The role of Clusters in
Innovation and Collaboration
Reunion
Ultra-peripheral Regions
Conference
14 – 17 September 2011
Dep. of Economic Development:
Western Cape Government
Cluster-based Economic
Development
A mainstream strategy in 75+ countries
Positive link between
cluster development &:
 Productivity
 Competitiveness
 Job creation
 SME growth
 Innovation
 Export development
Pole de
Competitivite
Clustering - The pay-offs

Creating trust, linkages between firms/
academia
– Facilitates specialisation
– Builds critical mass

Creating a commercial magnet:
– Attracts customers, new investment, new
skills, specialised infrastructure…

Alignment of public & private
investments
– Key university role

Building an ‘innovation environment’
SOME BACKGROUND TO THE
WESTERN CAPE CLUSTER
PROGRAMME:
The Western Cape

Population 5 million
 Cape Town – 4 million
 GGP – Euro 30 billion
 4 Universities/ Strong research culture
 A diverse economy, backed by a strong
agricultural base, with a deep
manufacturing base, and strong financial
and tourism sector.
 French Huguenot culture still prevalent
History of Cluster Programme
in the Western Cape

DTI’s cluster roadshows in 1996

First cluster launched in 1998

2004 – Recognition & Budget to the Special
Purpose Vehicle - SPV Program

2011 – 17 Initiatives, Euro 8m annual
budget
Western Cape - Industry Cluster Portfolio
Cape IT
Initiative
Prof. Bus.
Services
Autocomponants
Electronics
WC Tooling
Initiative
CCDI
(Craft)
CIMM
(New materials)
WC Furniture
Initiative
Established Clusters
Cape Film
Commission
SA Wine and
Brandy Trust
Emerging Clusters
Environmental
Goods & Services
Financial
Services
SAOGA
(Oil and Gas
supply)
Clusters with potential
CTBi
(Boatbuilding)
WC Aqua
Culture Initiat
Clotex
(CMT’s)
Cape
Ship Repair
Cape Clothing
Cluster
Cape Music
Initiative
WC Fine Food
Initiative
Cape Bio-tech
Trust
Calling the
Cape
CT Fashion
Council
GreenCape
Initiative
Nature of Cape Clusters

Average 5 staff per SPV
 Not-for profit companies
 Public/ private sector funded
 Open membership
 Representative boards (majority industry +
reps from academic & research institutions /
government)
 CEO’s – industry specialists
Achievements:
17 SPV’s
 Euro 8million funding
 50% from government/ 50% outside
 3000 companies participate
 All 4 universities involved

Role of Clusters
10 key functions
Understanding
industry
Collaboration
Institution
Building
The Cluster Initiative
Building
Institutions
Debottlenecking
Problems
Business
Development
Innovation
Support
Productivity
Interventions
Skills &
Training
FDI/Trade
Promotion
The challenges of Innovation
Science driven – may not be what the
market wants
 Path lock-in/ dependency
 Scientists can be poor entrepreneurs
 Protective/ defensive/ untrusting
 Length of time to commercialise
(particularly Bio-tech)
 Funding can be uncertain/ erratic (FFF)

Role of Clusters in supporting
Innovation – A neutral player!






Breaking down the barriers of mistrust
Linking new ideas / sources of innovation
to industry/academia – tech transfer
Facilitating access to R&D grants/
Framework funding
Facilitating IP protection
Assisting in commercialisation of IP and
new start-ups
NB of success stories – Changing mindset
Innovation Systems thinking

Address question of how to improve the
functioning of the system as a whole.
 Look at sectoral innovation systems and
how to improve them
 Innovation systems at the edge/ Open
innovation
 How to get scientists to interact with
industry and visa-versa.
The Cluster IS the innovation system?
Role of Clusters in
Collaboration
Ubiquity of knowledge – tacit knowledge
increasingly important
 Encouraging co-operation between firms
 Building of social capital – bringing firms,
government, academia/ research together.
 Hub for distribution of information/ providing
connections
Eg – Boom room; Listening Lunches; Bio-Buzz
Events, Food-Tec conference
International Collaboration

Increasingly globalised, specialised world
 South Africa like Reunion – somewhat
isolated from major trade routes
 To survive, need to identify competitiven
advantages, specialise and innovate
 Deepen collaboration in key technologies to
achieve critical mass
WC/ Reunion Co-operation

Framed within EU/SA trade agreement
 Co-operation around bio-tech, food and
aquaculture
 Joint research projects between Qualitropic,
CPUT, ARC and PGWC
 Student exchanges
 Attendance at conferences
 Tech-transfer and sharing
Additional areas of potential
co-operation
Renewable energy – looking at appropriate
techs for Africa
 Medical bio-technology – Knowledge
sharing between CYROI and SA’s
Accelerator centre
 Plant bio-technology – medicinal plants

FINALLY SOME LESSONS:
Don’t allow
paralysis by analysis







Businesses, especially SMEs, seek
early pay-offs
Move quickly into action, identify the ‘low hanging
fruit’; prioritise by passion
Then engage in the more substantive issues
Establish a portfolio of projects
Move at the speed of business
Analysis simply provides the platform for action
The clustering process:
But what can go wrong?

Capture by narrow interest groups;
– Entry of new actors blocked
 Removed from private sector culture:
– Unable to attract business leaders
– Chasing white elephants
– Focus on analysis, not action
 Ignoring emerging clusters
 Cluster definition too broad, or too narrow

Confinement within political borders

Inconsistent support from government agencies
To conclude:

In our experience enhancing innovation and
strengthening the innovation system in the
long term can be strongly enhanced by
cluster-type bodies, that act as a neutral
player to bridge the gap between scientists
and industry, and to assist in
internationalising innovation and research.
Thank you!
Nigel Gwynne-Evans
Ngwynne@pgwc.gov.za