEVELOPMENT

DESCRIPTION DOS POLICIES & INSTRUMENTS

Cluster Development: ▪ Communication is beneficiary to avoid ▪ There are various instruments for cluster
Cluster development is a long-term journey competition with other entities (e. g. development, ranging from cluster
involving public and private sector actors. associations, chambers etc.). competitions (select the best cluster
Different implementation modalities can be ▪ Assure long-term commitment from public and approaches) up to top-down decision
chosen, like cluster initiatives, Special private sector. making.
Economic Zones (SEZ), Technopoles or ▪ Define a clear long term vision for the cluster ▪ Linking cluster development with other
Industrial Parks. All these modalities have initiatives with the aim of implementing regional economic development
different pros and cons. independent cluster organisations. strategies or policies helps to leverage
Practice has shown that support of cluster clustering effects.
development works best when it is adapted ▪ Cluster benchmarking or cluster baseline
DON‘TS
to the typical cluster life cycles. Immature analyses help to measure progress even
clusters need other forms of support than before it becomes economically visible.
▪ Do not start cluster development for 2 to 3
well-matured clusters under transformation. ▪ Cluster development can contain
years, it takes longer before impact will be
monetary components for cluster
created.
organisations or cluster actors, but also
▪ Do not start with any cluster development if it
non-monetary components, like training of
is not embedded in a long-term policy support
management authorities in charge with
scheme.
cluster development or cluster labelling to
increase international visibility.

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Dos & don’ts in cluster policy (4/5)

CLUSTERS AS
UNDERSTANDING CLUSTER CLUSTER CLUSTER TOOLS FOR
CLUSTERS IDENTIFICATION DEVELOPMENT EXCELLENCE REGIONAL
DEVELOPMENT

DESCRIPTION DOS POLICIES & INSTRUMENTS

Cluster Excellence: ▪ Sufficient human and financial capacity is a basic ▪ Training / Coaching: A continuous
Cluster excellence becomes relevant when for cluster excellence. cluster management training
cluster development has reached a certain ▪ Employ a well matured management team with approach helps the cluster
degree of maturity. Cluster excellence is mixed competences and sectoral experiences. management team to develop.
mainly understood as professional cluster ▪ Follow the guidelines given by ESCA to ▪ The European Cluster Excellence
management, since history has shown that understand what cluster excellence means in Gold/Silver/Bronze Label: The label
professional cluster management can make day-to-day practice. not only provides an orientation as to
a difference. Cluster management excellence ▪ Benchmark with peers to initiate mutual learnings. how well the cluster management is
was invented in Europe, but is nowadays set up, it also helps to point out weak
internationally accepted. Guidelines and an points. These can be addressed by
DON‘TS
internationally recognized standard for targeted measures.
▪ Do not consider cluster excellence as marketing
cluster excellence is provided by the ▪ Data collection and management:
label in the first place, but as opportunity for
European Secretariat for Cluster Analysis Conduct surveys or use monitoring
constant professionalization.
(ESCA) in close cooperation with the tools to observe progress and
▪ Do not hire unexperienced staff for the cluster
European Commission. success based on data.
management.
Besides the management component,
▪ Do not focus to much on technical competences,
cluster excellence also reflects on the quality
do not underestimate the importance of social
of cluster actors, mainly firms. Strong firms
and management skills.
are needed to assure cluster excellence.
▪ Do not understaff your cluster management team.

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Dos & don’ts in cluster policy (5/5)

CLUSTERS AS
UNDERSTANDING CLUSTER CLUSTER CLUSTER TOOLS FOR
CLUSTERS IDENTIFICATION DEVELOPMENT EXCELLENCE REGIONAL
DEVELOPMENT

DESCRIPTION DOS POLICIES, TOOLS & INSTRUMENTS

Clusters as tools for regional development: ▪ Use clusters as a tool for regional economic ▪ Analysing the existing cluster: Try to
Mature clusters offer more than just networking, development not only in one sector, but for a use the knowledge of professional cluster
bundling firms or initiate cooperation. They can holistic entrepreneurial ecosystem. management to find more insights about
be used as an important instrument of regional ▪ Focus on well-performing and professional the specific needs and challenges of the
development, particularly concerning region- cluster organisations a vehicle for companies in your region.
specific transformation processes such as digital programme implementation. ▪ Entrepreneurial discovery workshops:
transformation, climate change or new industry ▪ Involve clusters when designing regional Try to elaborate new innovative cross-
sectors. Excellent clusters have a deep policy interventions. sectorial fields for transformation.
knowledge about the regional cluster-related ▪ PPP Dialogue: Bring clusters and policy
capacities. They have been cooperating with the level together to explore needs of the
DON‘TS
companies and academia, in some cases for sectors and capabilities of regional
many years. Thus, they have gained deep policies.
▪ Do not misuse clusters by day-to-day policy
knowledge about their challenges and problems ▪ Elaboration of an integrative regional
interference.
of the sector and related markets. Therefore, development strategy: It could be useful
▪ Do not count on clusters with a weak cluster
regional economic policies which make use of to collect the cluster-related topics and
management or missing critical mass.
this kind of knowledge from the clusters can measures for regional transformation in
▪ Avoid redundancies and respect
hugely benefit from it when identifying relevant one regional innovation strategy.
peculiarities between individual clusters and
transformation processes and deriving individual
integrated regional development strategies.
and effective support measures.

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Importance of the cluster approach within GIZ

▪ Cluster development supported by GIZ has a long Examples where clusters successfully served as a
tradition. It is an important element of many private tool for development cooperation issues:
sector development (PSD) initiatives.
▪ The objectives of the cluster support initiatives GIVE – Green ICT DeVElopment
implemented by GIZ on behalf of the German The GIVE initiative was intended to build a strong strategic
government or multilateral donors range from cluster partnership aiming at several clusters in Western
productivity and quality improvements or Balkans.
competitiveness increase of MSMEs, to better market Key implementer: ICT Cluster Bulgaria.
assess until sustainability and contribution, to social and
environmental goals. In the recent past, cluster Hey Ti, Aj Ti
development is also considered as a tool for job creation
The project targeted elementary pupils to get to
and better working conditions.
know the whole procedures of software development.
▪ The trend of GIZ to address sustainability and
Key implementer: ICT Cluster of Central Serbia.
environmental issues through clusters all over the world
goes well in line with current trends in Europe and the
NARR – Innovative Clusters
US, where the cluster approach is more and more used
to address global and social challenges. Cluster capacity building was supported within NARR to
▪ In more developed regions, GIZ uses matured clusters provide innovative services to companies of the
as vehicles to implement dedicated measures for ICT Cluster of Central Serbia.
industrial growth as the cluster approach is beneficial to Key implementer: ICT Cluster Serbia.
mobilize a higher number of beneficiaries or use the
© ICT Cluster Central Serbia
multiplier effect.

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 PART 1 › The Role of Cluster Policy * Information provided by GIZ Albania; Wood Industry Cluster of Albania. 2020.

EXAMPLE
WICA-Wood Industry Cluster of Albania

▪ Short description: Wood Industry Cluster of Albania - (WICA) is a non-profit NGO, whose
primary goal is to improve companies’ competitiveness, thus registering world trends and
changes in the global market, as well as adjusting the participants’ own production to such
trends and changes.
▪ Objective of GIZ engagement: In Albania, the need to promote and implement a model of
industrial activity from smaller units to bigger ones, such as the cluster approach, has been
identified – the wood processing industry serves as a model to ensure increased
competitiveness in the domestic, regional and broader markets.
▪ GIZ contribution: In close collaboration with all Albanian partners, WICA has been
registered officially in April 2019. GIZ’s contribution has been in technical expertise in
cluster development including all related partners. Additionally, legal support has been
provided for official registration according to Albanian law. Regional experiences and
expertise of Western Balkan countries have been shared. Promotion activity has been a
fundamental part of GIZ support throughout.
▪ Other contributing partners: Ministry of Energy and Infrastructure, Ministry of Economy
and Finance and Albanian Investment Development Agency; Faculty of Forest Engineering,
Union Chambers of Commerce of Albania as well as business companies in wood
processing sector.
▪ Why it is a success: The project has provided for a proper environment to boost the
development of the wood cluster and promote the Albanian economy. A close collaboration
between all actors of government, academia and business has been at the core of WICA
establishment. At a macro level, a reform of national policies has begun in order to provide
for an appropriate cluster development ecosystem. On a micro level, new momentum has © WICA – Exhibition in Tirana in 2019
been induced to the wood processing industry in Albania*.

61 61 Cluster
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 PART 1 › The Role of Cluster Policy

FURTHER READINGS
▪ ChinaPower Project (Ed.). 2019. Is China leading in global innovation? ▪ European Secretariat for Cluster Analysis. 2020. Retrieved from
Center for Strategic & International Studies (CSIS). Retrieved from [Link] [accessed June 2020].
[Link] ▪ GIZ Tunisia. 2020. Factsheet Digitalzentrum Tunesien 2020. URL:
[accessed June 2020]. [Link]
▪ Christensen, T., Laemmer-Gamp, T. & Meier zu Koecker, G. 2012. %202020%[Link]. [accessed July 2020].
Let’s Make a Perfect Cluster Policy and Cluster Programme, Danish
▪ ICT Cluster Bulgaria, GIVE - Green Ict development. 2020. Retrieved
Ministry of Science, Technology and Innovation Copenhagen/Berlin,
from [Link]
2012, PRINT ISBN: 978-87-92776-53-2.
[accessed June 2020].
▪ Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). ▪ Izsak, K., Ketels, C., Meier zu Koecker G. & Laemmer-Gamp, T. 2016.
2020. SME Development and DCFTA in Georgia. Final Report. Smart Guide Cluster Policy, European Commission,
▪ European Commission (EC). 2016. Smart guide to cluster policy. doi:10.2873/48105.
Retrieved from [Link] ▪ WICA-Wood Industry Cluster of Albania. 2020. Retrieved from:
guide-to-cluster-policy, [accessed June 2020]. [Link] [accessed June 2020].
▪ European Commission (EC). (n.d.). Competitiveness Operational
Programme Romania. Retrieved from
[Link]
2020/romania/2014ro16rfop001, [accessed June 2020].

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 PART 2 › Maturity Stages in Cluster Development

OVERVIEW OF
PART 2

Maturity Stages in Cluster Development

Tailor-made support and tools for cluster development along its life cycle

▪ Introduction
▪ INITIATION PHASE
▪ ESTABLISHMENT PHASE
▪ OPERATIONALISATION PHASE
▪ TRANSFORMATION PHASE

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 PART 2 › Maturity Stages in Cluster Development

Four stages of cluster development

In the following chapter is structured around four maturity stages a cluster portray.
Each stage requests individual support and tools to be applied.
SUSTAINABILITY

TRANSFORMATION

OPERATIONALISATION

ESTABLISHMENT

INITIATION
TRUST

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Four stages of cluster development

INITIATION ESTABLISHMENT OPERATIONALISATION TRANSFORMATION

PHASE PHASE PHASE PHASE

▪ A critical number of ▪ There is a critical number ▪ Cluster coordination ▪ The Cluster organisation
cluster actors with of cluster actors with becomes an important becomes professional
regional focus operate regional focus. driver for networking and driver for new topics and
disconnected from each trust building. services to be
▪ One or several cluster
other. implemented.
actors act as driving ▪ More sophisticated
▪ Cluster actors represent force. cluster services are ▪ Attention is more and
a given sector or have embedded. more put on future
▪ A cluster organisation or
specific competences. competitiveness of the
a cluster ▪ The triple helix of
cluster as a whole.
▪ A champion appears. coordinator/instigator is academia, industry and
established. government is well ▪ International visibility and
represented. cooperation gains
▪ First services offered by
importance.
the organisation leads to ▪ More cluster actors join
networking and trust the cluster to benefit from ▪ The cluster becomes a
building among cluster the creative milieu. driver for regional
actors. change and strategic
regional development.

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 PART 2 › Initiation phase

OVERVIEW OF PART 2:
INITIATION PHASE

▪ Introduction
▪ Step to take when initiating clusters
› STEP 1: What potentials do we have?
› STEP 2: Who needs to be involved?
› STEP 3: Which value added do we want to create?
› STEP 4: How to develop a strategy?
▪ Lessons learned
▪ Further readings

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Introduction: Potential champions – Who makes the first move?

Cluster development pathways often vary depending on who drives an initiative. A first step can occur in the form of a top -down or
a bottom-up approach, or in a hybrid form when policy makers and business representatives identify common ideas for the initiati on
of a cluster endeavor.

Initiatives for cluster development can be ▪ Driven by intermediary organisations such as economic
▪ Business-driven when businesses, mainly SMEs, identify areas for development agencies, chambers of commerce (e. g. Lebanese
cooperation, Chamber of Commerce and Industry in the Ivory Coast (LCCI-CI))
▪ Driven by individual entrepreneurs / visionaries who foresee or or business associations when common needs among the actors
know the benefits of targeted networking, have been identified and are now to be transferred into an
▪ Policy-driven when local or regional economic assets and organized collaboration effort,
development potentials are to be promoted, ▪ Research-driven when universities or research entities seek for a
▪ Donor-driven when clusters function as vehicle for development better connection to each other and to the local or region
cooperation, economy.

The type of champion can have a considerable influence on the organisational structure and on the strategic orientation
of a cluster initiative.
In any case, it is crucial to focus on actual potentials for cooperation and to take actor’s needs into consideration when
developing strategic goals and organisational structures.

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 PART 2 › Initiation phase / Introduction

Key questions and factors when starting

Cluster development usually follows a step by step approach. Good preparation is key, but clusters and networks cannot simply be planned
on the drawing board and too much technical planning can actually restrict the network’s ability to act. The best concept for the initiation is
probably to plan solidly while remaining open to the steady flow of new challenges.

10 KEY QUESTIONS when starting (6) What benefits shall the cluster approach offer its actors?
(1) What do we want to achieve through the cluster approach? (7) What existing successful or solid strategic alliances can the
(2) Can we use other means to reach our goal? cluster approach build on?
(3) What partners and key actors do we need? (8) Is the “chemistry” between the partners right?
(4) Do partners have sufficient economic, organisational and (9) What trust-building measures are required?
innovative capacity? (10) Are the goals and functions of the future clustering activities
(5) What benefits (strengths) are the partners bringing into? clear to all relevant stakeholders?

KEY ACTIONS Cluster development requires thorough preparation and planning before implementation can be considered.
It will be necessary to carry out the following key actions during the initiation phase. The sequence is not cut in stone and may vary.

1 2 3 4
Understand regional Plan the
Identify and involve Formulate specific
structures and organisational
potential partners intentions, goals and
business structure and
needed for the efforts! strategies!
environment! financial model!

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 PART 2 › Initiation phase / Step by step

Steps to take when initiating clusters

As already indicated, some essential factors have to be taken into consideration for successfully initiating the cluster deve lopment.
It is crucial, to address each of the four key questions with appropriate tools, to carry out a sound analysis and get the “right” cluster
actors on board.

+ + +
What potentials Who needs Which value added How to develop
do we have? to be involved? do we want to create? a strategy?

STAKEHOLDER IDENTIFY DEMANDS & BUSINESS MODEL

CLUSTER MAPPING
ANALYSIS NEEDS CANVAS

PREPARE
VALUE CHAIN MAPPING INVOLVE KEY ACTORS DEVELOP GOALS ORGANISATION AND
STRUCTURE

SWOT ANALYSIS RAISE AWARENESS CLUSTER STRATEGY

ACTION PLAN

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 PART 2 › Initiation phase / Step by step / Step 1/4 What potentials do we have?

It is important to note that the steps and procedures to develop goals and strategic reversely, conducted separately in some parts, – differs from case to case. Moreover,
fields of action can vary depending on the starting position, pre-existing not all steps are equally relevant for different cases. For instance, instigators from the
knowledge, preconditions for cluster development and depending on the type of business sector would rather tend to skip a cluster mapping, if they are already familiar
instigator. Thus, the way how analysis and actors’ involvement are integrated – or, with their economic environment.

Step 1: What potentials do we have?

+ + +
What potentials do we Who needs to be Which value added do How to develop a
have? involved? we want to create? strategy?

STAKEHOLDER IDENTIFY DEMANDS & BUSINESS MODEL

CLUSTER MAPPING
ANALYSIS NEEDS CANVAS

PREPARE
VALUE CHAIN MAPPING INVOLVE KEY ACTORS DEVELOP GOALS ORGANISATION AND
STRUCTURE

SWOT ANALYSIS RAISE AWARENESS CLUSTER STRATEGY

ACTION PLAN

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 PART 2 › Initiation phase / Step by step / Step 1/4 What potentials do we have?

Cluster mapping
Create a first information basis through hard data. Limitations of data-based cluster analysis:
Cluster mapping is the measurement of the presence, size, and ▪ Mismatch of traditional sectors in statistics and cluster-relevant
performance of clusters across locations, applying common areas
definitions of cluster categories derived from evidence about ▪ Cross-sectoral development and industrial change is often not
patterns of location-specific linkages and spill-overs across adequately covered in official statistical data illustrating a status
locations60. It provides a first static picture of spatially concentrated quo in the recent past
cluster structures without taking qualitative aspects into account.
▪ Official statistics do not assess the qualities clusters, i.e.
A review of secondary data, e.g. published statistics, highlights interlinkages and dynamics within a given cluster
concentrations of economic activity within a region. It also identifies
clusters that are growing faster than other sectors within the region ▪ No assessment of specific local or regional conditions and cultural
and shows comparative advantages over other regions – nationally peculiarities
and/or internationally. Approaches for this analysis will vary ▪ No information about real needs of local and regional actors in
according to the depth of published statistics that are available61. terms of cooperation
EXAMPLES: Hence, cluster mapping shall be used as one of several analytical
▪ Europe tools. It provides a rational fundament for further efforts with the
› ECCP: [Link] involvement of potential cluster actors.
› [Link]
▪ USA
› [Link]
▪ Russia
› [Link]

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for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 1/4 What potentials do we have? * Meier zu Koecker et al. 2019.

Value chain mapping

Creating evidence to what extent the local value Value chain mapping helps to identify where actors are missing that
chain is covered have to be attracted for the benefit of the entire cluster development.
The case below illustrates, how differently a given value chains can
A value chain mapping is an important tool to understand to what covered across two different clusters. The plastics cluster in
extent nodes of a given value or supply chain are covered by local Southern Germany covers the entire plastic manufacturing value
actors. Or, even for existing cluster initiatives, value chain mapping chain, whereas a similar cluster around Abidjan does not feature all
helps to identify white spot or missing links. actors and firms within the plastic supply chain (e. g. raw material
provider or machinery manufacturer)*.

GERMANY CÔTE D’IVOIRE

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for Cluster Policy,
Policy, Strategy
Strategy and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 1/4 What potentials do we have?

SWOT - analysis
A systematic analysis of strengths, weaknesses, opportunities and Intentions & goals of the actors
threats (SWOT) helps to establish a realistic picture and to derive
fields of action and priorities for the cluster. Identified areas for collaboration or priorities for clusters need to be
defined in more detail. If, for example, the analysis has shown that a
The analysis of strengths and weaknesses is part of the internal distribution alliance would be interesting for the business, it is
analysis and relates to the cluster and its members. The classic necessary to define what exactly is understood by that. While this
approach to the internal analysis is the value chain approach, does not require detailed planning, the picture of the strategic
which distinguishes between primary activities (goods inward alliance should become clearer.
logistics, production, goods outward logistics, marketing and
distribution, customer service) and secondary activities ▪ What benefits can a business generate for itself from a
(administration, management, human resources, R&D, strategic alliance?
procurement). ▪ What benefits can it offer its partners? What competences is a
There are various approaches and tools for the external analysis business prepared to bring into the strategic alliance?
covering opportunities and threats, e.g. the “five forces” approach ▪ How well is the business prepared to open itself up to its partner?
to evaluating the central determinants of competition (industry ▪ What business details does it intend to keep to itself?
competitors, suppliers, new entrants, buyers and substitutes).
Specifically international market developments and innovations need
to be taken into account here, as the cluster has to be able to act
and stay abreast of changes internationally.
There are more analytic tools that have been scientifically developed;
some of them are highly complex. Tools available include the input-
output analysis, the GEM analysis or Porter’s Diamond Model. Again,
a purely statistical analysis will never be sufficient, as the primary
issue here is a complex system of actors and social contacts which
can only be captured systemically, i.e. through meetings, surveys and
various forms of joint reflection and review.

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for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 1/4 What potentials do we have?

STRENGHTS WEAKNESSES
▪ Strong cluster in terms of critical mass and competititveness of cluster ▪ Cluster firms strongly depend on demand of Tier 1 suppliers and OEMs as
firms; Good mixture of global suppliers and innovative start-ups well as on global trends. Only a few service other markets than
▪ Leading domestic R&D institutions located in the cluster; good parttern of Automotive
collaboration with industry ▪ Number of automotive firms in ABC is undercritical; ABC does not
sufficiently represent the automotive sector
▪ Good collaboration among the cluster firms established
▪ ABC is one of the most matured cluster initiatives in Tunisia with good ▪ ABC coordination is inactive; many firms don‘t feel to be part of ABC
international visibility ▪ Previous strong cluster community disappeared; many members of ABC
▪ Established governance structure, many members joined ABC long time are dissatisfied
before ▪ Competition between ABC and DEF hampers the further development of
networking community
▪ Good investment climate and business conditions for automotive sector,
incl. significant number of international investors ▪ Entire turnaround of ABC, incl. no coordination and strategy needed

▪ Tunesian suppliers focus on cable and mechatronic parts manufacturing, ▪ COVID-19 pandemic significantly hits Tunesian Automotive suppy sectors.
which will not be much affected to upcoming tranformation pattern in the Financial issues of the Tier1 and OEMs as well as lower global market
Automotive sector. This provides a stable investment climate. demand might push smaller firms out of international supply chains
▪ The ability to innovate and good technological competence of the ▪ Uncertainty as to how the markets will develop after COVID-19 will
companies should be sufficient to also diverge into other markets (medical hamper future willingness of OEMs to invest in Tunisia
technology, energy or electrical engineering).
▪ ABC will become increasingly insignificant or even vanish, if the cluster
▪ Comparably high degree of digitalization further provides a good base and coordinator does not succeed in reactivating the former network structures
flexibility to adapt to changing market needs ▪ Lack of network structures and missing experience to act together in times
▪ The COVID-19 crisis could be used to reduce the strong dependence of of crisis will hit the Tunisian automotive sector harder than those in other
cluster firms on the automotive industry countries

OPPORTUNITIES THREATS

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for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 1/4 What potentials do we have? * UNIDO. 2014.

EXAMPLE
Use cases of cluster analysis (1/4)

Cluster Mapping:
The Lacquerware Cluster in Bagan (Myanmar)
The Lacquerware Cluster Mapping nicely illustrates
how well the respective value chain is covered and how
the different actor groups are already linked together*.

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for Cluster
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Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 1/4 What potentials do we have? * Adetunji et al. 2017.

EXAMPLE
+ [incentives] Lagos as an ICT
Use cases of cluster analysis (2/4) hub in Africa
± [rules] national efforts to
improve ICT-related infa
- Limited local competition
Porter‘s Diamond: ICT cluster around Lagos (Nigeria) - Weak state capability
- Weak regulatory standards
In the current case, the diamond framework was used to analyze the
quality of the ICT business environment in Lagos. The four
determinants of business environment are demand conditions, factor
Context for
conditions, related industries and context for firm strategy and Firm Strategy
rivalry*. and Rivalry

- [physical infra]
unstable energy supply
+ [public sector] gov‘t pushing
- [human resources]
for better e-governance
limited human capital dev, low
Factor (Input) Demand + [private sector] emerging
quality of education, lack of Conditions Conditions middle class; growing local
ICT training
demand for digital products/
- [technological infra]
services
poor IT infrastrucutre
distribution

Related and
Supporting
Industries

- Limited local suppliers

- Limited related industries,
such as robust landline
services of ICT-related
hardware factories
- Lack of clusters

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Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 1/4 What potentials do we have? * GIZ Georgia. 2019.

EXAMPLE
Use cases of cluster analysis (3/4)

Value chain analysis: While analysing the value chain of the software industry, it has been
Software industry value chain in Georgia* very important to first understand what its main components are.
The main inputs of the software industry value chain have been
The main aim of the value chain mapping conducted within the
human resources, platform-specific software development
cluster development project, coordinated by GIZ Georgia, was to
environment (integrated development environment, including
understand where Georgia stands today in terms of its ICT sector in
compilers, debuggers, etc.), generic hardware or cloud services for
general and software development industry in particular and what
hosting the software. The existence of marketing, distribution and
are possible ways for Georgia to move up in global value chains.
after-sales support companies needed to be carefully addressed
during the value chain mapping.
The value chain analysis identified the following key areas which
would be the most crucial to focus on in connection with the support
of the ICT cluster development:
▪ Stimulation of emergence of new technology intensive companies
▪ Supporting digitalisation of existing industries
▪ Enhancing public procurement of innovative IT solutions
▪ Development of human capital

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Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 1/4 What potentials do we have? * Rocheska et al. 2015.

EXAMPLE
Use cases of cluster analysis (4/4)

Visualization of Georgia‘s ICT core value chain*

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Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 2/4 Who needs to be involved?

