With over 99% of enterprises in Europe being SMEs and over 92% microenterprises with less than 10 employees, one cannot question the need for clusters and for business networks that can facilitate collaboration frameworks for knowledge transfer, economies of scale and scope. This is even more so in today’s context, one of internationalization and global market competition.
Since Michael Porter advanced his tenet that clusters are the engine for regional economic development, and a good number of initiatives were undertaken over the last 25 years across the world on this basis, time and experience has proven that neither “pull” nor “push” policies on their own can deliver the best results. On one side, the enterprises within a sector must feel the need and be ready to cluster and collaborate, whilst on the other side, the public sector intervention is needed to promote, encourage, facilitate and support the establishment of such clusters. The latter became even more evident as the concept of clusters evolved in the last years, from enterprise-only constituencies, to memberships covering the entire knowledge triangle – enterprises, research and academia organizations.
And whilst such pooling of forces is even more important in small open economies like Malta’s, the small size of our market also affects the business culture in general. It often serves as a deterrent to collaboration for fear of loss of market share. The fear of losing out internal market to the competition many times outweighs the benefits of teaming up for pursuing larger international markets.
However, we have definitely seen improvements in this sense over the last years. After some mid 2000s initiatives in the printing and plastics sector, followed by the great success of the FinanceMalta public-private partnership in internationally promoting our financial services industry, we are now noticing a number of other sectoral clusters emerging. These are for example in ICT – Information and Communication Technologies, ITS – Intelligent Transport Systems, MICE tourism – Meetings, Incentives, Conferences & Events, in Life Sciences, logistics and warehousing, and others.
Once such sectoral clusters show signs of emergence, it is very important that they pursue and integrate themselves into wider support frameworks, like for example the European-level Cluster Policy Group, Cluster Observatory, Cluster Alliance, Cluster Excellence Initiative, and Cluster Partnerships. To improve the professionalisation and quality standards within cluster services, the European Commission has been supporting for some years now various initiatives and projects, often attempting to link-up and interconnect all these across Europe.
Currently for example, the European Commission has an open Call for Proposals under its Clusters Excellence Programme. Since 2009 when the European Clusters Excellence Initiative was launched, a number of projects were already supported –
- to design, test and validate a benchmarking methodological tool to be used by cluster organisations to identify and improve their internal management process and the way they offer services to cluster firms,
- to develop training materials with the ultimate goal to help cluster managers improving their own managerial capability,
- to validate and apply the benchmarking tool and the training materials developed by means of train-the-trainers schemes.
Whilst the direct beneficiaries in the previous projects were officials working in regional or national public organisations managing cluster activities, this current Call is directly addressed to consortia of cluster organisations or business networks. The specific benchmarking and training activities are dedicated to cluster management, being implemented at that level and delivered by competent trainers in the field. The aim is to assist cluster organisations, business networks and their managers to provide high quality services to SMEs in different areas, including internationalisation, better exploiting and diffusing key enabling technologies (e.g. ICT), integrating creativity and innovation into their business, IPRs protection and further addressing resource-efficiency issues.
Eligible consortia under this Call have to be made up of a minimum of three cluster organisations or business networks, from three different EU Members States, all registered members of the European Cluster Collaboration Platform. To encourage newcomers, the European Commission is asking that at least one of the participating partners in the consortia must not have any previous experience on working on cluster management. This is hence an opportunity for Maltese participation.
Moreover, another Call for Proposals is expected to be launched this autumn under the Clusters Internationalisation Programme. With a view to better support SMEs to join the global competition, the aim of this programme is to support and promote pan-European Strategic Cluster Partnerships developing a joint international strategy, beyond Europe, especially in emerging thematic areas.
In this sense, EU funding at a 95% co-financing level will be provided to support preparatory actions for the establishment and shaping of new European Strategic Cluster Partnerships or the further development and running of established ones. New such partnerships could thus get support for the identification of strategic partners across Europe, the development of a legal representation, the preparation of a joint branding and marketing strategy and a roadmap for cooperation, amongst others. Established partnerships on the other hand could get assistance in implementing tailored analysis and fact-finding missions for opening of a joint office abroad, international cluster SMEs matchmaking missions, as well as follow-up actions providing assistance for preparing joint business plans and bankable proposals by such SMEs.
Such projects are also intended to develop synergies with the cluster related projects for new industrial value chains in the Horizon 2020 Framework Programme, the inter-regional activities for cluster cooperation funded under the European Territorial Cooperation (INTERREG) Programme and the European Regional Development Fund supported actions, for example in the context of smart specialisation strategies.
Indeed, with Malta’s draft Operational Programme for the ERDF 2014-2020 also clearly highlighting envisaged investments in SME hubs, creative clusters and business incubators, particularly in support of collaborative, innovation and internationalisation activities, the future looks promising for the sectors that believe in the power of clustering and working together.