Benefits Of Clustering To Promote Exports

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Information about Benefits Of Clustering To Promote Exports
Business & Mgmt

Published on February 23, 2009

Author: mnibgrenada

Source: slideshare.net

Description

This workshop is organized by the MNIB in collaboration with the Ministry of Finance and the Inter-American Council for Integral Development of the Organization of American States (OAS/CIDI). It is the first phase of the ‘Cluster Formation Project’ which is carried out under the ‘Export Competency Development in Support of the Export Strategy of Grenada’.

Consultation on the Benefits of Clustering to Promote Exports Presented as a Component of the ‘Export Competency Development Project’. Facilitated by Mr. Fitzroy James November 10, 2008 at the Conference Room of the Grenada Bureau of Standards

Perspective “ The enduring competitive advantages in a global economy are often heavily local, arising from concentrations of highly specialized skills and knowledge, institutions, rivals, related businesses, and sophisticated customers.” - Michael Porter Harvard Business School

“ The enduring competitive advantages in a global economy are often heavily local, arising from concentrations of highly specialized skills and knowledge, institutions, rivals, related businesses, and sophisticated customers.”

- Michael Porter

Harvard Business School

Presentation Outline Background Considerations Definition of Clusters Generic Clusters Identification of opportunities for formation of clusters in Grenada

Background Considerations

Definition of Clusters

Generic Clusters

Identification of opportunities for formation of clusters in Grenada

Background Considerations Changing context of Agriculture Growing demand - Efficient Supply logistics Consumers seek authenticity, uniqueness, “experiences” Agricultural production: Commodities increasingly unprofitable; Emerging niche market opportunities; … “… agrifood supply chains are evolving from transaction-based market to alliance based market networks; Growing importance of information, knowledge

Changing context of Agriculture

Growing demand - Efficient Supply logistics

Consumers seek authenticity, uniqueness, “experiences”

Agricultural production:

Commodities increasingly unprofitable;

Emerging niche market opportunities;

… “… agrifood supply chains are evolving from transaction-based market to alliance based market networks;

Growing importance of information, knowledge

Background Considerations Changing context of Agriculture concern about sustainability; With global sourcing of food, concerns sourcing of food, concerns about… food safety transportation costs Climate change – growing interest in ‘green’ products

Changing context of Agriculture

concern about sustainability;

With global sourcing of food, concerns sourcing of food, concerns about…

food safety

transportation costs

Climate change – growing interest in ‘green’ products

Background Considerations Changing context of Agriculture The question: how can local farmers/entrepreneurs respond to these opportunities? Major changes needed … New skills development, upgrading Responsive entrepreneurship, innovation Access to new research, information flows Economies of scale essential (individuals cannot do it on their own) From individual to collective, group action

Changing context of Agriculture

The question: how can local farmers/entrepreneurs respond to these opportunities?

Major changes needed …

New skills development, upgrading

Responsive entrepreneurship, innovation

Access to new research, information flows

Economies of scale essential (individuals cannot do it on their own)

From individual to collective, group action

Background Considerations Industry clusters Industry clusters are essential for profitable exports in Grenada

Industry clusters Industry clusters are essential for profitable exports in Grenada

Define Clusters “ Clusters are geographic concentrations of interconnected companies and institutions in a particular field.” M.E. Porter 1998 Arise as a result of unique local historical or geographical factors Lead to higher productivity, profitability

“ Clusters are geographic concentrations of interconnected companies and institutions in a particular field.” M.E. Porter 1998

Arise as a result of unique local historical or geographical factors

Lead to higher productivity, profitability

Clusters Defined consists of firms that consists of firms that… are located in relatively close proximity compete with each other in similar markets cooperate to enhance technical skills and market access support, through social networks, growth and development of individual businesses share common inputs, such as labor with specific skills recruit support industries based upon the local concentration of firms benefit mutually from new, location-specific specific tacit knowledge generation and work together to respond to new demands, work together to respond to new demands such as environmental goals

consists of firms that consists of firms that…

are located in relatively close proximity

compete with each other in similar markets

cooperate to enhance technical skills and market access

support, through social networks, growth and development of individual businesses

share common inputs, such as labor with specific skills

recruit support industries based upon the local concentration of firms

benefit mutually from new, location-specific specific tacit knowledge generation and

work together to respond to new demands, work together to respond to new demands such as environmental goals

Clusters Defined Co-inform Co-learn Co-market Co-purchase Co-produce Co-build economic foundations

Co-inform

Co-learn

Co-market

Co-purchase

Co-produce

Co-build economic foundations

Identifying Clusters Business Interdependence: where businesses relate to each other through the buyer-supplier “food chain,” as competitors, or as partners. Export Oriented: companies in the cluster sell products or services to companies outside the region. Concentration: Employment in the cluster is more concentrated in a region, and the cluster is an existing or emerging area of specialization.

Business Interdependence:

where businesses relate to each other through the buyer-supplier “food chain,” as competitors, or as partners.

Export Oriented:

companies in the cluster sell products or services to companies outside the region.

Concentration:

Employment in the cluster is more concentrated in a region, and the cluster is an existing or emerging area of specialization.

Generic Cluster Structure

Cluster Formation Requirements Catalogue key components of the cluster Articulate an achievable vision of what the cluster can become over the next 5 - 10 years Identify opportunities for growing the cluster in the desired direction by expanding existing companies/members and attracting outside companies/members Identify opportunities for more synergy within the cluster Identify needs for specific economic foundations and proposed strategies

Catalogue key components of the cluster

Articulate an achievable vision of what the cluster can become over the next 5 - 10 years

Identify opportunities for growing the cluster in the desired direction by expanding existing companies/members and attracting outside companies/members

Identify opportunities for more synergy within the cluster

Identify needs for specific economic foundations and proposed strategies

Role of Government I end with another quote from Porter ‘ The importance of clusters suggests new roles for government at [all] levels … removing obstacles to the growth and upgrading of existing and emerging clusters takes on a priority.’ (M. Porter)

I end with another quote from Porter

‘ The importance of clusters suggests new roles for government at [all] levels … removing obstacles to the growth and upgrading of existing and emerging clusters takes on a priority.’ (M. Porter)

THANK YOU !!!

THANK YOU !!!

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