It is important to note that the steps and procedures to develop goals and strategic reversely, conducted separately in some parts, – differs from case to case. Moreover,
fields of action can vary depending on the starting position, pre-existing not all steps are equally relevant for different cases. For instance, instigators from the
knowledge, preconditions for cluster development and depending on the type of business sector would rather tend to skip a cluster mapping, if they are already familiar
instigator. Thus, the way how analysis and actors’ involvement are integrated – or, with their economic environment.

Step 2: Who needs to be involved?

+ + +
What potentials do we Who needs to be Which value added do How to develop a
have? involved? we want to create? strategy?

STAKEHOLDER IDENTIFY DEMANDS & BUSINESS MODEL

CLUSTER MAPPING
ANALYSIS NEEDS CANVAS

PREPARE
VALUE CHAIN MAPPING INVOLVE KEY ACTORS DEVELOP GOALS ORGANISATION AND
STRUCTURE

SWOT ANALYSIS RAISE AWARENESS CLUSTER STRATEGY

ACTION PLAN

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Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 2/4 Who needs to be involved?

Identification and involvement of key actors

Choosing the right partners is key
for the cluster initiation.
Sometimes cluster development starts with specific partners already
in mind, or the partners may got together first and then developed
the idea of engaging cluster development. However, the search for
potential partners is of upmost importance, but sometimes a quite
difficult task. At that stage it is important to find the right balance,
between identifying key actors and drivers for cluster development
on one side, but remain open for all interested parties to avoid the
impression the cluster approach is a closed shop.

The instigator matters. Do not underestimate objectors!

He or she is the story behind successful cluster development. Very often, there are parties that are critical or even against certain
Depending on the instigator, different ways of approaching and activities regarding cluster development. E. g. sector associations
gathering key actors are possible. Already existing business network are often against cluster development. They consider it as an
structures or business communities can be tapped. unnecessary and competing process since they see networking and
An important initial element at the beginning is attracting initiation of cooperation among local actors as their domain. And
promoters and multipliers from private and public sector, and they might be jealous that cluster initiators gain higher attention than
incorporating them directly into the initiation process. they gained.

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for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 2/4 Who needs to be involved?

Identification and involvement of key actors

The Stakeholder analysis as a tool NAME ASSESSMENT INFLUENCE DESCRIPTION MEASURE
to identify key actors Baden- NEUTRAL HIGH Programme owner of Inform them and
The stakeholder analysis is a promising tool to Württemberg cluster internationalisa- invite them to all
identify key stakeholder, the dynamics between International tion support scheme measures related to
them, the conflict sensitivity and mitigation international cluster
capabilities. It contains collaboration

▪ the identification of the stakeholder groups, Ministry for POSITIVE HIGH Programme owner of Taken as observer in
Economy many support schemes the project
▪ the assessment of their point of view (positive, Baden- for cluster development
neutral or even critical), Württemberg and responsible for S3
▪ their potential influence during the process, and implementation

▪ measures to be undertaken to keep and foster BioPro NEUTRAL MEDIUM Regional sectorial Invite them to
their support and engagement. agencies; dealing with Entrepreneurial
clusters in their sectors discovering workshops
and cluster events

Regional POSITIVE HIGH Strong role in regional Invite the strongest

Business development; Well RDA them to
Development connected to clusters Entrepreneurial
Agencies (RDA) discovering workshops

SMEs NEUTRAL HIGH Main target group; Keep them

have to become informed through
engaged in new close contact to
Anteja ECG. 2017. Stakeholder analysis in the frame of the EU innovation models cluster-initiatives
INTERREG S3-4AlpClusters project

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for Cluster
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Policy,
Policy,
Strategy
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and Implementation
and Implementation
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How to raise awareness and motivation

Initiating a first event / inauguration Event for initiation and awareness raising
After having identified key actors, a dialogue between the relevant An agenda for the first dialogue event may include
actors has to be initiated. This requires awareness raising for all the following items:
cluster actors (businesses, relevant organisations, administration
and politics) regarding the importance of clusters for
competitiveness and job creation. The goal of the first joint event is (1) Presentation of cluster potential (analysis of
to create a shared awareness and identity for the future cluster questionnaires and secondary data)
development. (2) Explanation of benefits which cooperation offers;
experience of existing clusters can be cited here
(3) Reports of businesses on their experience
How to prepare this event with existing forms of cooperation
The aim of such an event is often twofold: on the one hand you want (4) Analysis of existing and possible forms of cooperation
to raise awareness of the upcoming cluster development efforts and (5) Joint assessment of needs for support
to promote this undertaking. On the other hand, such an event is the (cf. ‘Which value added do we want to create’)
perfect platform to present results and findings gained during the
analytical phase. (6) Evaluation of existing or possible synergy effects
established through cooperation
In case there is an instigator or other key driver, such an event can
be used to present them and the rationale behind their commitment
to push the cluster idea forward. PARTICIPANTS:
Representatives of the relevant business sector, consulting,
academic and research institutions, business associations and
organisations, regional development agencies and ministries.

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Cluster
Development
Development
Guide – A Practitioners
Guide – A Practitioners
Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 3/4 Which value added do we want to create?

It is important to note that the steps and procedures to develop goals and strategic reversely, conducted separately in some parts, – differs from case to case. Moreover,
fields of action can vary depending on the starting position, pre-existing not all steps are equally relevant for different cases. For instance, instigators from the
knowledge, preconditions for cluster development and depending on the type of business sector would rather tend to skip a cluster mapping, if they are already familiar
instigator. Thus, the way how analysis and actors’ involvement are integrated – or, with their economic environment.

Step 3: Which value added do we want to create?

+ + +
What potentials do we Who needs to be Which value added do How to develop a
have? involved? we want to create? strategy?

STAKEHOLDER IDENTIFY DEMANDS & BUSINESS MODEL

CLUSTER MAPPING
ANALYSIS NEEDS CANVAS

PREPARE
VALUE CHAIN MAPPING INVOLVE KEY ACTORS DEVELOP GOALS ORGANISATION AND
STRUCTURE

SWOT ANALYSIS RAISE AWARENESS CLUSTER STRATEGY

ACTION PLAN

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Cluster
Development
Development
Guide – A Practitioners
Guide – A Practitioners
Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 3/4 Which value added do we want to create? * Meier zu Koecker & Christensen. 2012.

Understanding the interests of cluster actors

Cluster actors have different motivation the get
engaged
▪ Cluster actors, even those that join at the beginning have different
prevailing interests
▪ It is important to predict their interests accordingly
▪ Key drivers and actors are the key for successful initiation
▪ But there might also be so called “free riders” and reactive actors
who should not be left out during the initiation of a cluster. They
can assure critical mass and make positive “noise” during the
initiation process.
At the same time they should be treated with care and have
limited influence*.

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Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 3/4 Which value added do we want to create? * prepared by ClusterAgentur Baden-Württemberg.

Evaluating and prioritizing needs and demands

Understanding the demands of key actors However, not each demand is of same importance and not all key
actors share similar demands. A ranking can help to identify those
Understanding the demands of key actors is vital to ensure that they demands that matter and that are shared by a sufficient number of
remain committed during the cluster development process. key actors*.

HIGH
6
Number of actors sharing this demand
Unintended Effects Success
Qualification
7 8
18 Cooperation
MEDIUM

1
20 13 3 Business performance
4
11 Image & reputation
12 2
19
Consider to Terminate Corrective
Services Actions Needed 17
5 16
LOW

22 14 15 10
21

LOW MEDIUM HIGH

Importance of Expectations

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Guide – A Practitioners
Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 3/4 Which value added do we want to create? * VDI/VDE-IT. 2019.

EXAMPLE
From demands to key objectives of a cluster (1/2)

ICT Cluster Dakar, Senegal Key cluster objectives

Around 10 firms, supported by GIZ, decided to actively drive the
cluster development. Instigators and key actors were available right
from the very beginning, including a potential cluster organisation
(SenStartUp). Based on a third-party moderated process, the
prevailing demands of the key actors were identified and ranked.
Interestingly, although the key actors operated in different ICT-sub
sectors, the demand was very similar overall. This allowed to
deduce four future key objectives where the ICT Cluster Dakar will
focus on. This transparent process helped all actors involved to
understand how the future cluster objectives have been found*.

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for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
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EXAMPLE
From demands to key objectives of a cluster (2/2)

Prevailing demands

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Cluster
Development
Development
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Guide – A Practitioners
Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 4/4 How to develop a strategy?

It is important to note that the steps and procedures to develop goals and strategic reversely, conducted separately in some parts, – differs from case to case. Moreover,
fields of action can vary depending on the starting position, pre-existing not all steps are equally relevant for different cases. For instance, instigators from the
knowledge, preconditions for cluster development and depending on the type of business sector would rather tend to skip a cluster mapping, if they are already familiar
instigator. Thus, the way how analysis and actors’ involvement are integrated – or, with their economic environment.

Step 4: How to develop a strategy?

+ + +
What potentials do we Who needs to be Which value added do How to develop a
have? involved? we want to create? strategy?

STAKEHOLDER IDENTIFY DEMANDS & BUSINESS MODEL

CLUSTER MAPPING
ANALYSIS NEEDS CANVAS

PREPARE
VALUE CHAIN MAPPING INVOLVE KEY ACTORS DEVELOP GOALS ORGANISATION AND
STRUCTURE

SWOT ANALYSIS RAISE AWARENESS CLUSTER STRATEGY

ACTION PLAN

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Cluster
Development
Development
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Guide – A Practitioners
Guide
Guide
for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
 PART 2 › Initiation phase / Step by step / Step 4/4 How to develop a strategy? * Training course for SenStartup, prepared by VDI/VDE-IT.

The Cluster Business Canvas Model*

NAME CLUSTER ORGANISATION DATE

Member Key Key Member Value Key

Segments Partners Activities Pain Points Propositions Resources
▪ What different types ▪ Who are our key ▪ What key activities ▪ What are the biggest ▪ What is the benefit we ▪ What key resources
of cluster actors do partners needed and do our value pro- problems and pains offer to our members? do our value
we have? which key activities positions require? our members have? propositions require?
do they perform? ▪ What are positive
▪ How would we ▪ What activities and ▪ What are jobs the outcomes the ▪ How can our cluster
categorise our ▪ Which key resources services do we want members need done? members want to see? provide these
cluster actors into do we acquire from offer to our cluster resources?
different groups by partners? actors?
size, needs, market
readiness etc.?

Member Cost Revenue Key

Relationships Structure Streams Challenges
▪ What type of relationship do our ▪ What are the most important costs ▪ For what services are our cluster ▪ What are the key challenges of
cluster actors expect us to establish inherent in our cluster organisation? actors willing to pay? our cluster organisation in the next
and maintain with them as well as 3 years?
amongst them? ▪ Which key resources and key ▪ How can our cluster actors or others
activities are the most expensive? contribute to our cluster organisation? ▪ What are the key challenges of our
▪ How are the cluster actors cluster actors in the next 3 years?
integrated in our cluster activities? ▪ Are there other financing options,
e.g. public funding?

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for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
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Goal-setting process for the cluster strategy

Based on the results of the various analyses, a shared vision, joint In setting goals, the following points should be considered:
goals and lastly a common strategy can be defined. The goal- ▪ Working on setting common goals should start as early as
setting process creates the needed foundation to collaborate possible.
trustfully. The set of goals represents the intersection of often widely
differing interests of potential cluster actors. Clear goals are ▪ Working on developing a strategy and other cluster activities can
essential for a common understanding of the forthcoming tasks in only start once there are clear goals.
cluster development, and for planning and implementing the ▪ To ensure specialisation and profile formation for the cluster, the
necessary measures. This method – often referred to as goals should not be too broad.
Management by objectives (MBO) – proved its value not only in
▪ As clusters evolve constantly, the thematic focus should also not
individual businesses but also in clusters.
be too narrow and leave space for further development and
transformation.
▪ Goals should be formulated as precisely as possible, to allow for
derivation of concrete measures and activities.
▪ Goals should be attainable and measurable. Develop indicators!
▪ The goal setting process should be a moderated process involving
all cluster members. Create identification with goals!
▪ The goal setting process is a strategic management responsibility.

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for Cluster
for Cluster
Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
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Goal-setting process for the cluster strategy

Setting individual goals depends crucially on what kind of goals, as part of a reorientation of a cluster. To emphasise the particular
desires and expectations members associate with the cluster. importance of goals as a joint basis and roadmap for cluster work, a
Several clusters – for example, the German competence networks – cluster’s most important goals should be defined in the association
are more concerned with strengthening innovation capacity, while articles or terms of reference
others focus on lobbying or certain market activities (exporting).

Typical goals in numerous clusters are:

▪ Promoting innovation
▪ Joint marketing
▪ Export promotion, developing new markets,
building international alliances
▪ Joint procurement and/or sourcing
▪ Providing and using services to businesses (cluster services)
▪ Training and Continuing Professional Education (CPE);
skills development
▪ Utilising synergies and economies of scale
▪ Lobbying
Monitoring is vital (see section “Monitoring & Evaluation”) to review
goals for current relevance at regular intervals and, if necessary,
revise and adjust the goals.
It might be necessary to reconsider and reformulate existing goals

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for Cluster
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Policy,
Policy,
Strategy
Strategy
and Implementation
and Implementation
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Developing a cluster strategy

Once the joint goals of the cluster have been defined, the next stage This brings up questions on the strategy’s content and structure:
focusses on deriving a strategy based on these goals. Formulating how does one put a strategy together? What aspects should it
such strategies is a crucial task, particularly in the initiation phase of cover? And, how much detail is needed?
a cluster, as it paves the way for achieving the defined goals and the
measures. Again, strategic development should actively involve all Components of a cluster strategy
(potential) cluster actors to make sure that the final outcome is a
joint product that is commonly accepted. Insights from previous analysis and work, such as a cluster
mapping, the analysis of potentials and the defined goals need to be
well integrated in the strategy.
Purpose of a sound and consensus-based strategy
Furthermore, the following sections should be covered:
Without a clear strategy there is the danger that the cluster might get ▪ Definition of the cluster’s range of outputs and services
caught up in action for its own sake, that joint activities might not be ▪ Organisational structure
coordinated and goals not be achieved. ▪ Implementation strategy (steps)
By contrast, a strategy establishes a common direction for joint work ▪ Monitoring & evaluation (M&E)
and allows for a goal-oriented approach to cooperation. The strategy ▪ Action plan
makes it possible to moderate and plan the process of shaping the Once the cluster strategy has been formulated, it has to be
future for cluster members. operationalised into well defined work items. A useful tool in
If the strategic alliances particularly feature SMEs, which are often strategy implementation is an action plan which operationalises the
under enormous competitive pressure, a too visionary approach is goals and measures expressed in the strategy. An action plan is
not advisable for the development of a cluster strategy. Instead, obtained by deriving explicit activities from the goals in the strategy
questions of strategic management should focus on how to improve and assigning them to specific individuals responsible for
the competitiveness of cluster members and a concrete action plan implementation. In addition, a specific timetable is set for the
(operational strategic orientation). In the interests of sustainable individual tasks and activities, together with the results to be
competitiveness, a strategy is also a tool to define a cluster as a achieved – so-called “deliverables”. Milestones are set for achieving
flexible organisation able to learn and to adapt to changing market particularly important results of implementation, which help to closely
conditions and innovations. monitor processes and success.

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EXAMPLE
Cluster Strategies (1/2)

Strategic framework of the Plastic Cluster Ivory Coast ▪ The cluster actors also expressed an interest in creating inroads
into increased use of bioplastics, acknowledging these as an
The cluster mapping and sector analysis showcased a diverse
important new frontier of the plastics economy in the short and
number of actions that combine opportunities to increase the
medium term.
competitiveness of the Ivorian plastics cluster, while at the same
time reducing the environmental impact of the sector as it grows. ▪ Together, the potentials of increased competitiveness and the use
of bioplastics aggregate to create a new and dynamic cluster for
Cote d’Ivoire’s plastics economy, grouped under the following key
strategic objectives:
(1) Diversification towards higher value-added and sustainable
plastic products
(2) Modern manufacturing technologies to facilitate new plastics-
based solutions
(3) Improving the economics for plastic recycling.
▪ These strategic objectives need to be underpinned by a cluster
policy that encourages investment and innovation, while also
ensuring that Côte d’Ivoire’s plastics economy becomes truly
circular and environmentally sustainable*.

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EXAMPLE
Cluster Strategies* (2/2)

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LESSONS LEARNED
common reasons why cluster initiation efforts can fail
(1) Policy-driven cluster initiation However, the strategy was written by external consultants without
involving relevant cluster actors. Whereas the designated cluster
Policy involvement in cluster initiation is important and can be of actors believed the new cluster initiative would support them in
critical help. However, some cluster development cases involving export promotion, the consultants’ strategy focused on networking
“political hot topics” can present certain policy level challenges. For and skills development. Since this was not what the designated
example, attempts to initiate “e-mobility” clusters in Northern cluster actors expected, the momentum came to a halt, including the
Germany were not successful. The initiation phase was never cluster development initiative itself.
successfully completed due to the lack of a critical mass of cluster
actors.
(4) Strategy too ambitious
(2) Missing financial model While strategy development is important, planned achievements
must realistic. There are some cases in which the development
Financial aspects play an important role during all phases of strategy is too complicated to be implemented under existing
development. Many cluster initiatives have been suspended due to a framework conditions. When “quick wins” are also missing, cluster
lack of investors. While the initiation phases normally reveal multiple actors may lose interest in cooperation within a relatively short
demands and ideas from the respective cluster actors, the capacity period of time and will lack commitment.
of a cluster organisation itself is insufficient to satisfy all needs. This
can trigger disappointment of cluster actors and consequently a
certain inactivity of a cluster. (5) Important stakeholders not involved
There was another case in the maritime sector in Asia, where the
(3) Missing involvement of cluster actors in strategy cluster initiation missed to conduct a sound stakeholder analysis.
development The regional industrial shipping association was not involved.
Consequently, it considered the cluster to be initiated as a
In Latin America, there was a cluster initiation project that mobilized competitor and the association lobbied successfully that this cluster
many potential cluster actors. All preparatory actions went well. initiative was never to be implemented.

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LESSONS LEARNED
common reasons why cluster initiation efforts can fail
To briefly sum up key factors:

DOS DON’TS

▪ Start and proceed incrementally and don’t expect too much ▪ Do not initiate a mere policy-driven cluster without the
too early. commitment of the private sector.
▪ Identify and involve a group of relevant key actors from private ▪ Avoid depending too much on the interests of one (large)
and public sectors right at the beginning. company.
▪ Remain transparent and open for any further interested parties. ▪ Do not start without a sound analysis.
▪ Conceptualize a first rough idea of a management and financial ▪ Avoid a “closed shop character” of the core group and its
model to be able to meet the actors’ needs. activities.

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 PART 2 › Initiation phase / Step by step / Step 4/4 How to develop a strategy? * Information provided by GIZ Ethiopia.

EXAMPLE
Lessons learned (1/2)

Textile Clusters/Industrial Park Development in Ethiopia

SUCCESSES CHALLENGES LESSONS LEARNED

▪ The Ethiopian government managed to ▪ Workforce: Industrial culture in Ethiopia is ▪ One needs to engage a mix of strong, local
attract numerous international investors underdeveloped, which is why the public and private partners that can create the
into the country through a large set of workforce requires additional services, right political framework. This includes creating
incentives and investment promotion. The trainings and awareness raising. incentives for investors and establishing the
incentives included tax holidays, duty free ▪ Spillover effects: Until now, the parks in necessary infrastructure (e.g. logistics,
imports, and special export services. Ethiopia remain mostly isolated in their electricity, and similar amenities).
▪ To increase sustainability in the work and have little economic connection ▪ In order to realize the full potential of industrial
manufacturing sector and particularly in to the surrounding economy. parks or clusters, the private sector needs to be
industrial parks, infrastructure investments ▪ Value creation: The textile value chain is enabled to take advantage of new opportunities.
have been partly directed towards the not well developed in Ethiopia. Hence the On one hand, the right political framework is
establishment of functional wastewater export value chain is externalized and needed in order for local companies to deliver
systems and renewable energy. leaves very little value added in the products and services to clusters. But also,
country. investments and incentives are needed along
the supply chain in order to achieve higher
▪ Covid-19 in 2020: The pandemic is a value*.
challenge for production in the clusters and
also for the brands. Orders are decreasing
and therefore the whole sector in Ethiopia
is endangered.

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 PART 2 › Initiation phase / Step by step / Step 4/4 How to develop a strategy? * Information provided by GIZ, Senegal and CGER.

EXAMPLE
Lessons learned (2/2)

CGER Network: A cluster of rural enterprises in Senegal

SUCCESSES CHALLENGES LESSONS LEARNED

▪ In 2004, the Centres de Gestion et ▪ Today, there is increased interest on the ▪ The CGER network, while not being a cluster
d’Economie Rurale (CGER) was created part of the CGER to fill a huge gap in the per se, takes on all these characteristics:
with the objective of improving the market of networking and management (1) its geographical scope is defined to four
technical and financial management of consulting dedicated to rural businesses. departments of the Senegal river valley;
smallholder farmers and agri-businesses. Importantly, the degree of involvement of (2) it is targeted at a specific sector – rural and
Nowadays, it is a resource centre the professionals and the members is key agri-businesses;
dedicated to the coordination and training to its social credibility and overall (3) it has a dedicated management unit; and
of members, to increase access to finance sustainability. (4) its aim is to improve growth potentials,
and to provide studies on the intersection ▪ Despite the fact that financial sustainability productivity and innovation capacity of member
of technical and economic developments has increased in the recent past, the main organisations. Thus, the cluster-like approach
for its 120 private company members. challenge is to further increase its financial has helped nevertheless.
▪ Although financially supported since its autonomy and independence from other ▪ There has been long term support since it’s
creation, the CGER network has continued institutions. Further challenges are: inauguration by Société d’Aménagement et
to increase its financial autonomy through › Improving the quality and productivity of d’Exploitation du Delta (SAED) and the
the invoicing of these services, thereby current services and enhancing the level of Government of Senegal which helped CGER to
reaching around 40 % of financial expertise of staff members. continuously develop.
autonomy › Supporting the development of a ▪ Professional network and cluster management
formalized offer of consulting services to was key to the provision of services that were
agricultural and rural enterprises. requested by members*.
› Management consultancy to professional
organisations, firms and farmers.
› Networking and matchmaking services.

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FURTHER READINGS
▪ Adetunji, B., Seol, B., Lohmann, J., Sljivancanin, J. & Bryman, P. ▪ Meier zu Koecker, G. & Dermastia, M. 2018. Cluster Mapping
2017. Microeconomics of CompetitivenessFinal Paper Lagos ICT Synthesis Report Phytopharmaceutical Industry. EU INTERREG
Services Cluster. Retrieved from DanuBioValNet Project. doi: 10.13140/RG.2.2.20871.09126.
[Link] ▪ Meier zu Koecker, G. & Christensen, T. 2012. A Novel, Game Theory-
harvard/Documents/pdf/student-projects/Lagos_ICT_2017.pdf, Based Approach to Better Understand Incentives nd Stability of
[accessed July 2020]. Clusters, Insitute for Innovation and Technoloy Berlin and Danish
▪ Buhl, C., Meier zu Koecker G. & Sedlmayr, B. 2019. Life Science Nord Agency for Science and Technology, Copenhagen, retrieved
Cluster Strategy 2014. Retrieved from from [Link]
[Link]
▪ Porter, M. 1997. Clusters and Competition: New Agendas for
uns/Unsere%20Organisation/LSN%20Cluster%20Strategy%202024_e
Companies, Governments, and Institutions, Harvard Business School.
[Link], [accessed July 2020].
▪ Rocheska, S., Angeleski, M. & Mancheski, G. 2015. A new
▪ Ffowcs-Williams, I. 2016. Cluster Development Handbook. methodological approach for designing the software industry value
▪ GIZ Georgia. 2019. Georgian ICT value chain analysis – Final Report. chain. Ecoforum Journal, Vol. 4, No. 2.
▪ GIZ Georgia. 2020. Georgian ICT Cluster. URL: ▪ Sedlmayr, B., Buhl, C. & Meier zu Koecker, G. 2019. Trend Report -
[Link] [accessed September 2020]. Development dynamics of cluster initiatives in Germany over time.
Retrieved from [Link]
▪ Ketels, C. 2017. Cluster Mapping as a Tool for Development. Working
docs/17e11695863b4a67b419f8585d674dfa_Trendatlas-
Paper, retrieved
Entwicklungsdynamiken-Clusterinitiativen_2019.pdf.
from [Link]
pping_as_a_Tool_for_Development. ▪ United Nations Industrial Development Organisation (UNIDO). 2014.
▪ Institute for Innovation and Technnology (iit). 2016. Business Services Diagnostic Study on a Lacquerware Cluster in Bagan and Nyaung-U,
offered by Cluster Organisation. Myanmar. Retrieved from
[Link]
▪ International Finance Cooperation. 2019. Plastic Sector 05/Diagnostic_Study_on_a_Lacquerware_Cluster_in_Report_0.pdf,
Competitiveness Strategy Ivory Coast. Invest West Africa: Ivory Coast [accessed July 2020].
Manufacturing, under publication.

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 PART 2 › Establishment phase

OVERVIEW OF PART 2:
ESTABLISHMENT PHASE

▪ Introduction
▪ Step by step process for establishing cluster structures
› STEP 1: How to operationalise the strategy?
› STEP 2: How to form the organisation?
› STEP 3: Which services and activities to implement?
› STEP 4: How to monitor progress?
▪ Further readings

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From initiating to establishing cluster structures

Clusters are mostly heterogeneous systems consisting of diverse actors, interests and needs. Information and communication fl ows,
cooperation activities and cluster services need to be well structured and well organised. Viewed in this manner, the organis ational structure
and service portfolio of a cluster is of central importance. Its constitution as a formal organisation with rules for coopera tion provides the
cluster with its binding nature while assuring transparency and accountability for its participants.

