Cluster Set Up

Training Session Sofia, 20 th November 2013

Roundtable

2

What is your level of experience with clusters ?

What do you expect from this training ?

Training objectives

• Give everyone an understanding of what a cluster is and what the benefits are

• Be aware of the different stakeholders to involve and know how to get their buy-in

• Identify major challenges to overcome when setting up a cluster

• Develop a roadmap to initiate clusters

4

Cluster definition and characteristics Focus on cluster supportive

organization (cluster as a legal entity) Stakeholders buy-in Governance & KPI culture and competencies Business service portfolio

and business model Return on experience when setting

up a cluster

Stakeholder’s identification and management on the long term Cluster’s growth and development Cluster’s policies definition

In-Scope Out-of-Scope

Scope

Agenda Wednesday, November 20 th

Module - Description Agenda Time

• Free speech •Why we are here? •What is in and out of scope for this training session ? •What are your experience with clusters management and level of

expectations ?

•Welcome & Introduction

14:15-14:45

•Definition and rationale for setting up a cluster ? •What are the benefits ? • What are the characteristics ? •What are the challenges ? •Medicalps REX

• Setting up a Cluster – An introduction

14:45-15:45

Who

Medicalps

Medicalps (45’ +15’)

•Exercise and group presentation •Working session presentation

15:45-16:15 Medicalps

•“Imagine you are a ……what would be important for you?” (4 different stakeholder’s perspectives and objectives)

Research & academics Industry Institution Social society

• Share and discuss to develop a common vision of what could be the benefits/ risks, contribution (give & take) and proposed mission statement

• “Walk in the shoes of a stakeholder and play the set up of a cluster”

(Round 1)

16:15-17:45

4 Stakeholder teams

•Coffee break

16:00-16:15

• “What did you learn when setting up a cluster that was important from your xyz point of view?”

• Report out & discussion 17:45- 19:00

Stakeholder teams team presenter

Clusters An Introduction : Definition and concept

What is a cluster ? What is an ecosystem ?

Cluster Ecosystem

No shared definition The concept has been introduced

by Moore in 1995

Moore defined business ecosystem as “an economic community supported by a foundation of interacting organizations and individuals – the organisms of the business world

Many definitions of clusters exist driven by purpose and the specific context of its use

Clusters can be defined as a group of firms, related economic actors and institutions that are located near each other and have reached a sufficient scale to develop specialized expertise, services, resources, suppliers and skills

Cluster is an organized group of co-located social actors in an ecosystem shaped by interactions that go beyond geographic frontiers

The concept is a modern description of the long observed phenomenon of geographical concentration of economic activities

What is the origin of the concept ?

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A. Marshall described the advantages of agglomeration of economic activities in terms of availability of a qualified workforce and specialization

Beccatini introduced the concept of industrial districts for regional policy and territorial development, socio-territorial entity which is characterized by the active presence of both a community of people and a population of firms in one naturally and historically bounded area. Porter introduced the concept of industry clusters as a geographic concentration of inter-connected companies and institutions working in a common industry. The concentration of economic activities is viewed as the result of the search of competitive advantages by firms in finding new and better ways to compete and bring innovation faster to the market

1890

1939

1979

1990

Academics

Schumpeter confirms the benefits of agglomeration of economic activities, and stressed the importance of the cluster system in terms of business competitiveness.

Benefits Essential attributes of clusters

Many successful clusters have established a greater competitive advantage and wealth creation for their regions when compared to companies not in a cluster

Why clusters matter ?

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Strategic intent Specialization State funding Geo-concentration Various Actors (start up, SMEs,

large companies, research organizations, innovation intermediaries….)

Interactions fostering information dissemination, knowledge transfer

Sharing of facilities

Local offer of knowledge & relationships development non relocated

Positive effects on the survival of new firms

Higher wages to employees due to specialization

Demand-driven framework and community organization leading to jobs creation in other sectors

Higher tax returns

1

2

3

4

6

Investments in infrastructure 5

There is a link between clustering and regional economic performance

Each cluster tells its own story

Five dimensions to take into considerations

What are the lessons learnt ?

10

Clusters are defined by relationships, not

memberships

Spatial boundaries are variable

2 3

5

Clusters are complex constructs of different dimensions that make them difficult to analyse

Cluster supportive organizations provides a

foundation for cluster

4

A cluster can start in a number of ways but needs a

strategic intent

1

How does it form ?

A cluster can start in a number of ways but needs a strategic intent

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1

A big company choice of location

Repeated interactions between business leaders

A clear distinction has to be made between clusters as real phenomena and cluster initiatives aiming to build new clusters or scaling up existing ones

Academic research clustering effort

Cluster emergence

Cluster policy driven sooner or later resulting in clusters

Clusters spontaneously

created without any

political support

Expression of a focused strategy to

promote innovation, regional

development and other policy goals

(industrial, SME policy…)

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Clusters are not necessarily corresponding with political borders

Geography influences travel conditions,

cultural identity and personal preference Key questions to consider to define the

boundaries • What is the distance and time that people

are willing to travel for employment ? • What are the distance and time owners and

employers considered as reasonable for meeting and networking ?

• What are the level of values, social norms sharing ?

