Cluster Initiatives in
Investment Promotion
Lenka Hrebickova, CzechInvest
Jakarta, 18th November 2010
Table of content
1. • Introduction to CI role in development of companies
2. • General cluster concept
3. • Cluster Programme in the Czech Republic
5. • Clusters in investment promotion
6. • Best practices – Automotive Cluster and others
7. • Lessons learned – obstacles and recommendation
CzechInvest
- Investment and Business Development Agency
- State contributory organisation of the Ministry of Industry
and Trade of the Czech Republic
Historical development:
Support of investment inflow
1993
Facilitating business support
Services and technology centres
2002
Investment Incentives Act
changes
2007
1998 Introduction of investment incentives,
development of infrastructure for investors
2003 Support for small
and medium-sized enterprises
2010
CzechInvest´s Mission
• To support foreign direct investment
- Handling of investment incentives
- Business property and supplier identification
- “Aftercare“ services
• To develop local Czech companies (SME)
and implement the business-development
programs
- Access to EU structural funds
• To improve current business environment
- Clusters and industrial parks development
- Improvement of legislative environment
All services are free of charge!
CzechInvest and its role in
business development
• several aid programmes focused on various areas of business – for cofinancing of business projects
• financed from European Union structural funds – Operational Programme Enterprise and Innovation (OPPI)
• programmes financed by EU structural funds (85%) and by the state budget (15%)
• presently 15 aid programmes
Division of structural funds
What we support
Development
acquisition of machinery and other facilities
Innovation
product innovation,
acquistion of patents
ICT in Companies
modern information
systems
Prosperity
technology parks,
business angels
networks
Eco-energy
energy savings and
use of renewable resources
Training Centres
construction or acquisition
of traning centres,
equipment
Potential
expansion of research centres,
capacity for innovation activites
Real Estate
construction and renovation
of buildings, preparation of
industrial zones
Marketing
promotional materials, support of
foreign trade fairs
participations
Consultancy
consulting, information and training
services
Programme Cooperation
Active assistence in cluster and
technology platforms founding
Consultancy, promotion of clusters and
platforms
Administration of programme
- the cooperation programme is intended for those who want
to cooperate with other companies in their branch and to
establish cluster or technology platform
What do we do
in cluster
development
Cluster promotion – our motto
“The main problem of SME‟s is not their size, but
their isolation.” OECD Seminar - Local Systems of Small Firms and Job Creation Paris
What are the Clusters?
Regionally located set of
mutually connected
companies, associated
institutions and organizations
that compete with each other
but also cooperate, and
whose bonds have the
potential to strengthen and
increase their
competitiveness.
For companies:
Identification of common
needs and its improvement
Cost sharing
Increase innovations
Business climate
improvements
Access to new markets
For universities: For public sphere:
Support of competitive
industry
Region specializations
FDI attraction
Improved competitiveness
Improved communication, common needs identification Realization of mutual projects
Knowledge of industry
needs
Tailor-made education
Applied research
Profit from R&D
Technology transfer
Access to funds
Cluster benefits
Cluster benefits
- Improve the results of
companies in the cluster,
region„s development and
synergic effects
- Increase the number of
innovations, spin-offs and start-
ups, support research base
- Increase exports and lure
attractive investments
Basic Programme conditions
in the Czech Republic
Cluster must have at least 15 independent members
University or R&D institution must be member of the cluster
At least 60% of cluster members must be small or medium enterprise
Feasibility Study on sustainable Cluster development
Building Cluster Initiatives
in the Czech Republic
• Feasibility study to identify industrial groupings in North
Moravia for targeted state aid
• Training regional authorities, universities and firms
• Certification of cluster facilitators and managers
• Promotion of the concept at different levels (conferences, PR)
ANALYSIS & AWARENESS
BUILDING
• International cooperation
• National Cluster Strategy – adopted by the government in June 2005
• National Cluster Study
• Establishment and development of clusters
STRATEGY & IMPLEMENTATION
• Adapting programme to company needs (eligible costs)
• Launching Operational Programme Cooperation – Clusters
• Monitoring and evaluation of the projects
• Launch of the new Operational Programme Cooperation – Clusters
FUNDING
2002
2009
Cluster Support
Programme
Stage 1 – Mapping
• Subsidy for regional authorities, universities, R&D institutions or other organisations entrusted with such project
• 75 % of eligible costs (€6,500 – €33,000)
• Eligible costs: surveys, questionnaires, feasibility study, seminars, workshops, promotion
Stage 2 - Cluster Development Support
• Subsidy for new CLUSTERS (manufacturing, construction, R&D, IT sector)
• max. €1.5 mil
• Eligible costs: joint projects and promotion, R&D facilities, costs of lease and equipment of offices, salaries of cluster managers and staff, consulting services, market analyses, etc.