10 KEY QUESTIONS questions when establishing a cluster structure?

(1) How does one get started with the implementation of the (6) How does one organise organisational processes?
strategy? (7) Which services does one want to offer in order to address
(2) How important is the organisational structure for the cluster? cluster goals and actors’ needs?
(3) What requirements does the organisational structure have to (8) How does one communicate cluster goals, benefits and offers?
meet? (9) What is the role of cluster policy at this development stage?
(4) Which legal form is most suitable for our cluster? (10) How does one set up a sound but lean and easy-to-handle
(5) How does one organise governance and a cluster management monitoring and evaluation system?

KEY ACTIONS After having developed a strategy, it has to be implemented. The following key actions are crucial to create a dedicated
structure for targeted cluster activities to follow. The sequence is not fixed and may vary from case to case.

1 2 3 4
Setting up a
Formulating a Building an
Developing cluster monitoring and
commonly agreed organisational
services evaluation
action plan structure
mechanism

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Step by step process for establishing cluster structures

As depicted, the establishment of a cluster requires an action plan, a consistent organisational structure, a strategically o riented service
portfolio and a proper monitoring and evaluation system. These form the foundation the actual cluster work.
The following four key questions provide guidance and contain relevant methodologies and approaches for the implementation.

+ + +
How to operationalise How to form the Which services and How to monitor
the strategy? organisation? activities to implement? progress?

ACTION PLAN LEGAL FORM FIELDS OF ACTION MONITORING SYSTEM

FINANCIAL PLAN GOVERNANCE DEVELOP SERVICES

STAFFING MARKETING & PR

AGREEMENTS WITH
KEY ACTORS

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Step by step for establishing cluster structures

Cluster development strategies should not be static. They should enable a dynamic evolution of the clusters is a basic prerequisite for the clusters’ (and its actors’) ability
development of a cluster and the long-term competitiveness of its actors. The strategic to adapt flexibly to changes in both internal and external conditions (markets).

Step 1: How to operationalise the strategy?

+ + +
How to operationalise How to form the Which services and How to monitor the
the strategy? organisation? activities to implement? progress?

ACTION PLAN LEGAL FORM FIELDS OF ACTION MONITORING SYSTEM

FINANCIAL PLAN GOVERNANCE DEVELOP SERVICES

STAFFING MARKETING & PR

AGREEMENTS WITH
KEY ACTORS

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Implementing an action plan

Once the cluster strategy is formulated, it must be turned into well ▪ The action plan should be reviewed periodically to assure timely
defined work items. A useful implementation tool is the action plan and complete implementation.
which serves to operationalise goals and measures expressed in the ▪ In the case of very large and complex cluster structures, it may
strategy. An action plan is obtained by deriving concrete activities also be helpful to set up a steering group to help with decisions for
from the goals articulated in the strategy and assigning them to long-term goal setting and strategy development.
specific individuals responsible for implementation. In addition, a
specific timetable is set for individual tasks and activities together
with the results or “deliverables” to be achieved. Milestones are set Structure of action plan (extract):
for monitoring particularly important steps of implementation.
The following points in particular should be considered:
▪ Implementation should be done in small but very operational steps
which do not overly strain the parties involved.
▪ The first activities should be those that promise quick wins and
thus promote a shared sense of success among the cluster actors.
▪ It is necessary to clearly define responsibilities.
▪ Key cluster actors should be involved in implementing the strategy
and everyone should make a contribution where needed.
▪ Deadlines should be kept as rigidly as possible.
▪ It is helpful to define interim goals and corresponding milestones
along the way to achieving the overall goals for the cluster. This
combines operational concreteness with maximum possible
flexibility for future developments.

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 PART 2 › Establishment phase / Step by step / Step 1/4 How to operationalise the strategy? * Meier zu Koecker. 2009.

Financial planning is key for sustainability

Sufficient financing of cluster development is important. Solid Sustainable financing has a clear impact on cluster development
financing is a fundamental prerequisite for a cluster’s ability to and growth. The figure below is based on a survey of 90 clusters in
perform successfully in the long term. Considerations of financial Germany*.
resources and planning are crucial and should start in the initial It reflects future growth in terms of size. Two groups are compared:
phase when using a Business Canvas Model. Practices reveal that those with a sustainable financial situation (bottom) and those for
changing the financial model later will be difficult. which financing is not assured (top).
Planning and implementing the financial concept should be
done in a number of stages:

1. Identifying the cost 2. Drawing up financial 3. Installing a functional

structure planning accounting system

Determining the expected costs The goal of financial planning is to This involves systematic
for the cluster development ensure liquidity at all times. A recording, processing, analysis,
activities is the starting point for financial plan is drawn up by evaluation and presentation of
subsequent costing and forecasting the income and figures for all economic aspects
planning. This essentially expenditure for the planning period of the cluster development.
involves answering the question (e.g. 12 months) and calculating the Operating accounts are
relating to the cost structure. difference. A financial plan is used comprised of financial accounts,
Typical cost categories for a to determine the cluster’s financial cost accounts and planning
cluster are personnel, rent, and capital costs along with projections.
operating supplies, equipment projected income flows. Gaining
and others. Additional costs clarity about the sources of
which often arise in the financing for the cluster
formation and start-up phase of development is also very important.
a cluster must also be taken into Membership fee structures must be
account. sufficiently well calculated in order to
cover these costs.

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Relevant financing sources

To achieve joint goals and common competitive advantages for the Starting in the initiation phase, it is necessary to consider what kind
cluster actors, cluster development needs solid and sustainable of financing mix is the most suitable to assure sustainable cluster
financing. As a result, securing suitable sources of finance is a development and to meet the objectives and demands identified in
matter of crucial importance for cluster management. We can the analytical phase. Governmental promotion programmes might
distinguish between three main sources of financing: baseline be an option, but they are not always the perfect solution. Cluster
funding, private financing sources and project-related financing. development which is only financed by private sources presents its
own set of challenges. Such networks tend to turn into commercially-
driven interest groups and compete with other private businesses for
financing. In the end, the mixture matters. If cluster development is
considered as a tool to develop competitiveness of the region, public
interest will continue to promote public co-investments.

A typical financing structure of a cluster development draws on the following sources:

BASELINE SUPPORT PRIVATE SOURCES PROJECTS

Mainly public co-financing by ▪ Membership Fees There is a trend that
national, regional and local ▪ Fee-based Services governmental institutions
governmental institutions. ▪ Sponsoring appoint cluster organisations to
perform dedicated tasks or
projects. Related efforts
needed to conduct such tasks
or projects are reimbursed.

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 PART 2 › Establishment phase / Step by step / Step 1/4 How to operationalise the strategy? * Recent findings from European Cluster Secretariat and VDI/VDE-IT, unpublished

Financing patterns around the world (I)

The financial sources and their composition vary significantly from Cluster development in the EU has been high on the policy agenda
region to region. The European Secretariat for Cluster Analyses for many years. Thus, the public financing share is comparably high.
(ESCA) continuously benchmarks and measures indicators relevant Private funding streams play an important role, too: Membership
for cluster development. The figures below indicate typical financing fees make one quarter of the overall financing mix.
patterns for clusters around the world. As far as Latin America is concerned, there is a well-balanced
Cluster development in the MENA region started in 2010 and was mixture of public and private financing for cluster development.
strongly subsidized by third-party donors. Even 10 years later, there Private financing is relatively important. The patterns look similar to
are still high public funding streams involved (58 %). Private those of Europe. This is not a big surprise, since the Latin American
financing through membership and/or service fees only plays a cluster approach is similar to the European ones.
minor role. These figures are well in line with first findings from the Public support of cluster development in Middle East Asia is higher
Cluster Observatory Africa (financed by SI Jobs, GIZ). than in Latin America. While private financing is rather low, other
sources account for a large proportion of the financing portfolio*.

TIME PERIOD: 2017 – 2020, NUMBER OF CLUSTERS OBSERVED IN TOTAL: 420

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Financing patterns around the world (II)

Different financing structures also result in different degrees of Similarly, the cluster landscape in Middle East Asia is characterized
financial security of cluster organisations. This has significant by a high proportion of clusters (50 %) being secured in the long
influence on cluster development since the development of a term as well as in the short and medium term (29 %). While private
strategy and the establishment of need-based services and projects financing is of higher relevance than in the MENA region, it is still
strongly depend on financial sustainability. The figures below show comparably low.
some interesting regional patterns which are especially relevant for By contrast, cluster policy in the EU has been established for a
the time before COVID-19 pandemic. longer period of time. Initial public funding has been reduced and
Looking at the MENA region, there is a clear correlation between the instead established clusters have been required to stand on their
level of public funding on the one hand and long-term funding own by building private financing structures*.
security on the other hand. This is due to the fact that cluster
development is a relatively young phenomenon in which the focus is
mainly on capacity-building.

TIME PERIOD: 2012 - 2019 TIME PERIOD: 2010 - 2020 TIME PERIOD: 2012 - 2019 TIME PERIOD: 2012 - 2019
NUMBER OF CLUSTERS NUMBER OF CLUSTERS NUMBER OF CLUSTERS NUMBER OF CLUSTERS
MEASURED: 16 MEASURED: 945 MEASURED: 53 MEASURED: 44

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Determinants ensuring sustainable financing

There are some more financing options for cluster development.
The following overview shows different levers to be taken into consideration when building or updating the financing portfoli o.

FINANCING OPTIONS

Membership fees Fee-based services sponsoring Publicly funded projects

▪ Acquiring more members ▪ New fee-based services ▪ Donation without ▪ Local

▪ New kind of members ▪ New pricing of existing compensation ▪ National
▪ Increased membership fees services ▪ Sponsoring with ▪ Regional
compensation
▪ New pricing model

The case of Business Upper Austria, shown on the following slide, serves as a best practice example for a sustainable financing model.

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 * Business Upper Austria. 2021.
PART 2 › Establishment phase / Step by step / Step 1/4 How to operationalise the strategy?

EXAMPLE
Ensuring sustainable financing* (1/3)

Business Upper Austria, a regional economic development agency

from Austria, has gathered a set of regional cluster initiatives since
the 1990s in its department Cluster & Cooperation.
A well-balanced mixture of public and private financing was at the
core right from the very beginning and one of the main reasons for
successful cluster development, besides professional cluster
management.
Insight in financing mix of Cluster & Cooperation

Public
Funding
~39 %

Annual
Partner Cluster &
Fees Cooperations
~25 %

Services
&
Projects
~36 %

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PART 2 › Establishment phase / Step by step / Step 1/4 How to operationalise the strategy?

EXAMPLE
Ensuring sustainable financing* (2/3)
Revenues of the Mechatronics Cluster 2017 (Clusterland Upper Austria)
• Conferences
• Quarterly Media 7.747,00 • Expert-meetings
• Partner Profiles • Workshops
• Company Visits, etc. • Events, etc.

• Project Initiation 126.316,73

• PM-services 167.003,58
• Moderation of Experience
Exchanges • Information Materials
56.517,26 • Exhibitions
• Stands, etc.

• Cluster advisory board 180.710,50

• Membership fees 150.453,89
• Internal organisation
• Cooperations with other regions • Participation on
international projects
• Exhipitions, etc.

Total: 688.748,96
Information & Communication Qualification & Training Markteting & PR
Internationalisation Internal incl. Membership Fees Cooperation

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EXAMPLE
Ensuring sustainable financing* (3/3)

As common pattern, all cluster initiatives started with a low share of private revenues. It took, like in other cases, around five years to
significantly increase private incomes. The case Cluster & Cooperations (Business Upper Austria) also reveals that even the
excellent cluster initiatives, the plastic cluster (KC) or Automotive (AC) need public -cofinancing of 20 – 30 %.

100,0%
90,0%
80,0%
70,0%
60,0%
Selffinancing in %

50,0%
40,0%
30,0%
20,0%
10,0%
0,0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

AC KC MHC MTC MC NDM

NHR UC /CTC NREE ITC SWPH LC

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Step by step for establishing cluster structures

Cluster development strategies should not be static. They should enable a dynamic evolution of the clusters is a basic prerequisite for the clusters’ (and its actors’) ability
development of a cluster and the long-term competitiveness of its actors. The strategic to adapt flexibly to changes in both internal and external conditions (markets).

Step 2: How to form the organisation?

+ + +
How to operationalise How to form the Which services and How to monitor the
the strategy? organisation? activities to implement? progress?

ACTION PLAN LEGAL FORM FIELDS OF ACTION MONITORING SYSTEM

FINANCIAL PLAN GOVERNANCE DEVELOP SERVICES

STAFFING MARKETING & PR

AGREEMENTS WITH
KEY ACTORS

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Why is the organisational structure so important?

Cluster organisations often have the mandate to operationalise Another key requirement is the ability to respond to the needs of
cluster development in a specific region once a critical mass of cluster actors. In today’s highly competitive and globalized markets,
actors is engaged. From this point, it is often called a “cluster the structure must be capable of fast and appropriate reactions to
initiative” to illustrate that there is a common effort on the part of the various demands (rapid response capability). This is particularly the
cluster actors and the cluster organisation to develop a cluster. case for clusters with a strong market orientation. The cluster
Partly, management units of industrial parks or Special Economic organisation must also be integrative and open enough to integrate
Zones also have the task to initiate networking, cooperation, trust a large number of different competence partners and actors. At the
building or related cluster development. Regardless of what kind of same time, it must remain exclusive and selective enough to ensure
cluster development entity is selected, the organisational structures stable cooperative structures and a high quality of the member firms
and governance structure matter significantly. (keyword: brand formation). Accordingly, the organisational structure
is subject to conflicting pressures. This means that the
Organisational structures also define the cluster’s functions and multifunctionality of clusters can only be delivered by forms of
benefits for its cluster actors. They help cluster actors to identify organisation that are created specifically for this purpose. Adequate
themselves more strongly with their cluster. This promotes the human resources are essential here for the functionality of the
emergence of a certain “corporate identity”. The organisational cluster.
structure also plays a key role for efficient structures and
communication among cluster actors. The choice of legal and organisational form depends on the
goals of the cluster and specifically on the answers to the
Central elements of a cluster’s organisational structure are: following three questions:
▪ Structure (Competences and communication pathways: Who is (1) How closely do the partners in the cluster wish to cooperate?
responsible for what in the cluster?)
(2) What is the role of commercial activities in the cluster?
▪ Systems (Organisation of operations: How are processes and
procedures formally organised in the cluster?) (3) How quickly should new members be integrated – exclusivity
versus inclusivity?
▪ Legal entity (What is the legal status?)

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Determining the legal form

Generally speaking, clusters whose primary goal is the joint
implementation of commercial activities need a different legal
and organisational form compared to clusters focusing on
research and development. The rule is “structure follows
strategy” or put differently “form follows function”.

BUSINESS ACTIVITIES / COMMITMENT

Some possible legal forms for clusters are:
Joint Stock
▪ Cooperation agreement Company

▪ Association (non-profit or for-profit) Ltd. Hybrid

▪ Private limited company (Ltd) Organisation

▪ Foundation
▪ Corporation
▪ Joint stock company
▪ Hybrid forms (mix of association and
private limited company)
Foundation Association
Cooperation
Agreement

NUMBER OF CLUSTER MEMBERS / EXTENSIBILITY

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Comparing most common legal forms of cluster initiatives

COOPERATION
ASSOCIATION FOUNDATION LTD CORPORATION
AGREEMENT

▪ No specific ▪ The granting of legal status ▪ Assets that are ▪ Certain amount of founding ▪ Certain amount of founding
PRECONDITION

pre-conditions to the association by the permanently appropriated capital needed capital needed
registry of associations and made independent
presupposes an idealistic and whose income serves
objective of the association at least one defined
purpose*

▪ Low efforts and ▪ Low formation efforts ▪ Often complements ▪ Promotes commercial ▪ Promotes commercial
commitment needed ▪ No minimum capital associations activities activities
▪ No capital investment required ▪ Independence in the use of ▪ High level of commitment ▪ High level of commitment
ADVANTAGES

needed ▪ Large number of members the foundation's assets needed needed

▪ Can easily be cancelled can be involved ▪ Sustainable securing of ▪ Difficult to leave ▪ Difficult to leave
▪ No official registration financing through the ▪ Signatory becomes ▪ Signatory becomes
needed foundation's assets company owners shareholders
▪ Allows many partners
to sign up
▪ Relatively low ▪ Commercial activity only as ▪ Approval from the ▪ Relatively high formation ▪ Shared capital required
commitment a secondary purpose responsible state authority effort
DISADVANTAGES

▪ Tax obligations
▪ Not a legal entity ▪ Relatively low commitment required ▪ Shared capital required ▪ Statutory accounting and
▪ Registration in the ▪ Statutory accounting and disclosure requirements
foundation registry disclosure requirements ▪ No direct influence from
shareholders (i.e. cluster
actors)

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Cluster governance structures

The important thing about a cluster‘s structure is to determine ▪ Committed cluster actors
competence and communication pathways, i.e. , who is responsible During the initiation phase of the cluster, many stakeholders and
for what, and how information and messages flow between the actors are typically involved. However, this does not automatically
various departments and members. Basically, this explains the mean that they are all committed in contributing to the joint effort
difference between a “cluster” as naturally given phenomenon of of developing a cluster further. Once there is a common
agglomerated actors and the structured effort intended to develop a agreement to jointly spend efforts for designated cluster
cluster further (cluster initiative). For the latter one, a dedicated development, there is a need for stakeholders to commit
governance structure is needed. themselves to contribute to cluster development. From that point
on, they can be called cluster actors or cluster members. The
Classic structures with the following elements have proven latter one is used in those cases in which a cluster effort (cluster
their value in practice to date: initiative) has a dedicated legal form (e. g. association).
▪ Steering committee / Advisory board
Steering committees or advisory boards represent the highest Indicators for good cluster governance are:
level of cluster governance and are intended to guide and monitor ▪ existence of a legal form is an important indicator for good cluster
the cluster development. governance, since it demonstrates a certain level of commitment;
They provide guidance for the cluster management to assure that ▪ clear definition of tasks and responsibilities of the cluster manager
the aims and objectives are met. They also serve to represent and / management team and of interfaces / communication with
promote the cluster initiative vis-à-vis external parties. steering committee members;
▪ Managing office (cluster manager) ▪ existence of a governing body such as a steering committee or
Staff working in a cluster organisation and in charge of the advisory board to conduct decision-making and support the cluster
operationalisation of the cluster strategy is called cluster management in implementing the action plan, as well as to survey
management. It consists of one or more persons working closely and review the progress of the cluster development;
with the steering committee and cluster actors. They implement so
called “services”, and dedicated activities designed to promote ▪ regular meetings and participatory approaches to involve cluster
trust building, networking, innovation, skills development and more. actors / members in decision-making processes and strategy
orientation.

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 PART 2 › Establishment phase / Step by step / Step 2/4 How to form the organisation? * Information provided by GIZ Albania.

EXAMPLE
Cluster governance structures (1/2)

WICA-Wood Industry Cluster of Albania* The organisational structure of WICA consists of the following bodies:
WICA is established as a non-profit organisation in the form of an A. The general assembly of the members of the association
association and is registered as such in the Tirana Judicial District
The general assembly of the members of the association is the
Court in accordance with Albanian legislation. In pursuit of its
highest decision-making body of the association. It consists of all
interests, WICA’s activities include the development and promotion
members approved by decision of the executive board.
of partnerships as well as joint presentations in foreign markets to
increase investment, productivity and export promotion. It also B. The executive board of the association
organizes trainings on new technologies and development of The general assembly elects the members of the executive board
managerial and production skills. It stays abreast of the latest world for a term of up to four years with a renewable mandate. The
trends and experiences in the wood industry through the creation of executive board consists of seven individuals who can be elected
international networks as well as adoption and implementation of EU only from the ranks of members of the association, or in case the
standards. WICA pursues connections and cooperation with other members are legal entities, among the natural persons proposed
technology-based clusters. by them. The executive board elects from among its members the
chairman of the board by a simple majority.
C. Chairman of the Executive Board
The chairman of the executive board acts as the legal
representative and administers the association in accordance to
the statute.

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 PART 2 › Establishment phase / Step by step / Step 2/4 How to form the organisation? * Information provided by GIZ Morocco.

EXAMPLE
Cluster governance structures (2/2)

Solar Cluster in Morocco* The improvement of the organisational structure and the business model:
The Solar Cluster, launched in April 2014, is an innovative and A. The Optimisation of the Organisational Structure
ambitious association which brings together national players in the
The organisational structure of the solar cluster was analysed and
renewable energy sector. The cluster has nearly 100 members,
reviewed in order to optimise the operation of the cluster and to
mostly MSMEs, and Start-ups but also some large groups and
automate certain administrative and technical tasks. In particular, the
research centers. In order to strengthen the competitiveness of
purpose was to make the relationship with member companies more
Moroccan companies, the first challenge lies in the ability to
fluid. Indeed, the lack of staff within the solar cluster (one director
transform Moroccan entrepreneurs into genuine producers of
and two salaried staff) did not allow it to maintain a strong
technology while relying on national expertise in terms of research
relationship with all the start-ups and companies of the cluster. The
and development.
organisational analysis of the cluster allowed for the structure to be
The solar cluster team is composed of four people: a general divided into three main services (access to finance, technology
manager, a business development manager, a green watch and transfer, and collaborative projects) It also served to
entrepreneurship manager and a support manager. The solar cluster define job descriptions to strengthen the team and to recruit
contributes to the creation of a competitive industrial sector in the managers for each service. The purchase of administrative
renewable energy market by offering services that meet the needs of management software enabled the automation of some
companies in the sector. administrative tasks such as the management of members' quotas.
It also helped to balance the participation of members in various
events and training. The acquisition of this software allows the
organisation to free up time for the cluster's administrative manager
who also takes care of some communication tasks.
B. The new Business Model
New fee-based services are proposed to generate revenue for the
cluster which aims to be self-financed by 2025.

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Cluster governance structures & staffing

Visualizing cluster governance and management
structures
The structure and organisational procedures of the cluster should be An organisation chart helps to provide a good overview of all
described, along with the structure of its personnel and management relevant bodies, their main tasks and roles as well as interrelations.
principles.

▪ Advises Steering Committee Political Actors ▪ Establishes Project

▪ Integration of Know-How from Representatives of ▪ Appoints Project Members
Politics, Business, Society Chambers of Commerce / ▪ Sets Objectives / Deadlines
▪ Multiplier Effect Trade Unions Banks, ▪ Takes Leading Decisions
▪ International Benchmarking Led Organisations on Concepts and Projects

TASKS STEERING COMMITTEE TASKS

University
Representatives ▪ Develops Concepts & Strategy
Research Institutes ▪ Conducts Surveys / Analysis
Representatives of ▪ Internal & External
Enterprises Communication
Venture Capitalists Network Manager
▪ Establishes Working Groups
Staff
▪ Coordination & Project
Working Groups
Management
BOARD OF ADVISORS
▪ Reports to the Steering
MANAGING OFFICE Committee

TASKS

Example: Example: Example: ▪ Forum for Concrete Cooperation

Innovation Projects Marketing & PR Export Promotion ▪ By specific Topic

WORKING GROUP WORKING GROUP WORKING GROUP TASKS

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Cluster governance structures & staffing

Putting together the cluster management team This is to be decided by the cluster manager.
Relevant criteria are listed below:
What skills and experiences does the personnel involved in the
cluster management have? Or should have?
First of all, it is important to note that focus should primarily be given ▪ Tertiary level education
to a well-balanced cluster team with complementary skills. Not every ▪ Work experience in the private sector
team member necessarily has to have the same sector-specific
▪ Leadership and management skills
technical knowledge. Also, methodological and soft skills matter. In
the end, it is not only about professional competence, but also about ▪ Social skills including intercultural skills
work experience and confident appearance as well as personal drive ▪ Communication skills
and conviction.
▪ Project management skills
In order to better assess individual hard and soft skills, a basic
guideline with relevant qualifications can be helpful for staffing ▪ Proficiency in English
and subsequent task assignment. The assessment can be applied to ▪ Relevant sector and/or technical knowledge of > 3 years
each person in the cluster management team. Scores can be ▪ Cluster and policy-related training
weighted according to the % of Full Time Equivalents (FTE) each
person contributes to the cluster management. Back-office ▪ Proficiency in at least one foreign language may be of use
personnel like secretaries, project controllers, and others shall only
be included in the assessment if relevant for cluster management
activities.

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 * Wood Industry Cluster of Albania, information provided by GIZ Albania. /
PART 2 › Establishment phase / Step by step / Step 2/4 How to form the organisation? ** Information provided by GIZ Egypt.

