Clusters in the UK
Clusters are geographic concentrations of inter-connected companies, specialised suppliers, service providers, firms in related industries, and associated institutions.
What are they?
Professor Michael Porter, an acknowledged authority, defines clusters as
“geographic concentrations of inter-connected companies, specialised suppliers, service providers, firms in related industries, and associated institutions (for example universities, standards agencies, and trade associations) in particular fields that compete but also co-operate.”
Thus, a cluster goes wider than the typical supply chain of a company, since it can involve businesses which are normally in direct competition coming together to work on issues of common interest.
Examples of cluster activity in the UK include:
- The collaboration between motor sport companies in the south east, south west and the midlands. These companies have come together to develop and sponsor a motor sport engineering course at Oxford Brookes University. This produces a pool of qualified engineers which benefits all of them, while in no way reducing the direct competition between them.
- The advanced engineering and materials cluster in South Yorkshire, which focuses on high-volume, high-value metal and precision engineering activity. Local, regional and European funding has supported the development of an Advanced Manufacturing Park at Waverley, which has attracted Boeing and other businesses to the area. This is now the largest manufacturing cluster in Yorkshire & the Humber, generating £5 billion GDP per annum.
UK Cluster Strategy
The UK’s cluster strategy is based around international best practice based on five key stages of cluster development:
- Mobilisation - building interest and participation
- Diagnosis - identifying and defining the cluster, and its strengths and weaknesses
- Collaborative Strategy - identifying the actions needed to promote the cluster's development
- Implementation - implementing these actions
- Assessment - monitoring and evaluating the results and reviewing the strategy
In England, the RDAs are pivotal players in facilitating the development of clusters, working closely with local authorities, trade associations and business bodies and providers of education, training and research. In 2001, they worked with the Government to produce the first comprehensive UK clusters map. This highlighted the fact that all areas already have important clusters, in sectors such as the chemicals and aerospace, and that aiding their growth is just as important as supporting clusters in new high-tech areas such as biotech or nanotechnology. The RDAs have carried on this mapping effort and work together where clusters cross regional boundaries (such as motor sport).
The Regional Economic Strategies build the region’s cluster policy from the bottom up, by identifying key sectors in their regions, both those which already display the characteristics of a cluster and those which have unrealised potential to do so. RDAs are able to facilitate networking between cluster members, and their neutral status is particularly helpful when forging initial links between companies that normally consider themselves as rivals. They are also able to establish links with universities and other parts of the knowledge base, which is particularly useful where potential clusters are in sectors which have no history of making these links for themselves. Although the all the RDAs put their own resources into supporting clusters (for example, to support the organisation of networks), they play a more important role in helping to access other sources of help and support, for example in business advice, training and research.
UK Cluster Mark
To recognise excellence in cluster development, a new Cluster Mark was announced in the November 2008 Manufacturing Strategy. The Cluster Mark will be based on internationally recognisable criteria and will provide national and international exposure for cluster activity helping to draw in inward investment.
The Cluster Mark competitions will also act as a high-profile source of best practice; recognising not only current excellence but also direction of travel of developing clusters. The RDAs and DAs will be involved in the identification and selection of clusters from their area. National champions will be selected from this group by a judging panel.
Further information can be found on the Cluster Mark page
Developments in Europe
Cluster development is identified as part of the Lisbon Strategy for Jobs and Growth, and Member States are able (but not obliged) to support cluster activity through the Framework Programme and Structural Funds. Directly-funded EU activity is mainly dedicated to the support of best practice networks between agencies supporting clusters, and the RDAs are involved in several of these. The UK supports a clusters policy that is focussed at national and regional level and we were able to influence the Commissions final conclusions to ensure that Commissions activity will continue to support member states efforts in this area.
In December 2008 the Competitiveness Council accepted the EC publication “Towards World Class Clusters “ and agreed that the EC should continue to support Cluster Development and in particular through sharing research and best practise. In addition, a High Level European Policy Group has been established to look at Member States’ Cluster policies and advise the Commission on how best to support the development of internationally competitive clusters in the future. The group includes two UK members and is due to report in June 2010.