Stage 3 – Cluster Development Support –
2nd phase
• Subsidy for old and new CLUSTERS
• €120,000 – €3.2 mil
• Eligible costs: Same as Stage 2 + real estate
Summary of the Cluster
Programme
2004 – 2008
Cluster Mapping
•Total applications: 67
•Approved applications: 42
•Total amount of support: €1.3 mil
•Used support: €1.1 mil
Cluster Development
•Total applications: 18
•Approved applications: 14
•Supported clusters: 12
•Total amount of support : €9.9 mil
•Used support: €8 mil
Summary of the Cluster
Programme 2009 - 2013
Program Cooperation 2009 - 2013
•Total applications: 31
•Approved applications: 18
•Total amount of support: 28 mil € (709 mil CZK)
Showcase of Czech Clusters
Machinery Clusters Czech Machinery Cluster, Moravian Aerospace Cluster, Moravian-Silesian Automotive Cluster
Biotechnology Nanomedic, CzechBio, MedChemBio
Wood + Furniture Moravian-Silesian Wood Cluster Cluster of Czech Cabinet Makers
New materials Omnipack, Cluster for Plastic Materials, Czech Stone Cluster, Clutex
Information technologies
Moravian-Silesian IT Cluster, IT Cluster of Hradec Kralove Region
Renewable energy Enwiwa, Envicrack, Energoklastr
Technical textile
Water resources
management
Energetics
Furniture industry
New materials processing
Water treatment
Bioinformatics
Stone industry
IT sector
Packing industry
Biotechnology
Biochemistry
IT sector
Energetics
Machine industry
Wood industry
Ecoenergy
Automotive industry
Construction
Machine industry
Waste processing
Wood industry
Plastics
industry
Machine industry
Nanotechnology
Waste
processing
Map of Czech Clusters
Cluster„s joint projects
Information and communication platforms
• Suppliers databases
• Sharing information
Training
• Different types of activities aiming to increase a number of students in specific fields
• Common training of employees
Research and development
• R&D laboratories
• Testing and research equipment
Marketing and public relation – „low hanging fruit“
• Trade fair and exhibitions, promotion
• Strenghtening image of cluster and its members
WWW
Software
&
Hardware
Studies,
information
databases
R&D
Infrastructure
Rent
Travel
expenses
Operating
costs
Wages and
insurance for
cluster
employees
Experts and
seminars
Marketing and
promotion
Program Eligible Costs
Trade Fairs &
Exhibitions
Clusters and Investment
Promotion
Coordination institution
• cluster represents its members towards potential investors
• cluster serves as a contact for investors in a specific sector
• cluster manager can help member companies search relevant business partner
• more frequent
Final supplier
• cluster as a final supplier based on partial supplies from cluster members
• cluster combines variety of relevant skills, experience, business processes for turnkey delivery (comprehensive delivery – e.g. aerospace)
• based on existing tight cooperation
Combination of both approaches
• variety of approaches
• depends on business enviroment and specific sector
Sectoral aproach in investment
promotion
Key sectors of Czech Republic – CzechInvest has specialists who
can provide investors with sector specific information
Automotive Industry
Aerospace Industry
Electrical Engineering and Electornics
Nanotechnologies
Life Sciences
Renewable Energy Sources and Cleantech
High-Tech Mechanical Engineering
IT and Software Development
Business Support Services
- use of clusters as potential supplier base!
How can CzechInvest help
investors?
Assist with the implementation of the
investment project
Find a suitable location or existing
production facility
Identify potential suppliers throughout or
extensive automotive database
Help connect with the universities and
industrial R&D
Mediation with government bodies
Handle investment incentives
Provide Aftercare services
Automotive Industry
- Czech Republic is one of the most attractive automotive R&D
locations globally
Outstanding engineering tradition
Developed infrastructure, well prepared industrial zones and facilities
High quality technical education
Cooperation between universities and industry
Highly developed supplier base with strong presence of international
companies
Well known automotive cluster can serve as supplier base and is platform
for research and development
Moravian-Silesian Automotive
Cluster Support and development of automotive industry
• 2006
• Legal form: Civic Association
• 43 cluster members
the most significant companies for automotive components in the region (Cromodora Wheels, Siemens, Visteon Autopal)
VŠB – Technical University of Ostrava + other educational institutions
• Financing: subsidy (€ 0.86 million)
self-financing
• Cluster members production: motor vehicles manufacturing, production of components for automotive industry and supporting services
Moravian-Silesian Automotive
Cluster R&D and Innovations – Cluster laboratories
• testing of heat installations and cooling equipment including unit for air handlers for automotive industry testing
• testing of noiseness of components (automotive, washing mashines, TGV)
Moravian-Silesian Automotive
Cluster
Common strategy towards foreign partners from South Korea
•Member of Czech-Korean trade and industry committee
Common marketing projects
•Projects of collecting information from regional and national automotive industry for the purpose of development of suppliers and sub-suppliers networks
Educational projects
Low trust among the cluster members
Unwillingness to cooperate, low awareness of
cluster concept
Low involvement of universities and research
institutions
Passive aproach of cluster manager or cluster
members - missing active persons / institutions
with leadership skills
Limited human resources in small companies
to introduce new activities
Lack of financial resources
Culture of non-cooperation in specific fields
Main obstacles identified
Recommendation Increase the awareness of clusters in general,
better information access, concept promotion
Motivate potential cluster members to cooperate
Strengthen the cooperation among the actual
cluster members
CzechInvest, the Investment and Business Development Agency, is an agency
of the Ministry of Industry & Trade of the Czech Republic
© Copyright, CzechInvest 2006. All rights reserved
Thank you for your attention.
Lenka Hrebickova
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