EXPERIENCES AND GOOD PRACTICE EXAMPLE

Good practice example for staffing –
experiences from Albania
Dos and Don’ts regarding staffing. Experiences from Albanian Improving the management of industrial areas in Egypt**
Wood Industry Cluster of Albania (WICA)*
OBJECTIVE:
(supported by Open Regional Fund for Foreign Trade Promotion) Improve management of Industrial Areas (IAs) in Egypt with a
What did WICA do? focus on six IAs in Upper Egypt.
Creating a cluster management team remains essential for the RESULTS:
proper functioning of the cluster activity. Providing clear job
descriptions for the cluster team was an immediate priority for the ▪ Developed capacities of 75 industrial areas’ management
functioning of Wood Industry Cluster of Albania - (WICA). As a first employees in management functions such as customer care
step, the task force agreed that responsibilities will be delegated to services, real estate services, marketing services and
the cluster team. Consequently, job descriptions with required duties maintenance services.
and qualifications were defined for a cluster manager as well as for ▪ Provided strategic recommendations to improve industrial areas’
cluster experts.
management including updating the management organisation
What were the lessons learned? structure and a roadmap for the management of the industrial
A lesson learned during the process which is worth underlining is as areas.
follows: While drafting employment requirements is essential, the ▪ Supported the hiring and seconding of employees from different
criteria should also specify the necessary standards regarding organisations to fill gaps in the management organisation
education, work experience and professional expertise of the cluster structure.
manager and the cluster team as a whole. Moreover, the impartiality
and integrity of the cluster manager is essential. That person plays a NEXT STEPS
critical role in the well-functioning of the cluster and in the provision
of fair and equal benefits to all cluster members. In the case of ▪ Develop a process map and Standard Operating Procedures
Albania, common synergies between GIZ projects have created the (SOPs) for the management function in the updated organisation
opportunity for WICA to benefit from the wide range of professional structure.
experts returning to Albania with a high level of professional German ▪ Provide on the job training for employees on the developed SOPs
expertise. and the new processes within the updated organisation structure.

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Cluster governance structures

Allow for varying intensities of partnerships among the signatures of both parties, a company becomes an official
different actors cooperation partner of the cluster.
An official agreement ensures legal security for both parties
Clusters allow for – and support – different modes of partnerships
regarding the activities performed within a cluster. In addition, the
and participation. These different modes can also differ and evolve
contract can provide clear insight into a company’s expectations
over time:
concerning cluster services.
▪ Potentially, there one can observe “trial partnerships” in the
Possible structure of a membership / cooperation agreement:
initial phase of a cluster, in which partners may only need to issue
a declaration of intent to cooperate. This merely commits them to I. Preamble VIII. Data safety and protection
disclosing specific business information. II. Cooperation A. Data processing
A. Cooperation B. Consent
▪ It’s only after a certain period that partners engage in obligations B. Cluster Services C. Protection of access data
III. Cooperation Fee D. Use of data
specified in the agreement. These may include membership fees, A. Fee amount IX. Applicable law, contract language
procedures for disclosing information and know-how, possible B. Due date X. Mediation Clause
C. Default in payment A. Mediation obligation
liabilities and others. In exchange, associated partners receive IV. Information on Company B. Mediator
exclusive services and information from the cluster. A. Information obligation C. Arbitration proceedings
B. Control rights XI. Arbitration Proceedings
Although clusters require formal rules and agreements among C. Disclosure statement A. Arbitration tribunal jurisdiction
V. Contract term B. Referral to arbitration tribunal
partners, common engagement is not solely tied to these. Informal A. Indefinite C. Appointment of arbitrator
and living processes are always more important for connecting B. Regular contract termination D. Appointment of the chairman of
C. Extraordinary contract termination arbitration tribunal
partners and integrating them into the cluster. D. Legal relationships on termination E. Joint arbitrator
of contract F. Appointment of replacement
VI. Cluster Trademark arbitrator
Setting up Membership / Cooperation Agreements A. Right of use and commercialisation [Link]
B. Use of trademark H. Proceedings
The cooperation agreement specifically regulates the membership C. Use of trademark after termination I. Applicable law
of contract J. Place of jurisdiction
fee, the term of the contract, questions of liability and the cluster’s VII. Liability XII. Court of Jurisdiction XIII. Other
services. The agreement essentially covers the most important A. Liability for success, guarantee, Provisions
damages A. Amendments
aspects of collaboration between a cluster and the company. With B. Disclaimer of Liability B. Severability clause

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 PART 2 › Establishment phase / Step by step / Step 3/4 Which services and activities to implement?

Step by step for establishing cluster structures

Cluster development strategies should not be static. They should enable a dynamic evolution of the clusters is a basic prerequisite for the clusters’ (and its actors’) ability
development of a cluster and the long-term competitiveness of its actors. The strategic to adapt flexibly to changes in both internal and external conditions (markets).

Step 3: Which services and activities to implement?

+ + +
How to operationalise How to form the Which services and How to monitor the
the strategy? organisation? activities to implement? progress?

ACTION PLAN LEGAL FORM FIELDS OF ACTION MONITORING SYSTEM

FINANCIAL PLAN GOVERNANCE DEVELOP SERVICES

STAFFING MARKETING & PR

AGREEMENTS WITH
KEY ACTORS

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 PART 2 › Establishment phase / Step by step / Step 3/4 Which services and activities to implement? * Gedai et al. 2015.

Cluster Games – Understanding the nature of cooperation in clusters

Services offered for cluster development Cluster services and activities will therefore depend on the
composition of the cluster initiative and the general cooperation
A key lesson for many cluster management units world-wide is that attitude of the cluster actors*.
the type of services to be offered can not be disconnected from
the trust and openness of the cluster members. There was a
belief that, in most cases, services offered by cluster management Cluster services and level of trust required by cluster actors
units depend on their competence, the strategy of the cluster and/or to adsorb:
of the interest of the cluster actors. However, recent evidence has
shown that cluster services must be actively absorbed by cluster
actors. If services are offered that require strong trust and mutual
openness among targeted cluster actors, all related actions will fail if
they are not ready or willing to behave properly. For instance,
shared product development is the most risky undertaking among
cluster actors. While it is risky, it can create great profits. However,
all actors must open their minds and contribute with proprietary
knowledge. There is a high risk that an actor illegitimately takes this
knowledge and uses it for their own purposes.
Thus, starting with cluster services that can be adsorbed by cluster
actors (even with low mutual trust) can add value for all actors.
Networking, information exchange, thematic events and workshops
are those services that can be implemented right at the beginning.
Sharing ideas, common road mapping or joint product development
comes later when a minimum threshold of trust and openness within
the cluster initiative exists. Free riders will benefit but not contribute
and must be excluded. Also, exclusivity for a dedicated purpose
matters here.

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 PART 2 › Establishment phase / Step by step / Step 3/4 Which services and activities to implement? * Meier zu Koecker et al. 2017.

Identifying need-based fields of action

Why are cluster services so important? One option is to map the relevant fields of action and allocate
them to each goal. This can be done within the cluster management
Cluster services are of critical importance for the success and team while involving key partners. Assistance from a management
sustainability of a cluster. A cluster can only attract and retain consultant from a cluster support organisation can also be useful in
members in the long term if a cluster organisation develops and identifying specific cluster services to be offered*.
offers relevant services which address the needs and bottlenecks of
cluster actors. In this respect, cluster management requires
particularly intensive and creative customer orientation. A cluster’s Mapping example to allocate relevant fields of action:
most important customers are the businesses. The earlier members
benefit of such services, the greater is the appeal for further actors
to officially join the cluster.
Another important aspect of cluster services is that they generate
income and funding for the cluster organisation. Pricing of
services should include adequate margins as cluster budget may not
always be covered by membership fees alone.

Developing specific services: What are relevant

fields of action and needs of cluster actors?
Before services are developed with the involvement of the cluster
actors, it makes sense to first deduce relevant fields of action
according to the identified needs and strategic goals formulated in
the initiation phase.

Prepared by ClusterAgentur Baden-Württemberg

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Developing cluster services

Building the cluster service portfolio Pre-assessing the profitability of different cluster services
(exemplary extract):
Based on relevant fields of action, advantages of specific services
can be identified. It is important to carry out this discovery process Expected effort Expected relevance
Planned
together with cluster actors to determine which services are already frequency / for cluster management for actors
available in the market and which should be developed and offered SERVICE Number of

by cluster management. Based on this insight, cluster management

beneficiaries high medium low ☺  
might integrate existing products and services into the cluster’s occasionally /
range of products and services and negotiate special conditions with 1 Information events many x x

external service providers for cluster members (demand bundling). occasionally /

The cluster managers should strive to consolidate the various 2 Joint procurement many x x x

services in an integrated cluster service portfolio for which the Cluster marketing frequently /
cluster management office acts as a sort of “one-stop shop”. 3 (websites, many x x
brochures,…)
Given corresponding demand and strategic importance, separate
occasionally /
working groups can be formed for the individual services such as 4 Joint R&D few x x
export promotion. These can then come up with a special service
package and coordinate provision of services. HR services rarely / few
5 (headhunting) x x

In the end, it is recommended for cluster managers to list all

Common trade fair
identified services to be offered and assess them according to the 6 appearance rarely / Few x x x
expected profitability. As already indicated in the financing
occasionally /
subchapter, long-term cluster activities often depend on a sound 7 Tender training many x x
financial basis. In addition to services that are covered by
membership fees, fee-based services can be a crucial lever to Prepared by ClusterAgentur Baden-Württemberg
ensure organisational sustainability.
The assessed services can be allocated in a portfolio to better
prioritize (see following page).

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 * prepared by ClusterAgentur Baden-Württemberg. / ** Exemplary case
PART 2 › Establishment phase / Step by step / Step 3/4 Which services and activities to implement? of the German cluster Silicon Saxony. 2015/2016.

Developing cluster services EXAMPLE

Allocating the pre-assessed services in a portfolio The Silicon Saxony Case: Willingness of cluster
actors to pay for certain cluster services
1 7
HIGH

Joint
Stock 6
2
Compan
y
Fee-based
Ltd. services
Services covered by
Recognition by actors

Hybrid
membership
Organisati fees
on

3
5

Exclude
Critical review or offer for free
4
LOW

HIGH Efforts LOW

The allocation can be carried out within the cluster management The willingness of cluster actors to pay additional fees for certain
team. For the final determination of the cluster portfolio to be services significantly depends on the content of the service as such
offered, cluster services can be allocated and double-checked by as well as the professionalism with which it is implemented.
cluster actors. The resulting comparison of the cluster managers’ The figure above indicates that cluster actors are more willing to
and cluster members’ views on relevant services enables a final pay for highly specialised services. For brainstorming or
validation of high priority cluster services and other supplementary networking, the readiness is very low. Such services can be
services*. already included in the membership fee**.

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 PART 2 › Establishment phase / Step by step / Step 3/4 Which services and activities to implement? * GIZ TAM III project; information provided by GIZ Morocco.

EXPERIENCES AND GOOD PRACTICE EXAMPLE

Good practice example for developing cluster services –
experiences from Morocco (1/4)
With support of the TAM III project of GIZ Morocco, the CE3M,
Menara and Solar clusters have designed innovative services that
meet the specific needs of their members. One can mention the
Technology Watch Services for the Solar Cluster which will allow
to disseminate strategic information to members regarding new
technologies in the renewable energy sector.
Other innovative services have been designed as part of the support
of the solar cluster, such as the solar caravan concept which is a
collaborative project involving several members of the cluster and
which will inform industry, farmers and public administration on the
potential savings through the implementation of photovoltaic or solar
thermal solutions and convince them to take on control over their
energy bills.
All of these services will be paid for and generate additional
revenue for the clusters, through membership fees or sponsoring of
external partners. These revenues will be used to finance other
activities for the benefit of member companies, such as trainings and
study trips*.

© GIZ TAM III project

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EXPERIENCES AND GOOD PRACTICE EXAMPLE

Good practice example for developing cluster services –
experiences from Morocco (2/4)
Creation of a Innovation and Technological Development
Centre – Cluster Menara
VISION: DESIRED OUTCOMES:
Set up an Innovation and Technological Development Centre Initiated and coordinated by the GIZ TAM III in 2019, the financing
(CIAC) for the agri-food and cosmetics sectors for Cluster and management of the CIAC project will be made by GIZ PPE from
Menara and it’s 80 companies/startup members for the Marrakech- end 2020 onwards. A transition phase is underway between both
Safi and neighboring regions of Morocco. projects to ensure a smooth handover.
▪ Promoting Transfer of Technology and access to technology
to SMEs so that they can offer more innovative and competitive
OBJECTIVE:
products internationally respecting international standards.
▪ Creation of a non-profit innovation center delivering high-
▪ Creating links with the research and academic community:
quality technical and non-technical services relevant to
CIAC results out of a joint effort among GIZ, Cluster Menara and
businesses in the region of the agri-food and cosmetics sectors,
the Cadi Ayyad University, Marrakech. The CIAC will be housed
and at moderate prices compared to other national and
inside the Cite d’Innovation building of the University.
international service providers.
▪ Maintaining existing jobs as well as promoting the creation of
▪ Deliver paid and subsidized innovation services which
new jobs inside the SMEs as a direct result of access to the CIAC
contribute to the financial and operational sustainability of the
to create new competitive products for national and international
center and the coordination unit of the Menara Cluster.
markets*.
▪ Support the development of existing and new products and
services in the Menara Cluster and other external companies in
these sectors in order to support the creation and qualification
of new jobs in member companies and / or companies in the
associated value chains.

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EXPERIENCES AND GOOD PRACTICE EXAMPLE

Good practice example for developing cluster services –
experiences from Morocco (3/4)
New MedTech division – Cluster CE3M
VISION: DESIRED OUTCOMES:
Help CE3M and its 80+ company/startup members play an important The original program supported by GIZ TAM in Morocco was setup
role in combatting the COVID19 crisis by creating a new MEDTECH to strengthen the capacities of the Cluster to help them offer value-
added services to their members and to help them be more
division to help recruit new members and encourage them to create
competitive. The COVID19 crisis obliged the cluster to enter this
home-grown products and services to affront the crisis. sector by participating in the design and development of the first
home-grown respirators (ventilators) manufactured in Morocco in
record-time.
OBJECTIVE:
As a result, the existing support offered by GIZ TAM program was
▪ Enter a new sector (Medical Technology) which is currently modified to take into account the COVID crisis and support was
under-developed and under-represented in Morocco. It is offered for the creation and professionalization of this new division in
currently strategic for the country and the Ministry of Industry terms of capacity building of the cluster staff as well as networking
and critical for the successful management of the COVID19 crisis. the cluster with similar initiatives and programs in Europe*.
▪ Attract new members and encourage the development of
collaborative projects between members (SMEs, universities,
research institutions etc).
▪ Create a portfolio of value-added and paid services to offer
these members and help improve their competitiveness nationally
and internationally.

Artificial Intelligent Respirator,

designed and manufactured
in Morocco
(source: Médias24)

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EXPERIENCES AND GOOD PRACTICE EXAMPLE

Good practice example for developing cluster services –
experiences from Morocco (4/4)
Mentorship Program – Cluster CE3M and Cluster Menara
VISION: DESIRED OUTCOMES:
Facilitate the access of industry experts, entrepreneurs and sector The original program supported by GIZ TAM in Morocco was setup
specialists from Morocco to cluster members to help coaching to strengthen the capacities of the Cluster to offer value-added
companies and start-ups as well as to engage them in networking services to their members and to help them be more competitive.
activities and thus enabling access to new markets and/or finance. Mentor programs are a tried and tested model especially in use in
This allows the cluster to adopt best-practices and to operate more start-up accelerators and incubators. The participating startups are
like an incubator. put in contact with a pool of expert mentors to help them periodically
during the incubation period.
▪ Encourage the interaction between the new entrepreneurs and the
OBJECTIVE: more experienced ones and share best-practices based on real-
▪ Create a network of mentors that can be accessed by the life experiences and lessons learned.
members of the clusters. ▪ Facilitate the opening of doors to the new entrepreneurs by
▪ Train cluster staff and mentors on the processes and helping them to network with the mentor’s contacts be it in the
procedures of mentoring. area of new business, new markets or access to finance.
▪ Offer a mentoring program as a paid-service to the cluster ▪ Accompany the entrepreneur and the startup during the critical
members in the future. phase of scale-up and growth*.

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Marketing the services

Cluster Services must be professionally presented (3) Public relations
An external communication of the cluster which is appropriate and oriented
and marketed equally at the competences of the cluster and the expectations of the cluster
The first priority in marketing services is to clearly structure them members is a central precondition for the attainment of the cluster goals and
and to feature them as appealing and sense-making as possible to objectives. Topics include the cluster, its activities and experiences as well
cluster members. The following instruments have proven particularly as its organisational structure.
effective as marketing instruments: Public relations include all forms of communication with the cluster’s
environment. Some examples are presentation materials for the cluster
▪ Presenting the services on the cluster web site (including digital media), forms of correspondence (e.g. e-mails) or
▪ E-mail marketing conference lectures.
▪ Information on the services at cluster meetings and workshops.
(4) Presentation Material
Suitable presentation material is an important requirement for establishing
Structuring the marketing activities and maintaining customer relations (e.g. brochures, project profiles, cluster
Going one step further, cluster management entities can also website, cluster presentation, etc.).
elaborate guidelines to professionally structure marketing activities (5) Other public relation tasks
of the cluster management as well as those of the cluster members. Every cluster member is responsible for contributing actively to the cluster’s
The guidelines cover the following components: PR work in their respective areas of specialty. This includes press releases
and lectures as well as participation in working groups and committees.
(1) Market monitoring / acquisition
One of the most important tasks of the cluster management is regular and (6) Corporate Identity
systematic market monitoring and interpretation of the results. While cluster The goal of cluster members must be to strengthen the good reputation of
management is in the lead for this, all other cluster members should actively the cluster through consistent high quality external communication. (uniform
participate in this activity, too. logo, business cards, e-mail signature, etc.).

(2) 2. Offer preparation (7) Measurement and management

Quality assurance is a central process of developing and offering cluster Results of marketing and acquisition activities are continuously documented
services and ensures that offers are developed according to the qualitative in a database. Appropriate measures can be worked out after a review with
and formal requirements of the customer (or the respective agency inviting the steering committee or board or with cluster members.
the tenders).

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 PART 2 › Establishment phase / Step by step / Step 3/4 Which services and activities to implement? * TACTICS. 2012.

Marketing the services

Branding as a key lever to maintain long term Making use of the brand
visibility Once a cluster brand is designed and visualized in the form of a
Marketing strategies can be designed to actively promote cluster logo, brochures and/or video and shared among the members and
services. When it comes to branding, a cluster develops a brand stakeholders, marketing activities can be implemented to promote
comprising the values and attributes of the cluster. These, in turn, and consolidate the brand. For each target group, the objectives of
create an image among stakeholders. Some of the relevant the communication activities need to be agreed upon in order to
questions to be addressed in cluster branding include: What does guide the choice of tools and media as well as the timing of the
your cluster stand for? What is the USP? How is the cluster marketing activities.
perceived? And what is the cluster striving to achieve in the future? Goals associated with branding and related marketing activities are:
Consequently, branding is a strategic process that not only includes ▪ To strengthen commitment of currently involved cluster actors
the view of the cluster organisation and its members but also the
▪ To further anchor and establish the cluster strategy
perspective of additional stakeholders. These include policy makers,
donors, partner clusters from neighboring economic regions and the ▪ To attract new cluster actors
public at large. The regional context of the cluster location must be ▪ To increase visibility beyond regional borders
taken into consideration – including policy framework, economic
structure and cultural aspects. It is especially relevant to create a ▪ To increase attractiveness for human resources,
consistent branding. It should be well in line with the brands of the partners and investors
cluster members and the branding strategy of the entire region in ▪ To foster cross-cluster and cross-border collaboration*
which the cluster is located. This way, all relevant stakeholders can
commit themselves to the brand and, in the end, the brand will gain
consistency. However, one has to keep in mind that it can be a
challenge to find a sound compromise between all different branding
strategies of the region, the companies and the cluster itself.

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 * TACTICS. 2012.; Consorzio TUTELA DEL VINO CONEGLIANO
PART 2 › Establishment phase / Step by step / Step 3/4 Which services and activities to implement? VALDOBBIADENE PROSECCO. 2020.

EXAMPLE
Developing a cluster brand

The Prosecco cluster in Veneto, Italy The brand value is also focused on the quality of the product due to
the long tradition and the certified labelling. Also, the intent is to
The Italian cluster of Prosecco (sparkling wine) in Conegliano
associate the sparkling wine region with the suggestion of luxury,
Valdobbiadene, Veneto region, is a self-contained economic system.
pleasure and well-being.
Thanks to the wine production (which is the core business of the
Additionally, there is a regional association with the heritage of noble
cluster), many related activities have evolved and led to a veritable
castles and the colourful and charming landscape where the
value chain. Examples of involved cluster actors are:
Prosecco has been produced for centuries.
▪ Companies that design and manufacture winemaking machinery
▪ Firms producing technology for vineyards and wineries around the world Since the brand is so strictly connected to the territory, the marketing
▪ Laboratories providing analyses actions are therefore directed to preserve and promote the area itself.
▪ Companies supplying winemaking products and services (It is now tentatively considered for the World Heritage List).
▪ Scientific institutions training young professionals each year In 2003, “the Prosecco wine road” was established. Winding through
▪ Local institutions which strengthen and promote the identity of the area the entire area, visiting guests can drive along the routes to discover
▪ Main players in the hospitality and accommodation sector, the historic and artistic sights as well as the most prestigious cellars.
including restaurants, wine shops and others
Key messages from this example
This territorial system, made up of heterogeneous actors, was
▪ For some clusters – especially those anchored to the values of
recognized in 2003 as the First Sparkling Wine District of Italy.
their territory – it is reasonable to relate to their location in order to
This is a designation that has opened up possibilities for developing
reinforce their brand. This is a win-win situation because the local
economic and scientific research projects as well as promotional
public authorities can count on a positive impact in terms of tourist
programmes.
presence due to increased regional attractiveness.
The core focus of the cluster brand strategy is the territory. It is ▪ A cluster brand that is based on the territory implies a strong
recognized as the catalyst of the business and as a viable tool to commitment of all the actors, private and public, and a strong self-
increase the awareness of the Prosecco cluster brand itself. awareness on the part of the community*.

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Step by step for establishing cluster structures

Cluster development strategies should not be static. They should enable a dynamic evolution of the clusters is a basic prerequisite for the clusters’ (and its actors’) ability
development of a cluster and the long-term competitiveness of its actors. The strategic to adapt flexibly to changes in both internal and external conditions (markets).

Step 4: How to monitor progress?

+ + +
How to operationalise How to form the Which services and How to monitor
the strategy? organisation? activities to implement? progress?

ACTION PLAN LEGAL FORM FIELDS OF ACTION MONITORING SYSTEM

FINANCIAL PLAN GOVERNANCE DEVELOP SERVICES

STAFFING MARKETING & PR

AGREEMENTS WITH
KEY ACTORS

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 PART 2 › Establishment phase / Step by step / Step 4/4 How to monitor progress? * Christensen et al. 2011.

Setting up a monitoring system

Focus areas for The following figure provides an overview of four different categories of strongly
monitoring and interconnected indicators which can be applied to monitoring and evaluation activities.
These categories are input, output, outcome and impact*.
evaluating of cluster
activities
Monitoring and evaluation of
cluster development is
important. However, methods,
key performance indicators
and data collection protocols
differ across countries and
economic fields. A single set of
agreed upon evaluation and
impact assessment methods
and key performance
indicators currently does not
exist. The needs and scope of
the analyses also vary. This
makes it difficult to compare
monitoring and evaluation
approaches across regions
and nations.

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Setting up a monitoring system

The input category measures cluster development efforts that have What NOT to do when implementing a monitoring
been invested in over a certain period of time. The other three approach
categories must be adapted to the input.
▪ Monitoring often starts too late or is not done in a continuous way.
Output can be understood as what has been done. It includes
counting actions such as number of events. The output can be ▪ Monitoring indicators to measure outputs, outcomes and impact
directly influenced by the cluster management. are often not aligned with the input. This often leads a
significant mismatch. Policy tends to provide little input, but
Outcome indicators focus more on short and medium-term results.
expects huge outcomes and impact
For example, cluster actors are more familiar with digitalization
issues as an outcome of related training measures. ▪ Monitoring indicators are often not really meaningful if they only
focus on what is easy to measure. Often, too much focus is given
Impact indicators focus on long-term effects, often with dedicated
on output or impact instead of outcomes. The latter are better able
economic values. Cluster actors can increase profitability by
to consider output and impact indicators in the right context.
implementing digital processes. Since the impact can not be directly
influenced by cluster organisations, such indicators have to be well ▪ There is still a lack of solidly established methodological
designed. Policy makers are in favour of impact indicators but often approaches and practicable tools for monitoring core cluster
overlook the fact that such impacts depend on various factors effects without the interference of any other influencing variables.
beyond the capabilities of the cluster organisation. ▪ Monitoring and evaluation should be understood as tools for
mutual learning and continuous improvement -- not as a tools to
control.

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Setting up a monitoring system

Impact-oriented monitoring Impact-oriented monitoring covers the following
Cluster impact monitoring serves to measure the effects that are procedures for processing all the relevant
achieved by cluster actors as a result of their clustering and information:
networking efforts. It is an approach that has been developed in an
(1) Identifying impact areas: Expected results and impacts
effort to overcome conventional shortcomings.
(2) Deriving and agreeing on impact hypotheses: Assumptions
There are two important preconditions that significantly impact the
about the relationship between input and impact
validity of the overall approach. Firstly, it has to be done continuously.
Secondly, a minimum of 70 % of the cluster actors must participate in (3) Determining areas for observation: Particularly qualitative
order to assure meaningful results. Thus, communication and indicators and milestones for observing behaviour and
commitment matter. If cluster actors do not see the added value of processes (changes in whom, how many and by when).
participating, the impact monitoring does not work. (4) Data collection and use, interpretation: Obtaining data and
If it works, it can provide very relevant quantitative outcomes and information, analysis and conclusions*.
can serve to outperform other approaches like ex-post evaluations.

