1.Clusters Projects in LAC 2.The role of institutions supporting cluster development 3.Knowledge products 4.Challenges Ahead Presentation Structure

1.Clusters Projects in LAC 2.The role of institutions supporting cluster development 3.Knowledge products 4.Challenges Ahead Presentation Structure

Norte Grande Competitiveness Program Argentina: Agro-based cluster support program (part of a larger Agricultural Development Program) Argentina SMEs Credit Access and Competitiveness Program San Juan Cluster Program I & II Argentina: Technological Innovation Program II & III Paraguay: Cluster Export Support Program Uruguay Clusters Competitiveness and Value Chains Strengthening of the Entrepreneurial Activity Program Estado de Bahía Local Cluster Competitiveness State of Pernambuco Cluster Competitiveness Support Program for Minas Gerais Competitiveness of Business in Local Production Systems in São Paulo Barbados Competitiveness Program Guatemala: Program to Support Strategic Investments and Productive Transformation Dominican Republic: Program to Support Competitiveness Policy II IDB-financed cluster programs in LAC Río Negro Clusters Competitiveness Program Mendoza Cluster Program Compete Caribbean

Cluster Programs at IDB - 5 -

1.Objectives: To solve the restrictions that affect the competitiveness of firms which are part of clusters and value chains, related mainly to lack of public or “club” goods. 2. Activities: -Mapping – Selection of clusters -Raising awareness and Strategic Planning -Implementation of an Action Plan derived from the Strategy -Monitoring and Evaluation Clusters Projects in LAC Typical project structure

Activities: Map/Selection  Based on a loose definition of cluster, adapted to the local conditions and particular policy goals  The current projects followed different strategies:  Support the majority or all of the tradeable sectors in a given territory  Establish criteria and competitive tendering between potentials clusters  Request an international consulting firm to propose a list of the clusters with the highest growth potential (or export, employment, etc)  Based on some agreed criteria, clusters are selected during the program preparation phase Clusters Projects in LAC

Strategic Planning  Raising awareness and mobilization of businessmen in the cluster  Joint diagnosis of the competitive position of the cluster  Benchmarking  Cluster Strategy Plan: Vision, mission, objectives, results, indicators, activities schedule, etc.  Action Plan: Specific actions to achieve the agreed goals for the whole cluster Clusters Projects in LAC

Activities: Action Plan  Training and capacity building to promote inter-firm cooperation  Horizontal Projects: Financing of public or club inputs and promotion of collective actions for the cluster as a whole  Other activities for groups of firms in the cluster, consistent with the strategy: managerial and strategic advise, technical assistance, R&D, export promotion, marketing, logistics, etc. Clusters Projects in LAC

1.Clusters Projects in LAC 2.The role of institutions supporting cluster development 3.Knowledge products 4.Challenges Ahead Presentation Structure

Institutional Support to Clusters Key players in each instance  Executing Agency. Generally it is an executing agency in a Ministry or Development Agency (e.g. CORFO)  Strategic Committee. Includes representatives of the private and public sector to monitor the strategic direction of the program.  Cluster Governance. It serves several purposes: As a representative of the cluster vis-à-vis the program As the body the cluster’s stakeholders use for collective decision-making

Institutional Support to Clusters Cluster Governance  It is the most complex part in the institutional setting of these programs  The most successful cases are those where a promotion program finds an existing cluster leadership (an active business chamber, for example)  In “horizontal” clusters (many firms in the same sector), the governance is based in the local business chamber of this sector.  In those with multiple links (as in agroindustrial value chains), a great deal of initial efforts goes into creating a governance structure that represents the whole chain, overcoming pre-existing conflicts.  There are different examples of public-private interaction in this instance, some are integrated only by businessmen, others involve other local institutions: development agencies, universities, technical institutes or local governments

1.Clusters Projects in LAC 2.The role of institutions supporting cluster development 3.Knowledge Products 4.Challenges Ahead Presentation Structure

Knowledge Products I. Publications IDB prepared a set of studies on these issues that are in different stages of preparation for publication in :  Case studies of Cluster programs in the Southern Cone  Regional Innovation Systems in LAC (with OECD)  Five case studies in each of five LAC countries on public-private cooperation for productive development policies  Our coming Flagship publication (Developmen in the Americas) for 2014 will be on productive development policies, and will contain a couple of chapters dealing with clusters and value chains  A book planned for 2014 that will put together the research and lessons learned across the IDB on cluster-based programs

Knowledge Products II. Training  Course on Local Economic Development (LED), organized by MIF and oriented to ejecuting agencies of small programs  Course on skills for public-private interaction in subnational levels, focused on cluster managers, regional development agencies’ staff and practitioners of LED  The Washington Competitiveness School  Development of manuals and course materials III. Learning Communities  The IDB promotes its creation and its use to share learning and lessons learned among practitioners. IV. Program Evaluation  The Bank created a cluster evaluation toolkit to improve the design, monitoring and evaluation of cluster programs  It presents a comprehensive vision that includes a more mainstream approach, with econometric models, System Network Analysis and case studies 

1.Clusters Projects in LAC 2.The role of institutions supporting cluster development 3.Knowledge products 4. Challenges Ahead Presentation Structure

Challenges Ahead  To consolidate an incipient institutional structure that is highly demanding in terms of public management skills and the ability to successfully integrate conflicting interest  The monitoring and evaluation system should make sure that these types of microeconomic interventions generate the expected results in the short, medium and long term.  To support flexibility of design and management that allows to adapt tools in the overcrowded PDP “landscape” of LAC, distinguished by a vast heterogeneity  To strengthen and consolidate a learning community which allow us to share the lessons learned among programs in the Region, and thus minimizing mistakes and rapidly disseminating best practices General Challenges of Cluster Programs in LAC

Challenges Ahead  This type of programs are very complex to implement as they involve a great number of actors, and also forces the public sector to deal with lots of different private sector actors  These characteristics, added to a slow maturity process of these programs (6-8 years), create huge challenges for the public sector that is subject to the political cycle  The program designs must minimized execution risk by keeping project structure as simple as possible and involving civil society actors in order to: Facilitate and speed up management of the program Provide a stability and strategic continuity for the program to compensate possible political volatility Challenges for the execution of Cluster Programs in LAC