• Internet are also changing the spatial

dimensions of a cluster however face to ace interactions remain important

Illustration with the Alps Bio Cluster

Spatial boundaries are variable 2

Trust is key for any business relationships

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TRUST = CREDIBILITY X INTIMACY

RISKS

Overtime clusters tend to develop social glue (norms, institution, personal network) that holds the different interlinked actors

Clusters are defined by relationships not memberships

3

Cluster’s stakeholders mapping (to be completed given the context)

University

Big companies

Start ups and innovating companies

incubators

Business angels

Venture capital

Patent office

Tech transfer

office

Research institutes

Innovation

intermediaries

Clusters encompass an array of collaborating and competing services and providers so called “innovation intermediaries”

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There is often co-opetition mechanisms between actors

Cluster supportive organizations provides a foundation for the cluster

4

Biz angels networks Venture capital Consultancy

Innovation agencies Incubators Technology transfers Cluster management organization ….

Public funded organizations Private funded organization

They can be defined as the legal entity engineering, steering and managing the clusters incl. the participation and access to the cluster’s premises, facilities and activities

Cluster organizations are service providers that create an infrastructure to support cluster

You cannot replicate a model from one country to another

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Two different approaches are used to identify clusters

Qualitative Through case studies

Quantitative The European Cluster

Observatory has developed an approach based on indirect measurement of the effects of cluster such as the concentration of workers or high productivity

Chronological sequence of selected Biotech clusters

Each cluster tells its own story 5

Illustration – Biotechnology cluster

Clusters undergo different phases through their life cycle

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Set up Start up Scale up Grown up Transfer Growth Maturity

Workplace

Turnover

Focus

Financing

Area Needs

- 5 - 50 50 - 200 > 200

- < € 10 Mio € 10 Mio - €100 Mio > € 100 Mio

Basic research Products or technologies development

State funding

Medium Low Dynamically increasing High

2-3 financing rounds State funding

Exchange of capital cashflow

Capital increase

First production and marketing of own

products

Established products and product range

expansion

Size, specialization and focus can be chosen to assess whether the cluster has reached a "specialized critical mass" likely to spillover and develop positive relationships.

Challenges

How to define a sustainable business model for supportive cluster organizations ?

How to reduce risks (IP, asymetric big actors/ SMEs relationships)?

How to measure economic impact on competitiveness and innovation ?

Main challenges faced by clusters

How to manage a network of various actors and build a sense of community ?

How to address structural, cognitive and cultural challenges in scientific cooperation in clusters of excellence ? (Interdisciplinary knowledge creation)

How to accelerate the clustering process and reduce outcome uncertainty ?

How to influence policy that fosters entrepreneurship and innovation ?

How to develop and what are the right competencies for cluster management?

Accelerate the time to international market for innovative companies

and enhance connections

within the local health ecosystem

Medicalps A practical cluster case study

Behind the screen, how to do it in practice ? Step by step : the cooking tools to create a

cluster « a melting pot of fruitful interactions »

4 pillars • Gathering different types of local actors :

stakeholders • By a driving force : a strong willingness to

implement something new • By sharing the same vision • By achieving common goals

Medicalps A practical cluster case study

Medic@lps is an innovation intermediary, embedded in

its local ecosystem

Federating a network of 66 both public and private actors across the Grenoble Area

Medic@LPS represents the local Bioindustry worth 4.1 billion Euros of revenue and 8500 jobs; and nearly 200 state-owned laboratories and major European research institutes.

Universities and research centres Major companies SMEs and new companies Local authorities

Medic@lps believes in

Innovation

Entrepreneurship

Trust

Exchange and reciprocity

Cooperation and Efficiency

Medic@lps: Our Values

Medic@lps: Our common goals

To support growth and economic development of our companies in

the health sector

To animate the Grenoble/Isère Innovation Health ecosystem for a

greater economic dynamic

To stimulate the international attractiveness of this ecosystem

To facilitate markets access for our companies

To promote better employability of life sciences students

Medic@lps : Cluster' Stakeholders

Universities and Engineering schools

Clinical Centers

Teaching hospital

Scientific research centers (CEA, INSERM, CNRS…)

Major European facilities

(ESRF, ILL)

Health & ICT Industries

A true working alliance for biotech/medtech/e Health convergence and development

Return on experience with the SEHTA inception: South East of

England

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Description

Date of creation: 2005 Scope: health industry in

south east England, especially SMEs Founders: regional

development agency, SEEDA Objectives understand and

meet the needs of the health industry in South East England

Context and objectives at set-up

Context. The regional development agency needed to engage with one of its key sectors responsible for economic growth, the health sector. It attempted to do this by creating an arms-length not for profit company to provide an interface with the industry. The company SEHTA offered free membership of a network and provided intelligence on industry needs back to SEEDA who then responded by providing political and financial support for programmes dedicated to creating sustainable businesses. Objectives : create large eclectic network membership, understand needs

of SMEs, source resources and political support to meet those needs

What went well ?

Creation of network Support programmes Sourcing other funding in support of aims e.g. EU Flexibility in Team structure, agile Team

What could have been improved

Planning for future sustainability More freedom to collaborate with other regional

networks