The Real Case: The Automotive Sector in Germany

› Sector: Automotive
› Country: Germany
› Period: 2012 – 2013
› Methodology: Interview and questionnaires
› Response rate: 78 %
▪ Key findings:
› Monetary benefit varies between zero and € 250.000
› The higher the commitment and cooperation
among the cluster actors, the more likely
it is to generate a higher monetary added value.

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FURTHER READINGS
▪ Christensen, A., Laemmer-Gamp, T. & Meier zu Koecker, G. 2011. ▪ TACTICS. 2012. Supporting cluster marketing and branding , PRO
Let‘s make a perfect cluster policy and cluster programme. Smart INNO Europe Initiative/European Commission. Retrieved from
recommendations for policy makers. Retrieved from [Link]
[Link] subsites/nic/[Link].
[Link]/downloads/Clusters_web_singlepage_06092012.pdf, ▪ WICA-Wood Industry Cluster of Albania. Retrieved from
[accessed July 2020]. [Link] [accessed July 2020].
▪ Business Upper Austria. 2021. Financing Structure. Provided by
Business Upper Austria.
▪ Consorzio TUTELA DEL VINO CONEGLIANO VALDOBBIADENE
PROSECCO. 2020. Retrieved from [Link], [accessed July
2020].
▪ Gedai, E., Kóczy, L., Meier zu Koecker, G. & Zombori, Z. 2015. Cluster
Games II, Institute for Innovation and Technology (iit).
▪ Kind, S. & Meier zu Koecker, G. 2013. Cluster Impact Analysis - The
real cluster case. doi: 10.13140/RG.2.2.27660.62089.
▪ Médias24. 2020. Retrieved from [Link]
respirateur-100-marocain-en-phase-terminale-de-qualification-
[Link], [accessed July 2020].
▪ Meier zu Koecker, G. 2009. Clusters in Germany – An Empirical Based
Insight View on Emergence, Financing, Management and
Competitiveness of the Most Innovative Clusters in Germany,
Kompetenznetze Deutschland.
▪ Meier zu Koecker, G., Schneider, K. & Grieb, B. 2017. Cluster
Initiatives as Path Maker for Regional Innovation Development.

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 PART 2 › Operationalisation phase

OVERVIEW OF PART 2:
OPERATIONALISATION PHASE

▪ Introduction
▪ Step by step process for advancing the operationalisation
› STEP 1: How to operationalise?
› STEP 2: How to attract and tie cluster actors?
› STEP 3: How to reach cluster management professionality?
▪ Further readings

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From establishing structures to advanced operationalisation

During its establishment, the cluster has put things on the right track for targeted cluster development. It is now time to i mplement
professional business services and to carry out and manage projects to support members. This phase serves to keep cluster act ors
motivated and satisfied as well as to continuously professionalise cluster management. From this point forward, it is crucial to keep all
activities under close scrutiny on a regular basis to enable sustainable cluster development and create positive impact.

10 KEY QUESTIONS when operationalising (6) Is performance monitoring applied regularly?

(1) How does one organise and manage cluster activities? (7) Is the cluster strategy regularly realigned and consequently
(2) How does one define, model and implement cluster processes? implemented with the involvement of cluster actors?
(3) Is there a balance between obligations of members to the (8) Are services and projects further developed according to
cluster organisation and the services provided by the cluster to strategic reorientation?
its members? (9) Is skill development of staff members part of the organisational
(4) Is the cluster sufficiently known and does it appeal to potential development?
new members? (10) Has the cluster reached its goals in terms of the desired result,
(5) Are there enough opportunities for open exchange, dialogue costs and deadlines? Are all relevant stakeholders satisfied
and feedback with cluster members? with the results?

KEY ACTIONS At this stage, cluster structures and activities are in place and ready for their realisation. Key elements for advanced
operationalisation are summarized below and will be explained in more detail on the following slides. The sequence is not fixed and may vary
from case to case.

1 2 3
Fostering and Professionalising
Managing cluster
improving the cluster management on
processes and projects
membership portfolio regularly

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 PART 2 › Operationalisation phase / Step by step

Step by step process for advancing the operationalisation

As already indicated, operationalisation is closely connected to professionalisation. Cluster organisations can be understood as service
providers for cluster actors. Monitoring and self-reflection of activities implemented by the cluster management are key steps to identify
lessons learned and potentials for improvement.

+ +
How to How to attract and tie How to reach cluster management
operationalise? cluster actors? professionality?

ATTRACT NEW CLUSTER EVALUATION & STRATEGY

PROCESS MANAGEMENT
MEMBERS BENCHMARKING REALIGNMENT

MANAGE MEMBERSHIP
PROJECT MANAGEMENT CONTINUOUS INTERNATIONALISATION
RELATIONS
DEVELOPMENT OF
SERVICE PORTFOLIO
STAFF DEVELOPMENT

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 PART 2 › Operationalisation phase / Step by step / Step 1/3 How to operationalise?

Step 1: How to operationalise​?

+ +
How to How to attract and tie How to reach cluster management
operationalise? cluster actors? professionality?

ATTRACT NEW CLUSTER EVALUATION & STRATEGY

PROCESS MANAGEMENT
MEMBERS BENCHMARKING REALIGNMENT

MANAGE MEMBERSHIP
PROJECT MANAGEMENT CONTINUOUS INTERNATIONALISATION
RELATIONS
DEVELOPMENT OF
SERVICE PORTFOLIO
STAFF DEVELOPMENT

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Managing cluster projects – basics

The management of a cluster demands high quality teamwork in Cluster projects can take on different forms
which numerous tasks and functions are handled by different cluster and occur on different levels​
actors. The operational work is characterized by many parallel
processes and project-related activities. However, it has to be
CLUSTER PREVAILING
pointed out that all actions to be implemented shall aim to support PROJECT GOAL & TARGET GROUP FINANCING EXAMPLE
the cluster development as such or support a number of cluster CHARACTER SOURCE
actors. Projects shall not be implemented to preliminarily finance Internal
Projects are carried out by cluster Introduction of Customer
the cluster organisation. ​ Cluster
management staff and target
▪ Mainly self-
Relation-ship Management
Management financed
organisational development. Software (CRM).
Projects
Fundamentals of cluster-related project management​ Cluster organisations participate in
▪ public
Networking and experience
Cluster joint projects that aim at further exchange projects intended
(co-)funded
Professional cluster management requires professional project Development developing the performance of the
▪ Donor
for cluster organisations
management. Project management enables the cluster to achieve Projects cluster organisation. Cluster actors from various regions or
funded
are not directly involved. countries.
operational goals quickly and in accordance with its resources. Cluster organisations promote
Project management of a
Projects- cluster actors’ projects through
It sets clearly defined, limited and manageable tasks.​ as-a-Service advisory services, but are not part
▪ Commonly complex project, which
various involves several members
(Member of the project consortium.
A project is a major, unique and complex undertaking, with several Projects) Beneficiaries are usually a few
sources (e. g. Aviation meets Wind
actors involved in its planning, management and implementation. Energy).
members.
Specifically, a project involves a large number of individual Joint Projects The cluster organisation Joint strategy development,
processes which together lead to the project result. ​ (Cluster cooperates with cluster actors in a ▪ Self- which includes the
Actors & project. Usually the cluster financed participatory involvement of
The goal of project management is to implement individual projects on Management) organisation takes the project lead. the cluster actors.
time and in line available resources. With most projects there is a
project executing entity which issues the project commission and takes It is advisable when implementing a cluster project to split the
the overall decisions, while the project management (project manager project into several phases and deal with these in steps together
and team) are responsible for concrete project implementation. with the project participants.

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 * Information provided by Allianz Faserbasierte Werkstoffe
PART 2 › Operationalisation phase / Step by step / Step 1/3 How to operationalise? Baden-Württemberg (AFBW).

EXAMPLE
Managing cluster projects – a practical case

Setting-up a cross-sectoral cluster working group

(The AFBW case)*
Market research, done by the German textile cluster management
group of the “Allianz Faserbasierte Werkstoffe Baden-Württemberg
(AFBW) e.V.”, figured out that the maritime sector has great
potential for new textile applications. However, since the maritime
sector is very traditional, it was obvious that conventional market
penetration activities would not work. Thus, an AFBW working
group, consisting of nine of cluster members, initiated a
collaboration with interested companies from the maritime sector.
The key to the success of this undertaking was a dedicated effort to
create business for cluster actors.

© AFBW

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EXAMPLE
Managing cluster projects – the theoretical approach

▪ Project management and organisation includes creating a goal-oriented

▪ Initially, all the data relevant for the project is framework for action, coordinating the individual work packages and the
collected and analysed; project goals are defined. participants, structuring project communication, and motivating project participants.
▪ Setting clear and realistic goals (material, During this phase there must naturally be ongoing project controlling including
deadline, cost) is very important for project progress reports and constant comparison between actual and budget figures.
management, as it sets the general approach. ▪ Particularly important for project management are regular team exchanges for
▪ The data analysis is then used to generate an initial face-to-face sharing of information, communication and progress control.
joint project concept, which acts as a basis for ▪ Continuous delivery and improvement should be incorporated in agile teams across
discussion and the project plan. the value stream (agile and lean project management)

INITIATING IMPLEMENTING

1 2 3 4
PLANNING MONITORING & CLOSING
▪ An initial meeting of all relevant actors should result in a ▪ Projects activities need to be monitored throughout
project structure in terms of content and timetable, also the whole process.
defining individual work packages and individual tasks. ▪ When completing a cluster project, the individual project
▪ In addition, an estimate must be made of the work involved, phases should be jointly analysed and evaluated. What
the costs set and key interim goals (milestones). worked well, what less well, what were the reasons, and what
can be done better in the next project (lessons learned)?
▪ To be able to measure whether the interim goals and project
goals have been reached, indicators should be defined. ▪ Project documentation (project progress reports,
final report) plays an important role in this.
▪ A major point in planning cluster projects is agreement
between all those involved that they will carry out the tasks ▪ An internal cost analysis should also be included in the
they take on in a binding and punctual manner. final phase.

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Managing cluster projects vs. processes​

Applied to the cluster context, we can define a process as a chain Cluster Processes can take place internally or externally: ​
of functionally linked activities with the aim of meeting ▪ Internal activities: Activities are mainly intended for staff of the
requirements of internal and external customers (e.g. cluster actors). cluster organisation. This is part of the day-to-day work that is not
As shown before, projects also consist of different processes (or always seen by the cluster actors (e. g. reporting, administration
phases). Some of these processes can also be standardized. etc.).​
Especially if cluster projects are carried out on a regular basis, some ▪ External activities: Activities that are carried out for (and often
of the basic project-related processes can be standardized and with) cluster actors. Key beneficiaries are the cluster actors.
applied in several similar projects in order to increase the efficiency.
Thus, projects and processes are strongly interdependent. However,
one can identify differences between project management and
process management as indicated below:​

PROJECT MANAGEMENT PROCESS MANAGEMENT

DURATION

▪ Usually onetime activity

▪ Limited duration with defined start ▪ Continuous and repeated activity
and end date
MAIN GOALS

▪ Create a new or better product, service ▪ Standardize cluster management

or solution for a problem or suboptimal related activities
situation ▪ Increase efficiency and effectiveness
▪ Meet defined project goals with regard of cluster activities (related to time,
to time, costs and quality of results quality and costs)

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Managing cluster projects vs. processes​

We can furthermore distinguish here between the following kinds Introducing a process management system
of processes:​ in five steps​
▪ Management processes: These are processes in the area of
(1) Develop a cluster process model in which the cluster’s central
strategy, planning and management (i.e. processes in the field of
management, core and support processes are determined.
strategic cluster management.)​
▪ Core processes: These are processes associated with (2) Develop target processes. The task is to develop and model the
operationalisation within the cluster (i.e. specifically cluster individual process (primary and sub-processes) on the basis of
services).​ the cluster process model. An example is given on the following
▪ Support processes: These processes involve providing the slide.​
infrastructure and resources needed for the cluster organisation.​ (3) Process documentation: The next step is to describe target
Other types of processes which are particularly important for a processes which have been developed and document them in
cluster are learning and information processes (i.e. knowledge writing (process description, management manual).​
management).​
(4) Process implementation: The process must now be introduced
Depending on the level of hierarchy and aggregation, these various to the cluster management and prove its value in practice. The
kinds of processes can be broken down into primary processes important aspect here is for the processes to be implemented
and sub-processes.​ consistently by all participants, following the steps as required.​
(5) Process optimization: Once the process is implemented,
monitoring and ​feedback will help to further optimise the
process.

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Managing cluster processes

Application Process (Exemplary Visualization)​
EXAMPLE APPLICATION PROCESS

1 9
Fill in Sign
COMPANY

Application form document

Application
Form
CLUSTER MANAGER

2 3 4 7 8
Process Send application Organize Send Send
application to members cluster meeting letter of refusal documents C

Application Statute &

Invitation
Form declaration
NO YES In: Member
Registration Process

5 6
Conduct Application
cluster meeting accepted

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Managing cluster processes

Improving cluster processes permanently: The Deming Cycle (PDCA)​

ACT PLAN
▪ Share the knowledge gained ▪ Identify a problem.
from the previous steps. ▪ Define a goal and plan improvements.
▪ Implement the new standard A ▪ Plan necessary measures (action plan).
on a wider scale. P
▪ Reflect and restart the cycle
if it did not work.

CHECK C DO
▪ Measure and monitor outcomes to D ▪ Implement the planned measures on
test the validity of the measures. a small scale to prove or disprove
▪ This allows for identification of potential their validity.
problems and areas for improvement. ▪ If invalid, go back to the first step and
restart the cycle.

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Step 2: How to attract and tie cluster actors?

+ +
How to How to attract and tie How to reach cluster management
operationalise? cluster actors? professionality?

ATTRACT NEW CLUSTER EVALUATION & STRATEGY

PROCESS MANAGEMENT
MEMBERS BENCHMARKING REALIGNMENT

MANAGE MEMBERSHIP
PROJECT MANAGEMENT CONTINUOUS INTERNATIONALISATION
RELATIONS
DEVELOPMENT OF
SERVICE PORTFOLIO
STAFF DEVELOPMENT

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Attracting new cluster actors

Before starting any targeted activities to attract new cluster actors, Targeted acquisition to fill gaps​
there must be a common understanding about the purpose of doing
so. Reasons to attract new actors are:​ Periodic assessment of the cluster strategy and goals should be
carried out in light of the current member portfolio and related
▪ Quantitative reasons: New cluster actors will help to increase sectoral theme. One may identify competence gaps relevant for
critical mass. Additional membership fees will contribute to the sustainable and future-oriented cluster development. This should be
sustainable financing of the cluster organisation.​ given special attention regularly in order to avoid “lock-in” effects.
▪ Qualitative reasons: The quality of the member portfolio will be Although clusters require formal rules and agreements among the
increased in the event that some nodes of the value chain are not partners, informal processes are always more important for binding
properly covered or if there is an opportunity to attract large partners and integrating them into the cluster than mere formal
“anchor” firms. For example, the LEONIE Group is a high quality rules.​
partner of Automotive Cluster Tunisia. Leonie employs around
15,000 workers representing one quarter of all suppliers in How to attract actors step by step?
Tunisia. Companies with specific knowledge which is missing
among the existing cluster actors can serve to increase the quality Clusters that are unable to provide marketing services may
of the cluster efforts.​ experience difficulties in acquiring new actors as partnership benefits
are not immediately visible. Development of a persuasive advertising
When attracting new cluster actors, there is often a cluster core
process is therefore greatly important. Particularly, SMEs request a
consisting of persons with good experience of collaboration and who
stepwise approach showing clearly articulated benefits to convince
have established mutual trust. This core might create an appeal for
them to actively engage in the cluster.
further actors to join cluster. Marketing and acquisition activities of
the cluster organisation are crucial levers for member growth. Also, There is no specific blueprint for a step-by-step approach. However,
committed cluster actors can act as important promoters alongside it is always important to convincingly market and present the cluster,
the cluster management and can help to increase the attraction. its topics, activities, and related benefits for members.
A good practice example of systematically approaching potential
cluster actors is presented on the following page.

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EXAMPLE
Attracting new cluster actors (1/2) ​

microTEC Südwest in Germany​ (3) Membership Application process​

(1) Identifying potential cluster actors​ ▪ Filling out the application form by potential member​
▪ Management board decision on membership​
▪ Self-conducted desk research​
▪ Confirmation of membership ​
▪ Receiving requests from interested companies​
▪ Receiving recommendations of existing members​ (4) Active involvement​
▪ Creating a “Pipeline of potential cluster members”​ ▪ Actively involving a new member in expert groups and marketing
activities (e.g. competence atlas)​
(2) Reaching out to potential cluster actors​
▪ Members benefiting from various services and advantages*
▪ Marketing the cluster, its strategic goals, topics and activities –
(see next page)
on website, at events (e.g. expert group meetings), and via direct
contact​
▪ Using testimonials from satisfied cluster members, e.g.

Mr Stoll, segment manager at Carl Haas GmbH:

"I appreciate the high level of competence of the expert group
participants. Among other things, Carl Haas is always able to find
new approaches, gain new insights and ultimately generate good
solutions through the university contacts in the expert group".

▪ Presenting the added-value for members (see next page)​

▪ Initial get-together to get to know each other in person, to specify
cluster-related issues and benefits, and to clarify open points and
questions

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EXAMPLE
Attracting new cluster actors (2/2)*

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Binding cluster actors and partners

Successfully maintaining contacts, informing and For example:
networking ▪ Businesses generally expect information to be very brief and with
a clear benefit.
Communication and PR are fundamental for the success of clusters.
▪ Administrative entities and politicians usually want information
As open learning platforms, clusters often have over 100 different
which presents their own contributions in striking and visual form.
actors. They need a rich and clear information basis in order to be
▪ Promotional agencies need information which is documentary in
internally integrative and externally attractive.
nature, showing activities and results.
As clusters include businesses, research and academic institutions, ▪ Regional developers and officers with responsibility for a location
public institutions and many more different stakeholders, look for information providing an overview which shows the quality
communication has to take into account the different expectations of the location.
and habits of the various target groups. ▪ Partner clusters are interested in getting information on core
competencies of cluster actors and the clusters’ strategic goals in
order to build and deepen collaboration.

An information system which meets the needs of the target groups.

Without a clear communications plan jointly drawn up or supported
by core partners, there can be no professional information policy. In
implementation, the right media mix also plays a decisive role.
Here, it is particularly important to start from the target group’s
expectations and habits and not from those of the people
responsible for information in the cluster.

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Binding cluster actors and partners

In order to amplify satisfaction and commitment from cluster actors, CRM systems are not a question of money but rather of smart
the cluster management should focus on several core activities: solutions. It is important to focus on what a cluster organisation
Direct contacts with members, visiting them, capturing their really needs.
needs and offering high quality services based on these needs Thus, an integrated management of cluster actor relationships
will bring about the most positive effects. Targeted matching is one considers all mentioned areas:
of the current trends.
Easier said than done! To adequately document, structure and
analyse all relationships and interactions with potential and existing
cluster actors and stakeholders, ICT solutions like Customer PR & Marketing
Relationship Management (CRM) systems can help support and ▪ PR & marketing
enhance the efficiency of cluster management and the associated ▪ Regular information (e.g. newsletter)
processes and activities.

ICT-based Membership Management

Personal Contacts
▪ Management of member processes
▪ Contact management ▪ Direct contact via phone, visits
▪ Project & event management or meetings at events
▪ Efficient monitoring and analyses ▪ Exchange on current issues

Need-based Services
▪ Proivding high quality services
▪ Regular monitoring, capturing needs
and improving services

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Step 3: How to reach cluster management professionality?

+ +
How to How to attract and tie How to reach cluster management
operationalise? cluster actors? professionality?

ATTRACT NEW CLUSTER EVALUATION & STRATEGY

PROCESS MANAGEMENT
MEMBERS BENCHMARKING REALIGNMENT

MANAGE MEMBERSHIP
PROJECT MANAGEMENT CONTINUOUS INTERNATIONALISATION
RELATIONS
DEVELOPMENT OF
SERVICE PORTFOLIO
STAFF DEVELOPMENT

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Evaluation as an important lever for learning and improvement

Evaluation is a regular check involving documentation and reflection, Evaluation can also be a response to an acute issue like a financial
mostly at the end of a certain cluster development period. Thus, crisis or dissatisfaction on the part of cluster actors. We distinguish
evaluation usually makes sense after approximately 4 – 6 years between external and internal evaluation.
when actual impacts can be identified. Leading questions are if the
goals of the cluster development are unchanged, if the chosen
EXTERNAL INTERNAL
approach is the right one to achieve defined goals, and what can be
learned from experiences to date. An established impact-oriented ▪ an evaluator is commissioned ▪ solution-oriented methodology
monitoring system (cf. Establishment Phase – How to monitor from outside the cluster to carry which aims to enhance the
progress) forms an important basis for it. out the evaluation competence of those being
▪ mix of quantitative and qualitative evaluated to learn from the
interviews with representatives of experience
the various stakeholders and an ▪ interactive and implementation-
analysis of written planning and oriented learning process
reporting documentation ▪ diagnosis of the strengths and
▪ Often, workshops are held with weaknesses from the point of
cluster actors to enhance view of the relevant stakeholders
acceptance of results and and specific identification of
motivation for implementing starting points (“levers”) for
identified findings effective change
▪ An important basis is information
on the cluster results which have
been systematically collected and
stored

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Evaluation as an important lever for learning and improvement

How to assure a meaningful evaluation process ▪ The evaluators shall be experienced in two ways: Firstly, they
should be well experienced in running evaluations. Secondly, they
▪ Evaluation criteria shall be defined at the beginning of a cluster should have practical cluster experience to understand the
development period not just at the beginning of the evaluation findings and put them in the right context. Clusters are by nature
process. This gives the cluster organisation and related actors a complex and individual.
fair chance to take them into account during day-to-day work.
▪ Evaluators are not investigators, they should find areas of
▪ The preparatory activities shall be done in close cooperation improvements and stimulate learning and improvements.
between the cluster (organisation) and the body requesting the
evaluation (e. g. policy, donor etc.). The same holds for the ▪ Recommendations are an output of the evaluation and shall be a
indicators, evaluation design and the entire process. result of a common understanding between the evaluators, the
evaluated cluster (actors) and the requesting body.
▪ Cluster actors shall be informed since each evaluation causes Recommendations must be practical, meaningful and precise.
some uncertainty.
▪ The evaluated cluster (actors) and requesting body shall, in the
▪ The body requesting the evaluation shall clearly communicate end, jointly select those recommendations that appear to be
what the intended purpose of the evaluation is. appropriate to develop the cluster further
▪ The implementation of the evaluation findings shall be properly
monitored.

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Evaluating clusters / cluster projects

What indicators to look at
and how to measure best
Evaluation criteria can target cluster
policy, framework conditions, cluster
organisation or development of the
cluster actors.
All levels are possible, but not a must.
It depends on which level the
evaluation mainly targets at and
which purpose it should fulfill*.

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Evaluating clusters / cluster projects

Indicators to be used
(and not used) when
evaluating clusters
from creativity sectors
Based on voting of 13
European cluster experts.

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Towards professional cluster management

Benchmarking as a tool for cluster analysis A benchmarking exercise basically consists of three main steps:
In contrast to impact-oriented monitoring and conventional (1) Indicator-based measurement of cluster performance:
evaluations, benchmarking is an efficient and effective way to A cluster entity is measured according with various indicators
identify the potential of a cluster and to develop strategic covering the whole spectrum of cluster management and related
recommendations for its professionalisation within a relatively short activities. The measurement can be conducted through a
timeframe. structured interview or survey.
Benchmarking involves a comparative analysis of structures, (2) Analysis of data and comparison with peer clusters:
processes, products and services. It compares a cluster entity to Based on the measurement results, data is analysed and
peers in the same field of activity and/or to best practices from compared in relation to peer clusters.
entities in other areas. The objective of benchmarking is to identify (3) Derivation of recommendations:
concrete potentials for improvement in certain areas and to The benchmarking unveils relative strengths and weaknesses of
learn from better performing peers or other entities in order to the cluster entity. Now, specific recommendations for actions for
improve one’s own structures, processes, products and services. further improvement can be developed.
The benchmarking process should be conducted by impartial
experts. This is especially important for the interviews and the
development of recommendations for actions in order to avoid
whitewashing of the performance.

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Towards professional cluster management

The European Cluster Excellence Initiative (ECEI) In order to further promote cluster management excellence, the EC
asked the ECEI consortium to develop and implement an
The European Cluster Excellence Initiative (ECEI), which was internationally recognized labelling approach. By now, there are
initiated by the European Commission in 2009, developed three different labels for cluster management excellence in place:
methodologies and tools to support cluster organisations to improve BRONZE, SILVER and GOLD. Since then, the system has been
their management capacities and capabilities and eventually to established all over the world as an internationally recognized
become stronger clusters*. As a result, standard set of indicators to approach.
measure cluster management excellence was developed. This was
not just a European approach but rather a case that gained Nowadays, the European Secretariat for Cluster Analysis (ESCA)
international attention. Countries like Mexico and Russia embedded is the one-stop shop for offering quality labelling for interested
this approach in their cluster policies. The advantage of the ECEI cluster organisations.
approach was that it was applicable to any cluster at any stage of
maturity.
The European Cluster Policy Group in 2009 further recommended
European Member States engaged in cluster development to apply
these indicators in order to develop better (not more) clusters**.
For more detailed information on ESCA and the cluster
benchmarking approach, please refer to ‘further reading’ of this
subchapter where you will find the corresponding link.

