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Results from TCI questionnaire: Barriers and solutions for evolving clusters

In January 2004 TCI distributed an electronic questionnaire to all TCI members. The questionnaire sought to identify the barriers which most commonly impede the cluster formation processes - and it also sought to identify examples of clusters successfully overcoming these obstacles.

A project, TCI member Oxford Research (represented by Bjarne Jensen) is currently involved, inspired him to distribute the questionnaire to the TCI network. The project concerns the Danish County of Funen and City of Odense. Regional industry leaders initiated the project, known as www.4Frontregion.dk, three years ago. The project sought to develop long-term support of four clusters considered vitally important to the future of the region, which is otherwise dominated by traditional manufacturing industries. The four clusters are Horticulture, Robotics, ICT and bio-tech. The former is considered an existing cluster whereas the three latter were considered embryonic or emerging clusters.

Three years of study showed that, although still at an early stage of development, the four clusters are really promising. There have already been significant improvements regarding networking competencies, and projects have resulted in new, innovative products which are already being sold. Surprisingly, many synergies were found as the four clusters interact to create new products, such as new robotics for greenhouses and plants for medical use.
While the analysis shows that the clusters are developing, the report also identified some potential problems. The questionnaire therefore sought to identify clusters which had encountered similar challenges and had found a way to overcome them. The challenges were:

• A lack of critical mass. How is it possible to sustain growth in a potential cluster?
• The cluster's focus is primarily local. How can the regional initiative be mered into national and international networks?
• Upgrading of organisations. How can a new organisation be structured to maintain the benefits of vertical coordination and corporation (cooperation?) yet avoid becoming bureaucratic?
• Many different initiatives within the same cluster. How can these initiatives be effectively coordinated, and diverse interests appropriately balanced?

As this list implies, we were not looking to compare the clusters with other similar clusters. Rather were we looking to identify typical challenges in the cluster development processes - regardless of the particular industry of the cluster.

Responses

The responses confirmed that the challenges we identified were indeed common among clusters throughout the world. By far the most frequent response was were along these lines of:

"We encounter exactly the same problems. We are struggling to find solutions. Please help us!"

It is interesting to learn that so many TCI members are facing these same challenges. This proves that TCI members can benefit from working together to help solving these problems. Many cluster practitioners seem, in general, to be under the impression that, in other places, clustering is a straightforward process, following a straight development path towards an ultimate goal, and that during the cluster development process the cluster faces little or no unforeseen problems. Yet this impression is most probably not accurate.

One reason why the cluster development processes often appear more straightforward than it actually is is the abundance of so-called best practice cases available. Indeed, the questionnaire responses include many links to cases illustrating successful cluster development. However, these descriptions are typically written with a focus on vision, strategy and (more rarely) results, and they typically disregard the obstacles encountered even in these cases. We crosschecked a couple of the most promising case descriptions only to find that all had in fact encountered severe obstacles in the process, and these lead to strategy changes. One cluster case that was presented as a success story had, in actually, been terminated due to the organisational problems, such as conflicts of interest!

Only five responses were qualified, linking us with cluster initiatives that had indeed encountered similar obstacles and found solutions. After further enquiries we chose to focus on biotechvalley.nu (Sweden), Optronics Coast (Wales, UK) and AluCluster (Denmark) as examples of best practice.
In reality, neither of the cases had found truly innovative ways of overcoming the obstacles. Rather, as these and other cases showed, cluster initiatives inevitably evolve change, and the original strategies must be changed.

The findings convinced the stakeholders in the Danish initiative that not only are they fundamentally on the right track but also they themselves will need to example and adjust their strategies as appropriate - they can not simply copy the practices of other clusters, even success ones.