Industry New Zealand gives funding boost

INDUSTRY NEW ZEALAND GIVES FUNDING BOOST TO CLUSTERS

Industry New Zealand is on the hunt for New Zealand’s most promising high growth clusters and is offering funding to support the cluster facilitators. Just over half a million dollars will be allocated to the top twenty clusters that make it through the assessment panel, with each cluster able to attract $28,000 to employ a facilitator.

Applications for the first round of cluster development funding close in mid-October, and successful applicants will be advised mid-November.

Workshops for cluster applicants are being held in Christchurch, Dunedin and Auckland in the next couple of weeks. Clusters are companies and related organisations working together to grow their businesses. They can include universities, polytechnics, expert advisers, and customers linked in a value-adding chain.

Three main types of clusters have been identified in New Zealand – regional clusters, commercial and national clusters.

While clusters have been tried in various forms in New Zealand since then, it is increasing global competition that has provided the right time for the cluster concept to work here, says Industry New Zealand cluster specialist Alan Koziarski.

“Companies need to specialise to become world-class which can mean moving to rationalise their product ranges when they are confident others in the cluster can pick up the gaps. Sources of competitive advantage can’t be developed within one firm.

“Clustering allows companies to cover all the bases collaboratively. It’s not easy and it takes time – but when you get a group of decision-makers in a room together, challenging each other, you can make things happen.”

Funding is very contestable and will be allocated to clusters that offer the greatest net benefits to New Zealand, said Mr Koziarski.

“We have also been reasonably prescriptive about the type of person experience has shown are ideal as cluster facilitators. They are a key element in the success of clusters,’ Mr Koziarski said.

Clustering is an important tool in economic development. For some regions, such as Wellington, it is the cornerstone of their economic strategy and at least 35 OECD countries have major cluster development programmes.

An econometric study in the US on 32 key export clusters by Professor Michael Porter and presented at the Knowledge Wave conference last year, found they had outperformed the US economy as a whole over the last 21 years.

“Professor Porter recommended that New Zealand needed to move away from networking to true cluster development and widen the base of meaningful clusters in the economy. He also advised that the government’s role is to facilitate cluster development and upgrading,” Mr Koziarksi said.

Industry New Zealand Southern General Manager Paul Claridge said that benefits for companies that cluster include giving clustered businesses access to more suppliers and customised support services, to experienced and skilled labour pools, and to the intangible, but invaluable transfer of knowledge that occurs when people casually meet and talk business.

“They gain critical mass in key areas and achieve results that would not be possiblele if they worked alone. They can focus on what they know and do best, and, by working together, to open markets, and reduce the costs of servicing those markets,” Mr Claridge said.

Industry New Zealand is assisting in the development of more than 20 clusters throughout New Zealand, from wood processing, niche manufacturing, biotech to ICT, tourism and marine construction. They’ve also commissioned a cluster builders manual, training for cluster facilitators and a cluster conference.

Workshops for cluster applicants are to be held:

Christchurch Monday September 30

Dunedin Tuesday October 1

Auckland Wednesday October 2

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