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Towards professional cluster management

Cluster benchmarking criteria according European Structure of the Cluster
Cluster Excellence Initiative ECEI ▪ Retaining the actors in the cluster initiative / network
▪ Composition of cluster / network actors
Through the European cluster excellence programme and other
▪ Total number of cluster / network actors
capacity-building activities, the European Commission supports the
▪ Development of the total number of cluster/network actors
excellence of cluster organisations and the services that these small
▪ Regional focus of cluster / network actors
and medium-sized enterprise (SME) intermediaries provide to
specialised groups of small businesses. The European Commission
encourages cluster organisations from non-EU members to apply Cluster management organisation (strategy and governance)
these criteria*. ▪ Date of foundation or duration of existence of the cluster
The following criteria can be applied**: management organisation
▪ Staffing of the cluster management organisation
▪ Qualifications and experience of the staff employed in the cluster
management organisation
▪ Further training of the personnel employed in the cluster
management organisation
▪ Personnel fluctuation in the cluster management organisation
▪ Involvement of the different actor groups of the cluster initiative /
the network in decision-making processes
▪ Processes and activities for the development of the cluster /
network strategy
▪ Documentation of the cluster / network strategy
▪ Content controlling and further development of the cluster /
network strategy

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Towards professional cluster management

Financing Integration and interaction with the cluster actors
▪ Financial resources of the cluster management organisation ▪ Cooperation and communication between the cluster management
▪ Share of private sector financing in total budget organisation and the cluster / network actors
▪ Financial controlling ▪ Cooperation and communication between cluster and
▪ Development of the total number of cluster / network actors network actors
▪ Working groups within the cluster initiative / network
Range of services and activities of the cluster management
organisation Result generation, impacts and visibility

▪ Operational objectives and workplan of the cluster management ▪ Integration of the cluster management organisation into the
organisation regional innovation system
▪ Priority setting of the cluster / network strategy ▪ Internal and external communication of the cluster initiative /
▪ Activities and services of the cluster management organisation network
▪ Composition of cluster / network actors ▪ Internet presence of the cluster initiative / the network
▪ Total number of cluster / network actors ▪ Visibility of the cluster initiative / network in the media
▪ Development of the total number of cluster / network actors ▪ Success stories on cluster activities
▪ Key performance indicators for the performance review of the
cluster management organisation
▪ Achieved degree of fulfilment of the cluster/network strategy
and work plan
▪ Methods for measuring the satisfaction of cluster / network actors

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EXAMPLE
Cluster Baseline Observation – a new analytical approach

Cluster Observatory Africa – a new approach be measure job creation and job quality in African clusters

MAIN OBJECTIVE 3-LEVEL-APPROACH (see overview below) RESULTS

Goal of the Cluster (1) Analysis of cluster coordinator / organisation: Based on international good The findings were
Baseline Observation practices and selected European Cluster Excellence Criteria, a baseline can be assessed and commonly
approach, implemented defined for the maturity of the cluster management and related cluster structures. discussed. The
within the Cluster (2) Analysis of cluster actors: Interviews with a reference portfolio (min. 15 cluster firms assessment report also
Observatory Africa project representing a cross section of the cluster) were conducted to collect firm-level data. included a SWOT
(as part of the SI Jobs These are aggregated to represent the cluster as a whole. presentation considering
Initiative on Training and (3) Analysis of framework conditions: The approach also considered external the three levels.
Job Creation of GIZ), is to framework conditions, like infrastructure, business framework conditions and others. Based on this,
monitor job development interventions were
in selected African defined to strengthen the
clusters. The baseline selected cluster structures
study is implemented in in order to create more
2020. A repetition will be and better jobs.
done in 2022 with the In 2022: after re-doing the
same clusters and related observation, the impact of
firms. This allows to cluster development on
measure cluster impact the quantity and quality of
and why certain effects jobs within the clusters will
happened. be measured*.

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Realigning the cluster strategy

As mentioned, monitoring, evaluation and benchmarking provide key The update of the cluster strategy shall be built on what has already
learnings for further improvement of the cluster management as well been achieved. Hence, it is crucial to carry out a sound analysis of
as for the entire cluster development process. To go one step the status quo including questions like ‘What went well?’ and ‘Where
further, successful cluster development also needs strategic renewal to improve or what to change?’. This is the basis for revising the
from time to time. Constantly changing needs of cluster actors and strategic cluster concept including vision, goals, fields of action and
framework conditions require the cluster and related activities to be organisational structures. The active involvement of cluster
put under close scrutiny from time to time in order to adapt members is key to create acceptance and therefore ensure
accordingly. sustainability.

Implementation & Monitoring Status quo Analysis

▪ Gaining common understanding of key findings ▪ Starting point for strategic repositioning
with cluster actors
▪ Reviewing the status quo and achieved
▪ Introducing a new action plan goals reached (and not achieved )
▪ Transferring goals into concrete measures ▪ Identifying needs and challenges of
▪ Updating the (impact) monitoring system
4 1 cluster actors
▪ Announcing / publishing the new strategy ▪ SWOT

Update of Strategy Concept Vision & Goal Setting

▪ Redefining strategic fields of action ▪ Process of setting overall goal(s)
3 2 ▪ Mission orientation
▪ Developing and prioritizing of strategic and
operational goals ▪ Developing a future picture of the cluster
▪ Adaptation of service portfolio
▪ Adjusting organisational and governance structure

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EXAMPLE
Realigning the cluster strategy

The cluster Life Science Nord in Germany updated its strategy in 2018. When comparing with the old strategy from 2013,
some interesting differences can be found. Main driver for this adaptation were the different demands of cluster actor and
the increasing industrial transformation. Digitalization and sustainability are now dedicated action fields rather embedded i n
each of them*.

2013 2018

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Step-by-step approach to update the cluster service portfolio

The cluster services should be thoroughly scrutinised on a regular intervals. Identifying service gaps and/or dissatisfaction with existing
basis to ensure that the needs of cluster actors are well considered services must result in the modification of the service portfolio.
and addressed. This can happen within the framework of a cluster Here, it makes sense to call in an impartial consultant to ensure an
strategy update (every 4 to 6 years), but can also be done in shorter objective assessment.

01 02 03 04 05

Status quo Systematic inventory Profitability Member feedback Update service

(Cluster Manager) portfolio

▪ Listing existing services ▪ Mapping of existing ▪ Evaluating profitability of ▪ Participatory workshops with ▪ Adjusting or terminating old
▪ Services allocated to fields of services (see Dashboard existing services through the cluster actors services according to results
tool on following slide) lens of the cluster manager ▪
action (cf. Establishment ▪ Prioritizing of actors‘ Introducing new services
phase – identifying need- ▪ Identifying service gaps (cf. Establishment phase – if needed
expecations
based fields of action) based on cluster actors’ developing cluster services)
▪ Capturing actors‘ satisfaction ▪ Filling „White Spots“ according
needs ▪ Assessing the relevance of to profitability and members
with services offered
services for cluster actors needs
▪ Comparing self-assessment
▪ Comparing efforts for cluster
by cluster manager and
management to implement
member feedback
and expected recognition of
→ Match or mismatch?
cluster actors

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Systematic inventory through mapping existing services

Service dashboard tool as template to map and categorize existing services (exemplary illustration)*

Ecosystem-oriented Ecostem- & Business-oriented Business-oriented

New Products, Technologies, Business Models, Innovative Solutions
Long-term

Regional Development
IMPLEMENTATION

Skills Formation / Human Resources

Visibility / Marketing / Public Relation

Networking / Experience Exchange Business Development

Short-term

Regional Developer / Community / Policy PRIMARILY INTENDED FOR Members / Firms

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EXAMPLE
Further development and adjustment of service portfolio (1/2)

Comparing efforts for cluster management and expected recognition The Energy Cluster in Southwest Germany reviewed
of members at the Energy Cluster in Southwest Germany* its cluster services in 2018 and allocated them in this
profitability portfolio. It turned out that many services
caused significant efforts, but were included in the
membership fees. The cluster management
successfully turned three services (No. 2, 4, 9) into
9 1 Company visits
4 Joint 10 5 fee-based.
HIGH

8Stock 1 11 2 Project Management

2 Compan After conducting the self-assessment within the cluster
y Services covered by 3 Regional Marketing
Fee-based
Ltd. services Hybrid management team, it usually makes sense to also
membership
Organisati fees
Acknowledgement

4 Tailor-made Matching seek member feedback. As already mentioned, it is

by cluster actors

on 7
5 Talent Pool about identifying members‘ expectations regarding the
6 3 6 Trade Fairs importance of services and their current satisfaction
7 On the Spot
with services offered. Both dimensions will be
8 Innovation Support
compared in a second member-based portfolio to draw
Exclude Measures conclusions for the service development.
Check for discontinuation or offer for free 9 Product / Innovation
In the end, both portfolios from self-assessment and
LOW

Development
10 User-Supplier member feedback can be compared and enable
Matching targeted modifications of the service portfolio
HIGH Efforts LOW 11 Company visits according to actual needs.

= Fee-based

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EXAMPLE
Further development and adjustment of service portfolio (2/2)

Data-based evidence shows:

Professional need-based services result in higher benefits for cluster actors*

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Internationalisation as cluster service

Internationalisation is not only to be seen as tapping into new The following figure shows relevant phases of developing
markets and recognizing new market opportunities. For SMEs in international cooperation activities in clusters*.
particular, internationalization also means complementing value
chains. New product development can be initiated and research
partners may be found, which ultimately leads to an increase in
value added and an increase in innovation capacities in SMEs.

Orientation Phase Initiation Phase Implementation Phase Business Development Phase

HIGH

▪ Conducting a market study ▪ Visiting potential partners ▪ Tangible measures of ▪ Tangible B2B or R&D activities
▪ Initial workshop or ▪ Initiating and/or consolidating potential partners ▪ Follow-up through cluster
questionnaire for member contacts ▪ Identifying first business management
companies ▪ Building trust with partners opportunities Investment Readiness
▪ Initial delegation trip and/or ▪ Matching demands and needs of SMEs
trade fair participation ▪ Explorative measures
possible
LOW

Effort for Cluster

Management

DEFINITION OF INTERNATIONAL BUSINESS DEVELOPMENT

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Internationalisation as cluster service

As depicted, cluster managers can actively support the It is important to note that this sequence is not rigidly predefined
internationalization process for its member companies. The following when it comes to internationalisation activities (see also example on
process provides further overview of relevant steps to be taken. It next slide)*.
serves as further guidance to build an internationalisation strategy
and develop tangible measures with and for their cluster actors.

TARGET GROUPS GOALS WORKING GROUP

Segmentation of the ▪ Determining the strategic ▪ Agreement on process

members according corporate goals of members ▪ Determining criteria for the
to needs ▪ Deriving the goals for the "ideal market“
internationalisation strategy ▪ Participation of the members

PARTNERS INSTRUMENTS COOPERATION AREAS

Selecting partners for the ▪ Selecting Narrowing down

implementation of the internationalisation tools cooperation areas for goal
internationalisation strategy ▪ Cluster manager level achievement of members
▪ Cluster actor level

FEEDBACK MEASURES EVALUATION

▪ Presenting and discussing ▪ Action plan ▪ Relevance

the results with working group ▪ Scheduling ▪ Effectiveness
▪ Workshop ▪ Planning of resources ▪ Efficiency
▪ Impact

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EXAMPLE
Internationalisation (EU4SportsClusters 1/2)

EU4SportsClusters project The project was structured into different work packages,
carried out over two years:
The aim of the project was to support the internationalisation of sport
companies, especially SMEs, outside the European Union using the (1) Building trust
cluster approach. Moreover, the objectives were: ▪ Individual sports clusters benchmarking the potential partner
▪ To foster international cluster collaboration clusters
▪ To increase the visibility of sports clusters inside and outside ▪ Internationalisation working groups to conduct questionnaires and
Europe interviews with companies
▪ To improve and upgrade existing promotion programmes on ▪ Identification of suitable target countries based on results
international cluster activities ▪ Internal cluster peer to peer study trips and study tours to “best
▪ To develop a joint internationalisation strategy for the participating practice” clusters in the area of cluster internationalization
clusters
(2) Pilot missions:
▪ To communicate, disseminate and replicate these improvements strategic methodology being tested in Brazil and Russia
to other clusters

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EXAMPLE
Internationalisation (EU4SportsClusters 2/2)

The EU4SportsClusters missions to Brazil and Russia

The main actions carried out within the framework of both
the missions to Brazil have been illustrated as follows:

For more and detailed information on the whole

process, the activities and lessons learned, please
refer to ‘further readings’ of this subchapter where
you will find the link to the project document*.

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EXAMPLE
Internationalisation (Georgia 1/2)

Georgian Film Cluster

MAIN OBJECTIVE OPERATIONALISATION RESULTS

The main goal of the Georgian Film The GIZ project supported ▪ Several international productions and
Cluster is to promote Georgia as a location internationalization efforts over three post-productions have been brought to
for shooting international productions as years, enabling cluster members to the country, demonstrating the
well as post-production. participate in international film markets, competencies of the cluster to an
e.g. Berlinale and Cannes. Training and international audience.
capacity development by international ▪ The Georgian Film Industry grew four
experts were also offered. times during project duration*.

© GIZ (Office Georgia)

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EXAMPLE
Internationalisation (Georgia 2/2)

Georgian Furniture Cluster

MAIN OBJECTIVE OPERATIONALISATION RESULTS

The Georgian Furniture Cluster unites ▪ Improved product quality led to In 2019 the same group was able to exhibit
producers, designers and other enhanced visibility, including their own products in a special section at
stakeholders of the industry and helped opportunities for international exchange “Passagen” Cologne dedicated to
them improve the quality of their products. and access to international markets. Georgian Design Furniture*.
▪ In 2017 members toured a major
international fair in Cologne as visitors to
familiarise themselves with international
industry standards.

For more information, see the video of

the Georgian Furniture Cluster:
[Link]

© GIZ (Office Georgia)

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Developing staff competencies Technical knowledge:

▪ Knowledge of the cluster’s specific sector/industry/economic field
Dynamic cluster development requires on-going ▪ Technological expertise
▪ Market knowledge
competence building
Methodological skills:
Dynamic change within and beyond clusters through various ▪ Project management tools
transformation processes such as digitalization and green economic ▪ Innovation management tools
growth requires constant development of skills and knowledge of the ▪ Communication / PR / moderation skills including creative techniques
cluster management staff. ▪ Intercultural competencies
Cluster managers are expected to be well-grounded in a cluster’s ▪ IT / software / knowledge management skills
specific economic and technological field. This includes business as Strategic Management skills:
well as the relevant technical issues. ▪ Business consultancy know-how
Also, they must know the relevant policies and the policy makers. A ▪ Strategy development tools
key success factor is motivation and passion of cluster managers. ▪ Business Modelling
One has to be able to “sell” the cluster idea and to convincingly ▪ Leadership capacities, team management
communicate the benefits. Only then other cluster actors can be Process management and controlling skills:
sensitised and convinced to get actively involved in the cluster. ▪ Financial planning
In times of rapid change, cluster managers must be flexible in order ▪ Quality management tools
to continuously adapt the existing services to the needs of the Knowledge on cluster-related polices and funding programmes:
cluster. They must be prepared to terminate insufficient ones or ▪ Regional/national cluster-related policies
develop new promising support measures. (economic and innovation policy)
Regarding the job profile of a cluster manager, there are various ▪ Regional / national subsidies / promotion programmes
areas of competence that need to be further developed on a regular ▪ International subsidies / promotion programmes
basis. These include the following*: Language skills:
▪ Business English skills

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Developing staff competencies

Competence building in cluster organisations Training approaches
As previously mentioned, there are different areas of competence
where cluster managers should extend and deepen their capabilities Expert-level training, one-to-one
and knowledge on a regular basis. One can distinguish between mentoring, leadership skills EXPERT
basic, advanced and expert level of skills and knowledge.
In-depth seminars and practical
(1) BASIC LEVEL trainings on market / sector trends,
▪ Sufficient knowledge of cluster’s specific sector or economic field ADVANCED
advanced methodological skills
▪ Project management competence
▪ Adequate communication skills Training / Seminars on basic
▪ At least advanced English skills
technical / business knowledge, BASIC
methodological skills
▪ Limited work experience in cluster-related areas
(2) ADVANCED LEVEL
▪ Deeper knowledge of cluster’s sector or economic field
▪ Profound project and Innovation management skills
▪ Moderation skills Aside from individual HR development through systematic training
▪ Business fluent English skills, second foreign language agendas in the cluster organisation, it is important to further develop
▪ Professional work experience in cluster-related areas relevant knowledge and skills through other formats like:
(3) EXPERT LEVEL ▪ Attending cluster networking conferences – national and
▪ Specialised knowledge of cluster’s sector or economic field international
▪ Excellent presentation and moderation skills ▪ Attending policy events
▪ Business fluent English skills, second foreign language ▪ Company visits
▪ Comprehensive work experience in cluster-related areas ▪ Organising cluster management team-building formats
▪ Leadership skills

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FURTHER READINGS
▪ ACCIÓ (ed.). 2013, Best practices in internationalization for clusters. ▪ INNO-Net project CEE-ClusterNetwork. 2009. CMQ – CLUSTER MANAGER
Learnings from the EU4SportsClusters project. Retrieved from QUALIFICATION – Results of a comprehensive survey on tasks, skills & training
[Link] needs of European cluster managers. Project funded by EC, DG Enterprise and
article/indescat_doc_en_8_6._best_practiques_in_internationalization_for_ Industry. Retrieved from [Link]
clu_0.pdf, [accessed August 2020]. bcb8bbe3/files/uploaded/doc_1340.pdf, [accessed August 2020].
▪ Christensen, T., Laemmer-Gamp, T. & Meier zu Koecker, G. 2011. ▪ Kind, S. & Meier zu Koecker, G. 2012. Developing Successful Creativity &
Clusters are Individuals – Creating Economic Growth through Cluster Policies Cultural Clusters – Measuring their outcomes and impacts with new framework
for Cluster Management Excellence. tools. Retrieved from [Link]
Retrieved from [Link] developing-successful-creative-cultural-clusters, [accessed August 2020].
2013-creating-economic-growth-through-cluster-policies-for-cluster-
▪ Life Science Nord. 2019. Cluster Strategy 2024. Retrieved from
[Link], [accessed July 2020].
[Link]
▪ European Cluster Policy Group. 2009. Final Recommendation – A Call for Unsere%20Organisation/LSN%20Cluster%20Strategy%202024_en.pdf,
Policy Actions. Retrieved from [Link] [accessed July 2020].
[Link]/subsites/nic/[Link].
▪ Meier zu Koecker, G., Mueller, L. & Zombori, Z. 2011. European Clusters Go
▪ European Commission. n.d. European Cluster Excellence. Retrieved International – Networks and clusters as instruments for the initiation of
from [Link] international business cooperation. Retrieved from [Link]
[accessed August 2020]. docs/28c1b04a9c9f4294aa7a222aab31681f_European_Clusters_go_International.pdf.
▪ European Secretariat for Cluster Analysis (ESCA). 2012. Benchmarking as a ▪ microTEC Südwest e.V. n.d. Network. Added value for members. Retrieved from
Tool for Cluster Analysis. Cluster Excellence Makes the Difference. Retrieved [Link]
from [Link] [accessed August 2020].
[accessed August 2020].
▪ The World Bank. 2017. Uganda - Agriculture Cluster Development Project:-
▪ European Secretariat for Cluster Analysis (ESCA). n.d. Cluster Management Implementation Status & Results Report. Retrieved from
Excellence, Benchmarking, Eligibility Criteria, Labels. Retrieved from [Link]
[Link] [accessed August 2020]. [Link] [accessed August 2020].
▪ GIZ Georgia. 2020. Georgian Film Cluster. ▪ VDI/VDE-IT. 2020. Report Cluster Observatory Africa – Automotive Cluster
URL: [Link] [accessed August 2020]. Tunisia.
▪ GIZ Georgia. 2020. Georgian Furniture Cluster. URL:
[Link] [accessed August 2020].

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 PART 2 › Transformation phase

OVERVIEW OF PART 2:
TRANSFORMATION PHASE

▪ Introduction
▪ Step by step process for transforming
› STEP 1: Identifying trends and challenges
› STEP 2: Stepping beyond cluster boundaries
› STEP 3: Becoming integral part of an innovation ecosystem
▪ Further readings

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 PART 2 › Transformation phase / Introduction

From advanced operationalisation to transformation

Advanced cluster development is often a result of professionalising its management, implementing sophisticated services and b uilding
common trust among cluster actors over a long period of time. After a while, clusters are about to enter the next development level where
they are confronted with transformation processes. This means that clusters need to deal with issues concerning strategic for esight to better
respond to changing market requirements. What are relevant future trends for the cluster? How will the sector change? Which c hallenges
and opportunities will arise for the cluster and its participants? How will cluster-related economic structures transform due to increasing
convergence of technologies and changing market conditions? And how can a cluster respond accordingly by modernising and rein venting
itself?

8 KEY QUESTIONS when starting (5) Are there enough opportunities and encouragement among the
(1) Is monitoring and evaluation a basis for strategic learning? cluster actors to identify new trends and to turn them into new
(2) Is there a formal or informal change agent team? Can cluster ideas and actions?
managers be seen as “clusterpreneurs”? (6) Are change, innovation and sustainability topics for the
(3) Are cluster actors involved strategic processes? development of the cluster?
(4) Are the cluster actors sufficiently exposed to economic (7) Is there a simple vision for the cluster?
transformation activities? (8) Is this vision continuing to be actively communicated internally
and externally?

KEY ACTIONS The cluster is on the verge of becoming an active driver of transformation. Structures and activities that have been
successful in the past may now change with regard to future challenges. What are key fields of action? It should be noted that the following
sequence is not fixed and may vary from case to case.

1 2 3
Anticipating future
Going beyond cluster Driving future-oriented
developments and
and regional borders regional development
managing change

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 PART 2 › Transformation phase / Step by step

Step by step process for transforming

In order to develop towards a cluster that is capable of acting as an enabler of economic change and as a lever to reach
Sustainable Development Goals, sophisticated activities with regards to strategic foresight, cross -clustering and integrated
regional development need to be performed.

+ +
Identifying trends and Stepping beyond cluster Becoming integral part of an
challenges boundaries innovation ecosystem

CLUSTERS AS TOOL FOR

STRATEGIC FORESIGHT CROSS-CLUSTERING
REGIONAL DEVELOPMENT

CHANGE AND INNOVATION CROSS-BORDER

MANAGEMENT IN CLUSTERS COLLABORATION

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 PART 2 › Transformation phase / Step by step / Step 1/3 Identifying trends and challenges

Step 1: Identifying trends and challenges

+ +
Identifying trends and Stepping beyond cluster Becoming integral part of an
challenges boundaries innovation ecosystem

CLUSTERS AS TOOL FOR

STRATEGIC FORESIGHT CROSS-CLUSTERING
REGIONAL DEVELOPMENT

CHANGE AND INNOVATION CROSS-BORDER

MANAGEMENT IN CLUSTERS COLLABORATION

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 PART 2 › Transformation phase / Step by step / Step 1/3 Identifying trends and challenges * Kuenzel et al. 2016.

Strategic foresight
Industrial transformation and converging ▪ Many high-tech innovations require long development lead
technologies change the rules of the game times before they can be introduced to the market. The “Valley of
Death” of an innovation increases for innovations that depend on
The way in which innovation is created is different today than it was complex production processes or that involve new production
in the past. Different determinants and trends have been responsible processes as integrated elements of innovation.
for this:
▪ The role of intellectual property rights (IPR) and data
▪ Technologies have become increasingly convergent and now protection in innovation processes has changed. Established
penetrate a wide range of segments of the industry. (e.g. analogue protection mechanisms (patents, secrecy) compete with the new
voice telephony and digital data transfer) methods of innovation management (e.g. open Innovation). Also,
▪ The complexity of the individual innovations continuously goes new digital innovation ideas are often not initially covered by
beyond the technological capacities of a company. adequate cyber security solutions. This can create certain
economic risks.
▪ Many innovations are created by the connection and
combination of different technologies and industries. Within ▪ Considering the greater importance of green and circular
established industries, incremental innovations may generate economic acitivities, innovation processes and outputs must
important competitive market advantages. operate in an environmentally friendly and sustainable manner.
▪ Digital transformation, in particular, affects all industries in Taking into consideration the above-mentioned trends and
multiple ways. New digital products and services associated with determinants, innovation processes are becoming increasingly
the “platform economy” have hit the market with dynamic effects. demanding, complex and time-consuming, especially for SMEs.
Business processes and activities are moved into the digital realm Therefore, interactions between stakeholders with different
and business networks are now interconnected digitally across competencies are required more frequently*.
borders.

