Consultation on the Benefits of

Clustering to Promote Exports

Presented as a Component of the ‘Export Competency

Development Project’.
Facilitated by
Mr. Fitzroy James
November 10, 2008 at the Conference Room of the
Grenada Bureau of Standards
 Perspective
“The enduring competitive advantages in a
global economy are often heavily local,
arising from concentrations of highly
specialized skills and knowledge, institutions,
rivals, related businesses, and sophisticated
customers.”

- Michael Porter
Harvard Business School
 Presentation Outline
• Background Considerations
• Definition of Clusters
• Generic Clusters
• Identification of opportunities for formation
of clusters in Grenada
 Background Considerations
• Changing context of Agriculture
– Growing demand - Efficient Supply logistics
– Consumers seek authenticity, uniqueness,
“experiences”
– Agricultural production:
• Commodities increasingly unprofitable;
• Emerging niche market opportunities;
• … “…agrifood supply chains are evolving from transaction-
based market to alliance based market networks;
– Growing importance of information, knowledge
 Background Considerations
• Changing context of Agriculture
– concern about sustainability;
– With global sourcing of food, concerns sourcing of
food, concerns about…
• food safety
• transportation costs
– Climate change – growing interest in ‘green’
products
 Background Considerations
• Changing context of Agriculture
– The question: how can local farmers/entrepreneurs
respond to these opportunities?
– Major changes needed …
• New skills development, upgrading
• Responsive entrepreneurship, innovation
• Access to new research, information flows
• Economies of scale essential (individuals cannot do it on
their own)
• From individual to collective, group action
 Background Considerations

• Industry clusters Industry clusters

are essential for profitable exports
in Grenada
 Define Clusters
• “Clusters are geographic concentrations of
interconnected companies and institutions in
a particular field.” M.E. Porter 1998

• Arise as a result of unique local historical or

geographical factors
• Lead to higher productivity, profitability
 Clusters Defined
• consists of firms that consists of firms that…
– are located in relatively close proximity
– compete with each other in similar markets
– cooperate to enhance technical skills and market access
– support, through social networks, growth and development of
individual businesses
– share common inputs, such as labor with specific skills
– recruit support industries based upon the local concentration of
firms
– benefit mutually from new, location-specific specific tacit
knowledge generation and
– work together to respond to new demands, work together to
respond to new demands such as environmental goals
 Clusters Defined
• Co-inform
• Co-learn
• Co-market
• Co-purchase
• Co-produce
• Co-build economic foundations
 Identifying Clusters
• Business Interdependence:
where businesses relate to each other through
the buyer-supplier “food chain,” as competitors,
or as partners.
• Export Oriented:
companies in the cluster sell products or
services to companies outside the region.
• Concentration:
Employment in the cluster is more concentrated
in a region, and the cluster is an existing or
emerging area of specialization.
Generic Cluster Structure
 Cluster Formation
Requirements
• Catalogue key components of the cluster
• Articulate an achievable vision of what the
cluster can become over the next 5 - 10 years
• Identify opportunities for growing the cluster in
the desired direction by expanding existing
companies/members and attracting outside
companies/members
• Identify opportunities for more synergy within
the cluster
• Identify needs for specific economic foundations
and proposed strategies
 Role of Government
• I end with another quote from Porter
• ‘The importance of clusters suggests
new roles for government at [all]
levels … removing obstacles to the
growth and upgrading of existing
and emerging clusters takes on a
priority.’ (M. Porter)
• THANK YOU !!!