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Strategic foresight
Clusters as agents of dynamic transformation and foresightedness are becoming key factors and an integral parts
of the monitoring. In fact, a cluster organisation has to equip itself
The above-mentioned trends accelerate change processes and with new knowledge on a regular basis. They must be able to
increase challenges for companies to modernize and diversify their integrate it into service activities for the cluster actors. New cluster
business for future competitiveness. Clusters are by nature ideally activities where cluster management and cluster actors jointly map
suited to support bridging competence and/or capacity gaps of out future trends and challenges become increasingly relevant.
member businesses. Yet, the cluster management needs to take on
a new role. They must be well informed about specific members This changing role of clusters and the associated requirements and
needs. At the same time, they must also be familiar with relevant tasks will continue and even accelerate over the coming years.
trends and potential future developments with regards to cluster- The last chapter presents a more precise outlook toward 2030.
related technologies, value chains and market needs. Anticipation

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 PART 2 › Transformation phase / Step by step / Step 1/3 Identifying trends and challenges * Kuenzel et al. 2016.

Change and innovation management as key activity of clusters

Every cluster is in danger of “ageing”, losing dynamism and the system. These companies (depending on their size) employ at
ability to respond to new framework conditions. Even successful least one executive or a small staff division that is familiar with
clusters are not immune to losing their innovative strength as innovation management.
success sometimes leads to inertia. Preventing this and finding (3) Smaller enterprises (even if they are active in the high-tech sector
strategies for future success are the tasks of an active strategic or can be described as innovative) usually do not have a
learning culture and management. The basis for strategic learning structured innovation management. The standardized methods
and management is the will and the ability to derive the future from and procedures of innovation management are often too complex
the future and not from the past. However, this requires different or oversized or do not adequately take into consideration the
forms of collecting information and planning on the part of specific circumstances of the respective enterprises. At the same
management. Change and innovation management should time, SMEs are specifically dependent on external know-how.
therefore become a main field of activity in a cluster at the strategic
level as well as at the operational level. (4) Often, SMEs are unable to provide an appropriate strategic-
level effort for innovation processes within their own companies.
They are highly market (customer) driven and, most often, the
Which key aspects should be taken into
executive management is directly responsible for any innovation
consideration by the cluster management?* initiatives.
(1) Large and globally active companies have their own methods (5) SMEs are usually integrated into value chains, often as
and structures to deal with the internal innovation management suppliers. Original equipment manufacturers (OEMs) are at the
of the company. This also includes making decisions regarding other end of the value chains.
which of the innovation topics are to be dealt with in-house
exclusively and which of them are to be made the subjects of (6) Roadmaps, technology scouting, foresight processes, and
cooperative projects. similar methods for assessing future trends and market /
technology developments can provide a framework for the
(2) For medium-sized enterprises, there are usually standardised innovation strategies of individual companies. A commonly
methods for innovation management that facilitate the adopted cluster strategy helps SMEs to jointly track a broad
implementation and operation of an innovation management market or application spectrum.

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Change and innovation management as key activity of clusters

(7) With a cross-stakeholder innovation or cluster strategy, clusters (10) SMEs most easily find partners for innovation in the familiar
can identify and reduce the economic risks that lie in the environment of their own cluster. A condition for this, however,
innovation process for SMEs because they make the needs of is a professional cluster management. The more specific the
their customers more predictable. Industry roadmaps can be requirements, the more willing are stakeholders to engage in
similarly useful. supra-regional networks. This is especially the case in the
(8) Working groups (including innovation labs and innovation absence of a critical mass or sufficient competencies within their
arenas) initiated and coordinated by cluster or network own cluster.
management can be an ideal open innovation platform and a (11) Radical innovations are relatively rare. In daily business and
starting point for concrete innovation processes. when defining their service portfolios, cluster managements
(9) Cluster managements can also act as external innovation have their focus on incremental innovations. Providing support
experts for their member SMEs. They enjoy the benefit of trust for the transformation of sub-industries in the course of an
and neutrality as opposed to external consultants. Often, they implementation of radical innovations can also represent an
also act as project coordinators in later phases. important value-added service by cluster management.

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Methodologies for future-oriented cluster services

Select methods of strategic cluster innovation management

LEVEL CLUSTER-RELATED

Roadmapping, portfolio analysis, international determination of position,

Innovation strategy
cluster strategy, framework of SME strategy

Internal conditions Advanced training options, connection of industry and research, working
(Innovation culture) groups, innovation labs, open innovation arenas

Operative innovation Strengthen contacts with cooperation partners, innovation matchmaking,

management technology transfer

Joint purchasing platforms, recruitment of qualified personnel,

External conditions
contact with pubic authorities and multipliers

Transfer of results Common brands or processes, innovation packages

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Methodologies for future-oriented cluster services

Exemplary method: Roadmapping As a practical example, we would like to present the Visual
Roadmapping method here. Besides the technical aspects, this
Roadmapping means graphically noting methods in order to present method includes socio-economic factors of influence and effects on
complex scenarios including their dependencies in terms of time and the economy and society. Such questions are of critical importance
pathways. They are often used for complex projects to develop in connection with radical innovations. A visual roadmap categorizes
strategies for product families, industries, or even clusters. This the following four relevant aspects that address a specific problem
method is about visualizing the knowledge and the findings of (for example, industry development or topics relating to the
experts in a mode-rated dialogue, and reaching a consensus based corresponding value chain).
on the processes presented and the factors illustrated.
▪ Socio-economic factors of influence (legal, economic, social
This results in roadmaps or structural plans that provide insight into conditions, phenomena, and requirements)
the complexity, the critical development paths and the temporal
development of an industry*. ▪ Enabling technologies (scientific-technological requirements for
the respective topic)
The major advantages are:
▪ Development of the topic to be considered (central aspects and
▪ Visualization of complex processes milestones that are of importance for the development of the topic)
▪ Substantiation of statements and determination of events, ▪ Effects (economic and social effects, but also new product and
dimensions, and relations service offers)
▪ Reduction of complex connections and dependencies on the Recommended actions are articulated at the end of the process.
central aspects
▪ Multidisciplinarity through involvement of different expert groups
This method is also used in various research and development
areas, including product roadmaps, technology roadmaps, research
roadmaps, and industry roadmaps.

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EXAMPLE
Methodologies of future-oriented cluster activities

Visual Roadmap in the field of climate / environment / energy*

Basic template Result of moderated workshop with expert group

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 PART 2 › Transformation phase / Step by step / Step 2/3 Stepping beyond cluster boundaries

Step 2: Stepping beyond cluster boundaries

+ +
Identifying trends and Stepping beyond cluster Becoming integral part of an
challenges boundaries innovation ecosystem

CLUSTERS AS TOOL FOR

STRATEGIC FORESIGHT CROSS-CLUSTERING
REGIONAL DEVELOPMENT

CHANGE AND INNOVATION CROSS-BORDER

MANAGEMENT IN CLUSTERS COLLABORATION

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From sectoral to cross-sectoral cluster approach

Tapping into new cluster areas Service portfolio for the promotion of cross-cluster
collaboration
Innovation should not be seen as a target but rather as an
instrument to better prepare for industrial transformation processes.
During recent years, more and more cluster managements have Market Intelligence ▪ Roadmapping
recognized this potential. This is why innovation management has Identifying opportunities in other ▪ White papers
industries ▪ Market-studies tool
become increasingly relevant.
Furthermore, clusters have also recognized the potential of ▪ Cross-sectoral speed
Matchmaking

Strategic cross-clustering
collaborating across their industry boundaries within the

Networking across boundaries

dating
framework of structural change. As mentioned, innovation often Finding partners in other ▪ Competence mapping tool
happens through connecting and combining different technologies
industrial sectors ▪ Technology round tables
and industrial competences. This is why the understanding of the
cluster concept has changed towards “clusters of related industries”
Project Development ▪ Innovation platforms
Translating market intelligence ▪ Change management
and making better use of the complementarities among them to and matchmaking into cross- moderation
boost growth. Therefore, clusters operate beyond the borders of sectoral innovation ▪ special interest groups
industrial sectors by integrating different industries into an already
existing or newly established value chain to engage in cross- Technology Transfer
clustering*. Spreading capacity and ▪ Transfer concept
knowledge
How can cluster entities create a favourable
environment for facilitating cross-sectoral cluster Innovation Vouchers ▪ Meet & greet incentives
collaboration? Channelling funding through a ▪ Insight incentives
cluster organisation ▪ Collaboration incentives
There are multiple instruments and services that can be used by
cluster organisations to promote cross-clustering. The following
overview shows a good example of an integrated service portfolio Developing new value chains and emerging industries
geared towards cross-sectoral collaboration.

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EXAMPLE
From sectoral to cross-sectoral cluster approach (1/2)

Cross-Cluster Workshop “Aviation meets Wind Energy” Cluster-to-Cluster Matchmaking

The increasing proliferation of off-shore wind parks has led to icing Going international can take on a new dimension when shifting from
issues on the wind mill blades during winter seasons. While this is a export promotion to engaging other clusters as “problem solvers”.
relatively new issue for off-shore wind producers, it is a well-known Often, cluster actors from smaller countries must “go international” in
problem for companies in the aviation sector. In 2017, the order to find competitive partners that can help to solve their
Renewable Energy Cluster Hamburg and the Hamburg Aviation problems. This is a core aspect of international cooperation.
cluster bundled their respective competences to jointly solve this
International cluster matching are good platforms to meet and to be
challenge. Cross-Clustering was the key to success. The matching
met. In a 2017 meeting in Germany, the matching of problem
of the problem solver with problem owner was moderated by the
owners with problem solvers resulted in 15 dedicated cross-
cluster managers.
clustering projects.

© Cluster
Renewable © ClusterAgentur
Energy Hamburg Baden-Württemberg

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 PART 2 › Transformation phase / Step by step / Step 2/3 Stepping beyond cluster boundaries * Information provided by GIZ Serbia.

EXAMPLE
From sectoral to cross-sectoral cluster approach (2/2)

Business Bridges/Digital Transformation in Serbian Automotive Industry,

clusters: Automotive Cluster Serbia & ICT Central Serbia

CHALLENGE CLUSTER KEY FACTORS & INSTIGATORS RESULT

OBJECTIVE FOR SUCCESS

Global trends such as digital To develop a format (Business First step was the assessment A number of small and medium-
transformation, digitalization of Bridges) to initiate cross- and analysis of demands for IT sized enterprises that
value chains and manufacturing industry cooperation and solutions for Serbian companies participated in the Business
specific elements like Industry increased IT solution usage in based on interviews with German Bridges confirm that new ICT-
4.0 increasingly have impacts non-IT industries. buyers and Serbian suppliers. As solutions have contributed to
on all industries and sectors in a second step, conferences took the improvement of their
Serbia. The degree of place regularly with members of business performance. New
digitalization of business both AC Serbia and ICT Central opportunities for cross-industry
processes within industries, Serbia cluster on important cooperation have been created
between players of (horizontal) digitalization and Industry 4.0 via B2B meetings. A number of
value chains and within single trends, presented by large enterprises show positive
companies (vertical value automotive companies (OEM and development in increases in
chains) will increase TIER1) and IT companies. B2B sales or product development
enormously in the coming few meetings between companies and innovation*.
years. from various sectors are a vital
part of these conferences. Finally,
workshops on most relevant
digitalization topics in the
automotive industry are being
organised.

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Step 3: Becoming integral part of an innovation ecosystem

+ +
Identifying trends and Stepping beyond cluster Becoming integral part of an
challenges boundaries innovation ecosystem

CLUSTERS AS TOOL FOR

STRATEGIC FORESIGHT CROSS-CLUSTERING
REGIONAL DEVELOPMENT

CHANGE AND INNOVATION CROSS-BORDER

MANAGEMENT IN CLUSTERS COLLABORATION

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 PART 2 › Transformation phase / Step by step / Step 3/3 Becoming integral part of an innovation ecosystem * Keller et al. 2018. / Foray & Goenaga. 2013. / Sedlmayr et al. 2019.

Role of clusters in regional economic development

As already pointed out in chapter 2, professional and well- However, while they are not the only innovation actor in the region,
performing clusters represent a critical mass of competences, they can be a suitable tool for promoting regional innovation and
market knowledge and business intelligence in certain industrial or related economic policies. That is why they can assume an active
technological fields. Clusters can serve as ideal vehicles to role during all phases of regional development.
implement priorities and open up new paths for a future-oriented As far as regional innovation or economic strategies are concerned,
transformation of regional economic and innovation systems. This there are many potential key players. The figure on the next page
applies to both, the strategic and the operational level. Professional reveals that clusters can become key drivers for strategy
cluster organisations foster close relations with cluster actors. This development and implementation due to their embedded
enables them to gain market intelligence prepare for continuous competence and market intelligence.
adaptation to new framework conditions*.

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 PART 2 › Transformation phase / Step by step / Step 3/3 Becoming integral part of an innovation ecosystem * Figure based on Meier zu Koecker, et. al., 2017.

Role of clusters in regional economic development

Actors of a regional development process*

Economy Research Technology Politics Regional Development
Transfer

Companies Chambers/ Universities/ Technology Regional Economic Cluster

Unions Research transfer /Inno- politics development initiatives
institutions vation centers

Analysis Regional capabilities

Global megatrends

Develop- Identification of
ment structure-changing
processes

Definition of
strategic foci

Imple- Tools / Methods

mentation
Implementation of
activities and actions

Evaluation and per-

formance
measurement

Active involvement necessary Active involvement preferable Reactive involvement

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Role of clusters in regional economic development

Today more than ever, regions are interested in predicting future The key question then is: What are the transformative activities of
transformative trends. History has shown that just following global tomorrow that can entirely change a given sector? Transformative
trends does not necessarily lead to the desired success. For activities can be understood as a certain innovation capacity of a
example, in the 90s, many regions invested in biotechnology. group of actors. These are derived from current cluster structures
However, only a few really succeeded. What was neglected was the but have the potential to significantly transform existing industries.
aim to remain competitive on a global level; interventions must be Identifying these transformative activities is a key to keep a region in
built on existing capacities in existing clusters. a competitive position. It is understood that transformative activities
vary from region to region*.

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Role of clusters in regional economic development

The S3 Synergy Diamond* has proven to be an appropriate tool for The so-called Entrepreneurial Discovery Workshop (EDW) is a
identifying such transformative activities, based on existing clusters. promising tool used by cluster managers with select cluster actors to
As illustrated below, clusters in a given region (or on national level) identify such transformative actions**. In close collaboration with
are positioned at the corners of the Synergy Diamond. regional development agencies and policy makers, appropriate
Transformative activities can be identified at the edges between the strategies and policy measures can be derived to support the
corners (i.e. between the existing capacities of the two clusters). development of these transformative activities. As illustrated below,
the transformative activities identified on the edges of the Synergy
Diamond in 2018 are now integrated parts of the Regional
Innovation Strategy of the Lombardy Region in Italy. Similar EDWs
were just implemented in Tunisia to identify transformative activities
that drive Tunisia’s industries of the future.

Synergy Diamond for Lombardy Region (Italy), 2018,

prepared by VDI/VDE-IT.

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FURTHER READINGS
▪ Bovenschulte M. & Hartmann, E. & Kind, S. 2011. The Method of Retrieved from
Visual Roadmapping for Trend Analysis, Roadmapping and [Link]
Visualisation of Expert Knowledge. ter-collaboration-and-business-support-tools-to-facilitate-
Retrieved from [Link] entrepreneurship-cross-sectoral-collaboration-and-growth_en_0.pdf,
e7329e901494447aa688cacc81d19480_iit_perspektive_04.pdf, [accessed August 2020].
[accessed August 2020]. ▪ Meier zu Koecker, G., Grieb, B. & Schneider, K. 2016. Success
▪ Foray. D., Goenaga, J. 2013. The Goals of Smart Specialisation. S3 Through Thinking out of the Box – Strategic differentiation in
Policy Brief Series. No. 01/2013. European Commission Joint enterprises initiated by cluster initiatives. Retrieved from
Research Center. [Link]
[Link]/downloads/publikation/Publikationen/download/dokument/succe
▪ Foray, D., Keller, M., Bersier, J. & Meier zu Koecker, G. 2018.
ss-through-thinking-out-of-the-box/, [accessed August 2020].
Transformative Activities for Smart Specialisation: Considerations on a
Workshop Methodology. Retrieved from ▪ Meier zu Koecker, G., Schneider, K. & Grieb, B. 2017. Cluster
[Link] Initiatives as Path Maker for Regional Innovation Development.
[Link], [accessed August 2020]. ▪ Meier zu Koecker, G. 2019. StressTesting Regional Approaches
▪ Keller, M., Bersier, M., Dermastia, M. & Meier zu Koecker, G. 2018. Conducive to Implement S3 through Clusters in the Western Balkan.
Smart Specialization Strategies (S3) and Clusters – An Innovation Retrieved from
Model for Transformative Activities, In: fteval Journal for Research and [Link]
Technology Policy Evaluation, Issue 47. doi:10.22163/fteval.2019.325. egional_Approaches_Conducive_to_Implement_S3_through_Clusters_
▪ Kuenzel, M., Meier zu Koecker, G. & Koehler, T. 2016. Clusters and in_Danube_Region, [accessed August 2020].
Innovations – Cluster Initiatives as Drivers of Innovations. Retrieved
▪ Sedlmayr, B., Noegel, L., Wittpahl, V., Grieb, B. & Meier zu Koecker,
from [Link] G. 2019. Understanding Regional Transformation Processes – New
Publikationen/download/dokument/clusters-and-innovations-cluster- Instruments for Regional Strategy Development, Working Paper of the
initiatives-as-drivers-of-innovations/., [accessed August 2020]. Institute for Innovation and Technology (iit). Retrieved from
[Link]
▪ Laemmer-Gamp, T., Meier zu Koecker, G. & Nerger, M. 2014. Cluster
perspektive_Nr_43_ENG.pdf, [accessed August 2020].
Collaboration and Business Support Tools to Facilitate
Entrepreneurship, Cross-sectoral Collaboration and Growth.

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page 209 Cluster Development Guide – A Practitioners Guide for Cluster Policy, Strategy and Implementation
 OUTLOOK / Overview

OVERVIEW OF
OUTLOOK

▪ Clusters as agents of regional and economic transformation

▪ Strengthening strategic cluster partnerships
▪ Clusters as agents to manage crises and rapid transformation
▪ Clusters 2030 – International Experts Venturing a Prediction
▪ Further readings

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 OUTLOOK / Cluster as Agents of regional and economic Transformation

Clusters as agents of regional and economic transformation

Unique knowledge about local actors and the
specific characteristics of a region
The essential role that clusters can play in the context of regional
development is often underestimated. Through intensive contact and
collaboration with local companies, professional cluster
management can build up an in-depth knowledge of their Clusters as agents of regional and
competencies, challenges, ideas and working culture. economic transformation
While this knowledge is still rarely used in the context of regional
development, it is well-positioned to contribute to the positive
development of a region
Clusters as agents able to manage
▪ In the long term, a cluster can offer an integrated strategic
global and national crises
approach to successfully tackle the transformation of the region.
▪ In the short term, a cluster can serve to confront sudden economic
crises (e.g. COVID-19) where quick support for urgent problems is
needed.

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 OUTLOOK / Cluster as Agents of regional and economic Transformation

Clusters as agents of regional and economic transformation

The role of clusters as agents of regional and Cluster managements face increasing complexity
economic transformation will continue to grow The role of clusters changes and increases in complexity.
Technological convergence based on digitalisation and other Megatrends such as digitalisation and resource efficiency present
innovations serve as levers for modernising existing business far-reaching transformations with significant impact on businesses of
processes and for creating new business cluster members.
models. Resource efficiency and environmental pressures are main They comprise additional associated technological and social ‘sub-
drivers for clusters to advance beyond their original sectoral realm. trends’ such as industry 4.0, artificial intelligence, smart and
Clusters are becoming an important tool for the holistic development sustainable mobility and more. The many trends need to be properly
of the regions in which they are located. However, in order to filtered and translated in terms of their relevance to the development
successfully shape the transformation and sustain future of a cluster and its entire ecosystem. Targeted support for cluster
competitiveness of the ecosystem, these competences have to be actors on the one hand and professional advice for policy makers on
interlinked and complemented with expertise from scientific experts the other hand will increasingly depend on successfully filtering and
and other professionals from partner clusters in translation of those trends.
other regions. Mission-oriented strategic goals targeting
transformative trends must be defined and underpinned with
measures that are collaboratively implemented by all relevant actors
of the ecosystem.
Moreover, cluster development is no longer only about developing
the cluster itself. It constitutes an important piece of the effort to
successfully transform the ecosystem sustainably: economically,
socially and ecologically. Meeting Sustainable Development Goals
(SDG) will be a major indicator in cluster developments in the future.

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 OUTLOOK / Cluster as Agents of regional and economic Transformation

Clusters as agents of regional and economic transformation

Clusters as experts and translator of trends

Industry 4.0
Digitalization
Social Innovation Policy
Carbon Free
Cloud Computing
Artificial Intelligence Mission-oriented
FILTER/ COMMON
Resilience TRANSLATOR ACTIONS towards SDGs

E-Mobility
Block Chain
Cluster members &
Global Value Chains partners
Virtual Reality
Circular Economy
…

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Clusters as agents of regional and economic transformation

How to meet these complex
requirements as a cluster
management?
NETWORKING TECHNOLOGY/SECTOR
Competences must be bundled to know EXPERTS EXPERTS
about trends relevant for a cluster‘s
development. It is necessary to filter and ▪ Calm and friendly ▪ Technical Know-How
translate them in a targeted way for the ▪ Self confident and ▪ Branch / Sector
benefit of cluster actors, policy makers ambitious Knowledge
and other stakeholders. ▪ Communication kills ▪ Future Trends
▪ Empathy ▪…
The composition of the cluster ▪…
management team becomes more crucial
than ever before. Skill requirements must
be wisely identified and corresponding TOOLS AND ORGANISATIONAL
gaps need to be addressed. INSTRUMENTS MANAGEMENT SKILLS
▪ Strategy ▪ HR-Management
▪ Action Plan ▪ Financial Management
▪ KPI ▪…
▪ CRM
▪ …

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Clusters as agents of regional and economic transformation

Supplementing expertise through strategic Different pathways and motivations for strategic partnerships are
partnerships possible. For example:
▪ Cluster-to-cluster collaboration for mutual learning on cluster
In times of digitalization, economic and socio-ecological
management level (e.g. skills development for cluster managers,
transformation, clusters are required to set up professional cluster
technological trends, best practices of cluster services, etc.)
management teams covering different fields of expertise and to
closely collaborate with the cluster actors. What is more, to increase ▪ Identifying international innovation hot spots and approaching
the innovation capacity of clusters and its members, cross-cluster technological leaders for potential collaboration
and cross-border collaboration gain more and more importance. This ▪ Untapping new international markets relevant for cluster actors
contributes pooling competences and resources through joint
strategies and joint projects. ▪ Initiating or sustaining cross-border partnerships on B2B level
regarding commercial activities
▪ Initiating international joint R&D projects among cluster actors
Therefore, building and sustaining cross-border partnerships across
industrial and technological boundaries becomes a key task of
professional clusters.

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 OUTLOOK / Strengthening strategic Cluster Partnerships * Kleinpeter. 2013.

Strengthening strategic cluster partnerships

Beyond cluster internationalisation The work of the European Cluster Excellence Initiative (ECEI) in
2009 revealed that two aspects became more and more important in
Although clusters are characterised by proximity of actors, there connection wirh cluster internationalisation:
have been several attempts to give clusters a more international and
global dimension. Approaches, like the “Virtual Cluster Initiative” ▪ Long-term: Internationalisation, as cluster development itself, is a
aimed to strengthen the competitiveness and to increase the level of long-term process. Many cluster internationalisation efforts failed
awareness of the SMEs involved through promoting cross-border because the partners involved were only looking for quick wins.
links between specialised hubs and innovation hubs*. However, this Better outcomes resulted from efforts where cluster initiatives
effort failed since the added value compared to firm-based strategic were engaged in internationalisation efforts over a longer period.
partnerships and the traditional cluster internationalisation ▪ Strategic: Positive impacts resulted from those cases where
approaches were comparatively low. international cluster partnerships aimed at a higher and more
Nevertheless, there was a need to use potential cluster initiatives for strategic level.
more than export promotion or initiatiting joint R&D projects funded Consequently, the European Commission adapted their cluster
by multilateral donors (as was common 15 years prior). initiationalisation policy to implement new support schemes to help
cluster initiatives to enter long-term internationalisation
engagements with a strategic dimension. Two succesfull support
schemes are presented on the right.

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 OUTLOOK / Strengthening strategic Cluster Partnerships * European Commission. 2019. / ** European Commission. 2020.

Strengthening strategic cluster partnerships

Building and sustaining international cluster The European Strategic Cluster Partnerships are comprised of
partnerships – the European approach​ two modules:​
(1) The European Strategic Cluster Partnerships for Going
The increasing relevance of international cluster partnerships has
International (ESCP-4i) is designed to develop and implement
already become a central topic in European cluster policy. The
joint internationalisation strategies to support SME relationships
European Commission launched the „European Strategic Cluster
with third countries. They contribute to the development of
Partnerships“ through financial incentives to encourage clusters
common actions such as business missions, cooperation
from Europe to actively build up collaboration across regional and
agreements, gateway services, export consortia, and more. This
sectoral borders. These partnerships aim at bundling resources and
effort is designed to strengthen the access of European SMEs
knowledge in order to elaborate joint strategies with concrete actions
to specific third markets and initiating a long-term cooperation
for the benefit of the SME members. ​
agenda with strategic partners in third countries*.​

(2) The European Strategic Cluster Partnerships for Excellence

(ESCP-4x) are transnational cluster partnerships selected under
the European Cluster Excellence Programme as part of the
European Commission’s COSME programme. The action is
designed to facilitate cross-cluster networking and learning as
well as to support the professionalisation of specialised and
customised business support services for SMEs. The action will
help drive the development of cluster management excellence
and formation of strategic cross-regional collaboration among
industrial clusters across Europe**.

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 * VDI/VDE-IT. 2020. Unpublished study on behalf of
OUTLOOK / Strengthening strategic Cluster Partnerships Regional Development Agency of Odense (Denmark).

EXAMPLE
Strengthening strategic cluster partnerships

Building collaboration between Danish and German cross- On the Danish side, the overall goal was to identify relevant German
border ecosystems of robotics and industrial electronics​ innovation clusters as well as to pinpoint potential cooperation
partners along the value chain in Northern Germany. The study
In 2019, a study on the potentials of strengthening the Danish and
included, among other things, hands-on recommendations on how to
German cross-border collaboration in the fields of robotics and
initiate cluster-to-cluster collaborations around technical R&D
industrial electronics was conducted.
projects, commercial activities and attraction of professional talent*.

Methodological steps applied: Potential entry points for cross-border activities along the value chain:
Detailed analysis of 200,000 publicly co-financed
Analysis of R&D data R&D projects in Germany.

Identification of German R&D key actors from System Approaching identified top system
Identifying key actors academia and industry as well as their R&D scope. Approaching German clusters to
Cluster-2- integrators & integrators specialising in specific
target end-users from specific
Cluster application application fields (especially food
To further qualitatively evaluate key actors industrial fields
Expert opinions firms processing)
and identify additional actors.

According to the criteria agreed upon with ▪ 14 different universities

Shortlisting of key actors Danish cluster managers. ▪ Step-by-step to get access to
identified, some of them
Open R&D collaboration platforms Partnering
involved in clusters
Characterization of relevant actors based on platforms ▪ B2B collaboration for jointly universities
Profiles on key actors
publicly available information. ▪ Talent initiatives as starting
developing innovative solutions
point
Interviewing cluster To validate and verify potential interest for
managers cross-border collaboration.
▪ Approaching firms experienced
R&D active and active in value chain step
Identification of entry Development of hands-on strategies „Research & Design“
Points for collaboration on how to best approach the target group.
firms
▪ Initiating joint R&D projects
Identification of partners Analysis of academia with regards to attracting
from academia talents to the strongholds.

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 OUTLOOK / Cluster as Agents to manage Crises and rapid Transformation

EXAMPLE
Clusters as agents to manage crises and rapid transformation (1/2)

It is well known that crises often serve to initiate industrial change.

What is often overlooked is that in many cases, cluster initiatives
have served as change agents. The following two examples
illustrate this.

The AVEASEN Case (Financial crisis 2008 – 2010)

The financial crisis in 2008 has left its mark in Spain. Due to budget Faced with these challenges, AVAESEN and its cluster actors
constraints, the Spanish Government slashed subsidies for needed to radically reinvent themselves. Given that the Spanish
renewable energy projects. This included wind and solar energy renewable energy sector was gridlocked, the cluster actors were
parks which were already installed with “guaranteed” government forced to diversify their offers in the Spanish market (e.g. energy
support for 10 to 20 years. Consequently, international investors and efficiency, smart cities, circular economy). They also expanded their
pension funds promised to ban the renewable energy in Spain core activities in renewable energy-friendly markets internationally.
altogether. In addition, many Spanish renewable energy SMEs went Through the Tailored Action Plans, AVAESEN supported its cluster
bankrupt. In the Valencian region, the number of SMEs dropped actors in this shift, acting on their most urgent ‘pain points’ (new
from 235 to less than 100. Obviously, all of this also negatively clients, financing, visibility, internationalisation and partnerships). As
impacted the functioning and sustainability of the Valencian Region a result, today 80% of AVAESEN’s members are internationally
Renewable Energy Cluster (AVAESEN). This had two active, whereas previously only 20% where active in foreign
consequences: cluster transformation and market adaptation. markets. There is a common understanding that AVAESEN and the
cluster team were the key drivers in this crisis-related transformation
process.

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EXAMPLE
Clusters as agents to manage crises and rapid transformation (2/2)

The Alliance for fibre-based materials – AFBW

(COVID-19 crisis 2020)
During the COVID-19 pandemic, there was a global shortage of The AFBW Academy offered a tutorial that explained to cluster
masks and personal protective equipment. Many firms and clusters actors exactly how to meet the requirements for respirators. In
worldwide successfully shifted textile production to mask and addition, contacts were established with local testing laboratories to
personal protective equipment. Whereas most firms in developing ensure the high quality of the masks and mandatory certification. As
and developed countries succeeded to produce basic cloth face a result, the cluster actors were enabled to produce protective
masks, only a small number succeeded to become supplier for masks and get them tested and certified.
hospital and nursing homes by meeting higher safety standards
Furthermore, AFBW started lobbying and engaging in policy
(FFP2).
advocacy campaigns to advertise the new local suppliers to the local
The cluster management of AFBW realized the huge opportunity for government. It increased the pressure on the regional government
local textile firms to become suppliers for public health system if they not to import uncertified masks and protective equipment from
could succeed in producing personal protective items like filtering abroad rather than purchase certified items locally. Almost
facepiece respirators by meeting European and international overnight, around 65 cluster actors of AFBW shifted their temporary
standards. production. Even now, months later, many of them are still active in
the textile health production business.

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INTERNATIONAL EXPERTS VENTURING A PREDICTION

Clusters 2030 – Expert opinion (1/6)

Christina Leucuta, Senior Advisor, ▪ Migration of clusters from a sectoral approach to a more
CLUSTERO – Romanian Cluster Association mission-oriented approach (i.e. from Textile cluster towards
Creative Cluster, from Agro-food cluster towards Life style Cluster):
This will provide multiple collaboration opportunities and possibly
How will the role of clusters change by 2030? What are new new funding sources. The new national and regional smart
opportunities for clusters in the future? specialization strategies will consider clusters as main pillars for
▪ Clusters will play a crucial role in developing value chains: the national and regional development and for the industrial
Global value chains will undergo a drastic transformation in the transformation.
decade ahead. The change will be driven by a push for greater
supply chain resilience due to COVID-19, which adds to existing What are potential risks related to the cluster approach?
pressures from the technological revolution. While these will The lack of a dedicated support for clusters may lead to the
present daunting challenges, they will also offer ample disappearance of clusters where the private sector is not yet strong.
opportunities for firms and states alike and will lead to a paradigm We need new, agile and cutting-edge instruments if we really want to
shift concerning global value chains development. Clusters will reinvent sectors and more sophisticated business models.
position the European businesses on these transformed global
value chains and will offer the way to secure and increase decent
and sustainable jobs through a process of re-skilling and up-skilling
of employees and entrepreneurs.
▪ Boosting smart interregional collaboration through clusters
inclusively with emerging countries: This is vital for supporting
innovation, industrial modernization and the scaling up of SMEs. At
the same time, the collaboration through clusters offers multiple
opportunities regarding the exchange of experience and good
practices regarding the fulfillment of the objectives of the 2030
Agenda for sustainable development.

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INTERNATIONAL EXPERTS VENTURING A PREDICTION

Clusters 2030 – Expert opinion (2/6)

Enric Pedros, Cluster Manager, What are potential risks related to the cluster approach?
Cluster FEMAC in Catalonia, Spain
When the theoretical model of Clusters began to be implemented in
industrial policies throughout the different regions of the world, they
were considered instruments of change in order to reinforce
How will the role of clusters change by 2030?
competitiveness. But nowadays, the new technologies make change
Clusters will have to become business units by 2030. I am not sure if occur without barely glimpsing before, a trend that warns you of the
they become venture capital or just venture innovation units or a mix change. Industrial, European, national or regional policies are late!
of both, or why not a prescriber or sales channel. Increasingly The Cluster model as we knew it 20 years ago has expired. Before,
changing roles among the members, the faster versus the bigger, the we were the bridge between companies - the private sector -
most agile versus the most consolidated, the new market rules knowledge centers - universities - and the public sector. Our role
(increasingly changing), the complexity of business will force clusters must change, we must "understand change“ “from within”, and this
to take a new role, but not only as mere drivers of innovation. means to understand social changes, climate change, and to act
much more quickly. The time between analysis, design and
What are the new opportunities for clusters in the future? implementation of industrial strategies has become so narrow that
part of the cluster's role as a lever for change has decreased.
▪ The opportunity will come from two fronts: The need for SMEs to
join forces to respond to a more sophisticated and complex
demand, but also from the need to incorporate new production,
sales and innovation processes, which will make it necessary for
clusters to play a more active role in their decision.
▪ In times where "fast" matters, another opportunity could appear
when the European Commission and National authorities realize
that the cluster system is the most efficient and "fastest" instrument
for the management and transfer of funds for companies and
knowledge. But to do so, we must first reduce the public bureaucracy.

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INTERNATIONAL EXPERTS VENTURING A PREDICTION

Clusters 2030 – Expert opinion (3/6)

Mareike Boll, Advisor Competence Center Environment & socially fair and responsible business practices as well as economic
Steffen Felix, Sector Project Sustainable Economic viability. Through the provision and use of economically,
Development, Gesellschaft für Internationale Zusammenarbeit environmentally and socially shared services within the industrial
(GIZ), Germany parks, companies in those parks can become more competitive,
maintain social standards, and better address environmental
challenges. Adopting such an approach and complying with
How will the role of clusters change by 2030? international standards can increase an industrial parks reputation
and thus attract further investments.
An important subset of clusters are industrial parks (and a further
subset of those are special economic zones). Worldwide, we are
witnessing a growing interest of governments to establish industrial What are potential risks related to the cluster approach?
parks as a driver of industrialization. Global crises, such as climate The success of clusters and industrial parks is dependent on their
change, air pollution and the Covid-19 pandemic mean that ability to compete and to offer cost-effective solutions. But many
countries, customers and companies are increasingly interested in industrial parks lack technical capabilities, management resources
standards to ensure that production processes are sustainable and and financial means. Therefore, adopting a more sustainable
inclusive. In order to respond to this trend and to promote structural approach as described above can be difficult. But if that is not done,
transformation, industrial parks will likely want to play a more active then industrial parks risk their reputation and will be seen as spaces
role in becoming more sustainable with regards to their social, that lack social rights, environmental protection and economic
economic and environmental impacts. viability. So the end game is clear, it is now about making it
happen…
What are the new opportunities for clusters in the future?
Industrial parks have the opportunity to become more sustainable.
The cluster as well as the industrial park approach adopted by GIZ
(see Sustainable Industrial Areas) ensures environmental protection,

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INTERNATIONAL EXPERTS VENTURING A PREDICTION

Clusters 2030 – Expert opinion (4/6)

Hannes Finkenbrink, Advisor Economic Policy and relationship for very specific Knowhow is in balance. Accordingly
Private Sector Development, Gesellschaft für Internationale access to global talent and adequate migration policies will gain of
Zusammenarbeit (GIZ) significance.
▪ Sustainability in the value creation process will cease to be a nice
to have but become a mainstream competitive factor. New industry
How will the role of clusters change by 2030? standards in terms of ecological efficiency will be a requirement to
What are the new opportunities for clusters in the future? participate in many lucrative industries. Only clusters that can
▪ Some industries and value chain elements will geographically provide these standards will be attractive for foreign direct
disintegrate and form new virtually connected clusters. These investment.
clusters access expertise from anywhere on the globe (this applies
for instance to research and development, software production, What are potential risks related to the cluster approach?
analytics, virtual support, medical supplies). Key challenge will be
▪ A political disintegration of regions that will cut access to
how developing countries can contribute to these virtual clusters
markets and Know-how.
and what infrastructure (soft and hard) is required to connect to
them. ▪ The rise of virtual clusters that will dissolve existing physical
clusters in selected industries and for selected value chain
▪ Ongoing automation and the fear of VC disruptions will decrease
elements.
the significance of labor costs in many more industries while
increasing the significance of knowledge and expertise.
Accordingly the significance of industry relevant knowledge
creating institutions (think thanks, R&D, academia, vocational
training, etc.) for the competitiveness of a cluster will continue to
increase (knowledge based cluster). The competitive edge will be
created through the quality of the link between companies and the
knowledge creating institutions so that the supply and demand

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INTERNATIONAL EXPERTS VENTURING A PREDICTION

Clusters 2030 – Expert opinion (5/6)

Dr. Gerd Meier zu Koecker, Managing Director, What are the new opportunities for clusters in the future?
ClusterAgentur Baden-Württemberg, Germany There is a huge opportunity for clusters to play a stronger role in
regional development. For this purpose they have to understand that
regional developers and policies are another key client besides the
How will the role of clusters change by 2030?
private sector. Policies and government has not been understood as
Successful cluster approaches have shown what cluster-based funding providers rather than as client to be served. This makes it
regional development can achieve, if it is done right. Thus, clusters necessary that cluster managements better understand how policy
will play a stronger role in (regional) economic development. We will and regional development happens.
see a shift from clusters as drivers for productivity and innovation
towards cluster as a more flexible tool to support regional developers What are potential risks related to the cluster approach?
in different regards, like transformation and resilience.
There are two major risks. Firstly, there is a risk that clusters are
Especially those cluster approaches will provide tangible impact that understood as silver bullet to solve all issues and challenges a region
are well aligned with other long-term efforts on regional level to might face. There is a also a tendency that clusters are misused for
assure competitiveness. Thus, we will see a closer cooperation of policy wishful thinking. Secondly, in times of increasing public budget
clusters and other regional entities, like regional development cuts there is a mismatch between tasks clusters have to comply with
councils, chambers, etc. and financial means available.
Due to the ongoing industrial transformation, many clusters will shift
from a sole sectoral focus towards a more mission-oriented focus
(e. g. from Automotive Cluster towards Mobility Cluster; from
WindEnergy Cluster towards Sustainable Energy or Clean Tech
Cluster).

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INTERNATIONAL EXPERTS VENTURING A PREDICTION

Clusters 2030 – Expert opinion (6/6)

Alberto Pezzi, Director of Competitive Strategy at the challenges such as climate change, ageing societies or disruptions
Directorate General for Industry – ACCIÓ, member of (like the Covid-19 pandemic). A concrete opportunity is linked to
Commission Expert Group on Clusters and Member of TCI SDGs and the capacity of clusters to act as a key driver to embed
Board of Advisors & Emma Vendrell, Head of International these in companies‘ strategies and activities.
Projects at the Clusters Unit of ACCIÓ, Spain
What are potential risks related to the cluster approach?

How will the role of clusters change by 2030? The main risk for cluster organisations lies in becoming rigid entities
more focused on their own survival (and thus more dependent on
Clusters, as a natural phenomenon of industrial economies, will structural funds leading to them dedicated to grant-hunting,
continue to last during the coming years and most probably, lobbying...) and not being able to remain flexible and adaptive to a
productive economic activity will continue to be structured in clusters changing business environment.
also in 2030. Regarding the role of cluster organisations, to maintain
their relevance they would probably need to evolve towards more They risk becoming irrelevant if they are not able to offer a unique
flexible and open organisations in order to maintain its alignment to value proposition that tells them apart from other sorts of
the evolution of a given industry of reference. Moreover, since the organisations and that provides added value to their members.
convergence of sectors will accelerate in the coming years, cluster Clusters have been successful for being fantastic tools for
organisations should probably be ready to change and to evolve understanding business dynamics in a different, more strategic way.
accordingly – sometimes through mergers or sometimes being born
At the moment they become (and partially this risk is already a reality
in a new niche and emerging activities.
in some cases) the object of the policy, they will become an obstacle
to competitiveness and not a way to promoting it. Clusters should
What are new opportunities for clusters in the future? continue to be active subjects and not the object of the policy.
New opportunities will be linked especially to the capacity of clusters These opinions are expressed under a personal point of view and do
to offer a holistic approach towards new business trends as well as not necessarily reflect the position of the Government of Catalonia –
being able to offer a more coordinated response to complex Generalitat de Catalunya.

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FURTHER READINGS
▪ Clusters of Change. n.d. Retrieved from [Link]
[accessed September 2020].
▪ European Commission. 2019. European Strategic Cluster
Partnerships. Retrieved from [Link]
eu-cluster-partnerships/escp-4i/, [accessed September 2020].
▪ European Commission. 2020. European Strategic Cluster
Partnerships. Retrieved from
[Link]
[accessed September 2020].
▪ European Commission. 2020. TheCAP Cluster Manual. Retrieved from
[Link]
[accessed September 2020].
▪ European Commission. n.d. COSME. Europe’s programme for small
and medium-sized enterprises. Retrieved from
[Link]
[accessed September 2020].
▪ Kleinpeter, J. 2013. Virtual Cluster Initiatives. Retrieved Slideshare
from [Link]
cluster-initiative, [accessed September 2020].
▪ United Nations Industrial Development Organisation (UNIDO), World
Bank Group & Gesellschaft für Internationale Zusammenarbeit (GIZ).
2017. An International Framework for Eco-Industrial Parks.

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 LISTINGS

OVERVIEW OF
LISTINGS

▪ All good practices and examples at a glance

▪ Glossary
▪ Further readings
▪ Acknowledgement

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 LISTINGS / All at a glance

EXAMPLE
All good practices and examples at a glance

PART 1 PART 2

EVOLUTION AND INITIATION ESTABLISHMENT OPERATIONALISATION TRANSFORMATION

RELEVANCE PHASE PHASE PHASE PHASE
▪ Fishery Cluster Uganda ▪ Use cases of ▪ Ensuring sustainable ▪ Managing ▪ Methodologies
▪ Automotive Cluster Serbia cluster analysis financing Cluster Projects of future-oriented
▪ From demands ▪ Cluster governance ▪ Attracting new cluster activities
▪ Georgian Apparel and
Fashion Association (GAFA) to key objectives structures Cluster Actors ▪ From sectoral
of a cluster ▪ Good practice example ▪ Cluster baseline to cross-sectoral
▪ Cluster Strategies for staffing – experiences observation – a new cluster approach
THE ROLE OF
▪ Lessons learned from Albania analytical approach ▪ Strengthening
CLUSTER POLICY strategic cluster
▪ The Silicon Saxony Case: ▪ Realigning the
▪ Good practice example for Willingness of cluster Cluster Strategy partnerships​
long-term engagement – actors to pay for certain ▪ Clusters as agents
▪ Further development
experiences from Germany cluster services to manage crises and
and adjustment
▪ Good practice example of ▪ Good practice example of service portfolio rapid transformation
developing cluster support for developing cluster ▪ Internationalisation
schemes – experiences services – experiences (EU4SportsClusters)
from Romania, Tunisia and from Morocco
Georgia ▪ Internationalisation
▪ Developing a cluster brand (Georgia)
▪ WICA-Wood Industry
Cluster of Albania

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 LISTINGS / Glossary * Izsak et al. 2016. / ** Meier zu Koecker et al. 2017.

GLOSSARY
Cluster-related terminology (1/2)
Cluster* Clusters are defined as groups of firms, related economic actors, and institutions that are located near
each other and have reached a sufficient scale to develop specialized expertise, resources, suppliers
and skills. Clusters typically represent a dedicated sector. Clusters can develop from embryonic
through to advanced and specialized maturity levels.

Cluster Initiative** A cluster initiative is an organised effort aimed at fostering the development of the cluster either by
strengthening the potential of cluster actors or shaping relationships between them. They often have a
character like a regional network. Cluster initiatives can be managed by cluster organisations or act as
a rather loose group of interacting actors without managing entity.

Cluster Organisation** Cluster organisations are entities that support the strengthening of collaboration and networking in
cluster initiatives and act as service providers by offering or channelling specialised and customised
business support services. Cluster organisations are operationalised by a cluster management.

Cluster Actor** Cluster actors are on one hand the actors who are located in a given cluster. On other hand, if clusters
are understood as an organisation, cluster actors are those entities actively involved in measures
undertaken by the cluster management and related actors. In case a cluster (initiative) has a legal
form, cluster actors can be considered as members.

Cluster Policy* Cluster policy is an expression of political commitment, composed of a set of specific government
policy interventions that aim to strengthen existing clusters and/or facilitate the emergence of new
ones. It should be understood as a framework policy that facilitates bottom-up dynamics. This is
different from the approach taken by traditional industrial policies, which try to create ‘winners’. Cluster
policies try to put in place a favourable business ecosystem for innovation and entrepreneurship and
thus support the development of new value chains.

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 LISTINGS / Glossary * Scheer & von Zallinger. 2007. / ** Pil & Holweg. 2006.; Daaboul et al. 2012. / *** Asheim & Gertler 2005.; Granstrand & Holgersson. 2019.

GLOSSARY
Cluster-related terminology (2/2)
Strategic Alliance* A strategic alliance is a joint activity by at least two businesses with the aim of changing their own
situation through the creation of synergies. Under the overarching theme “We‘re stronger together“
each of the actors involved contributes special abilities in order to profit from cooperation with other
businesses. Such alliances are often seen in clusters, but not necessarily only there.

Value Chain / Value Network / In the simplest form of a value chain, raw materials are formed into components that are assembled
Value System** into final products, distributed, sold and serviced. As products and services became dematerialized
and as the value chain itself has not necessarily a physical dimension, value creation happens in a
system in which different economic actors (suppliers, partners, customers etc.) are working together to
co-produce value (Value Network).

Regional Innovation A Regional innovation ecosystem is the evolving set of actors, activities, and artifacts (products,
Ecosystem*** services, technologies, etc.), as well as institutions and the relationships amongst the players,
including collaborative (complementary) and competitive (substitute) relations. These relations are
important for the innovative performance of a whole region. A regional innovation ecosystem is driven
by the importance of spatial factors like location and physical proximity in R&D, innovation and
diffusion. Emphasis is on a region as a meso-level unit of analysis, i.e. subnational, however with no
explicit definition of what constitutes a region.

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 LISTINGS / Glossary / Further readings

GLOSSARY
FURTHER READINGS
▪ Asheim, B. & Gertler, M. 2005.
The Geography of Innovation: Regional Innovation Systems.
▪ Daaboul, J., Castagna, P. & Bernard, A. 2012.
From Value Chains to Value Networks: Modeling and Simulation
9th International Conference on Modeling, Optimization & SIMulation, Bordeaux.
▪ Granstrand, O. & Holgersson, M. 2019.
Innovation ecosystems: A conceptual review and a new definition.
▪ Izsak, K., Ketels, C., Meier zu Koecker, G. & Laemmer-Gamp, T. 2016,
Smart Guide Cluster Policy, European Commission, doi: 10.2873/48105.
▪ Meier zu Koecker, G., Dermastia, M. & Keller, M. 2017.
Strategic Alpine Space Areas for Cross-regional Cooperation.
▪ Pil, G. & Holweg, M. 2006.
Evolving from Value Chain to Value Grid. In:
MIT Sloan Management Review, Vol. 47, No. 4.
▪ Scheer, G. & von Zallinger, L. 2007.
Cluster Management Handbook, GIZ.

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Acknowledgement
The Guide was developed by the Sector Project The team of authors also wishes to acknowledge the
Sustainable Economic Development, commissioned by the technical support of Ifor Ffowcs-Williams and Bernhard
German Federal Ministry for Economic Cooperation and Grieb.
Development (BMZ) and implemented by GIZ. Furthermore thanks to all international cluster experts for
The authors are Benedikt Sedlmayr, Dr. Gerd their contribution on outlook! In addition, the
Meier zu Köcker and Konstantin Schneider from VDI/VDE document builds upon the GIZ Cluster Management
Innovation + Technik GmbH. The document has Guide published in 2007.
been drafted over the period from June to October 2020.​
The content greatly benefited from discussions and
consultations with Dana Krieger and Hannes Finkenbrink
as well as GIZ project staff working in cluster development
projects. ​Special thanks go to Eranda Begaj, Tomislav
Knezevic, Mohamed Mazen, Marzban Cooper, Elisaveta
Kostova, Brigitte Spaeth, Philipp Steinheim, Elene
Tskhakaia as well as the support from headquarters staff
Mareike Boll, Felix Kullmann, Christina Schmittmann and
Lars Radscheidt for their valuable comments and
contributions.

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 Imprint

PUBLISHED BY:
PROJECT DESCRIPTION:
Deutsche Gesellschaft für Sector Project Sustainable Economic Development
Internationale Zusammenarbeit (GIZ) GmbH AUTHORS:
Benedikt Sedlmayr (VDI/VDE/IT), Gerd Meier zu Köcker
Registered offices (VDI/VDE/IT), Konstantin Schneider (VDI/VDE/IT)
Bonn and Eschborn
DESIGN/LAYOUT:
Friedrich-Ebert-Allee 36 + 40 Atelier Löwentor GmbH, Darmstadt, Germany
53113 Bonn, Germany URL LINKS:
T +49 228 44 60 - 0 Responsibility for the content of external websites linked
F +49 228 44 60 - 17 66 in this publication always lies with their respective publishers.
GIZ expressly dissociates itself from such content.
Dag-Hammarskjöld-Weg 1 - 5 The analyses, findings and recommendations in this study
65760 Eschborn, Germany reflect the authors’ views and do not necessarily represent the
T +49 61 96 79 - 0 position of GIZ.
F +49 61 96 79 - 11 15
This Guide was commissioned and funded by GIZ, on behalf
E [Link]@[Link] of the German Federal Ministry for Economic cooperation and
I [Link] development.

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