Regional innovation strategies beyond Lisbon targets: improved regional innovation through cluster management

1. Introduction

The European automotive industry is presently undergoing a period of turbulent change marked by increasing global competition and a far-reaching transformation of the supply chain. Facing the increasing cost pressure, the European car manufacturers transfer more and more responsibilities to the supply industry and pass the cost and innovation pressure down to the supply chain. This pressure becomes particularly severe at the lower tier level of component and part suppliers. Enterprise clusters have proved an adequate framework for responding to market pressures and increasingly demanding requirements from the leading companies. By joining forces and learning from other partners from the supply chain, small and medium sized suppliers become more competitive. In facilitating enterprise access to resources such as technology, qualification, information on market requirements and business support services, clusters enable suppliers to master more complex challenges. Considering the proven track record in supporting the supply base, suppliers associations and regional development policies have promoted the development of regional clusters in a number of European regions.

2. Background

Car manufacturer (OEM) and suppliers dominate the economic structure and employment in Stuttgart Region. The automotive industry plays a key role in the economy of the Stuttgart Region, accounting for a sixth of all local jobs - some 180,000 employees. With respect to geographic concentration, density of companies and specialisation, Stuttgart Region is the leading automotive region in Germany. Besides DaimlerChrysler and Porsche approximately 300 suppliers are located in the region, companies of different sizes ranging from SMEs to concerns like Bosch, from small automotive-design offices to Bertrandt AG, a leading engineering company. Different from other automotive regions, many of the suppliers still are independent companies, which are not part of any corporate group. The concentration of companies influenced the establishment of numerous automotive related research institutes as well as research at Stuttgart University.

At the beginning of this century, WRS started support of cluster management activities in order to foster innovation and economic development within the region. Through the competence centres program, especially sub-clusters of the automotive sector (e.g. Mechatronics, Fuel-cells, Logistics) gained stronger networking and advanced access to (public) research and development. Furthermore, WRS established the "Automotive Dialogue Initiative", "SKS-Automotive" and "Mobility Office". Upper Austria has the strongest economy of Austria's nine federal states. With around 16% of the national population, Upper Austria provides 25% of total national exports. Two-thirds go to the Member States of the European Union. Upper Austria is a top European Region in the fields of technology, education and employment. An active labour market policy has facilitated an unemployment rate of currently 3.6%.

The Automotive Cluster (AC) was founded in July 1998 and represents the largest super-ordinated network of leading industrial companies and their direct and indirect suppliers in the road vehicle area, which includes cars, trucks, special vehicles and motorcycles. The AC activities focus on the expansion of the existing strengths of its partner companies and the long-term protection of competitive strength. This is intended to answer major challenges, such as cost pressure, over-capacity, falling prices as well as production and innovation cycles that are constantly growing shorter. The companies in the cluster have a turnover of 16.2 billion Euros (7 billion in the automotive sector) with 81.000 employees.

Pannon Automotive Cluster has been established with the active participation of Hungary's largest automotive enterprises and the support by the West Transdanubian Regional Development Council. Industrial Founding Members are Audi Hungária Motor Kft. - Magyar Suzuki Rt. - Opel Magyarország Jármugyártó Kft. - LuK Savaria Kft. - Rába Holding Rt. Service Provider Founding Members: Citibank Rt. - Ipargazdasági Kutató és Tanácsadó Kft. The Hungarian Ministry of Economic Affairs joined as an active sponsor. PANAC constitutes a network based on civil law, which has been created and operated for shared goals. As far as the operating frameworks, it is not a legal entity but operates as the PANAC Division of the West Transdanubian Regional Development Council.

3. Services and tools for regional cluster management

To maintain Stuttgart Region's leading position in technological areas in the long term it is necessary to identify trends at an early stage and respond flexibly to them. It is therefore one of the key tasks of WRS to ensure that companies located in the area enjoy the conditions required for innovation. By establishing and maintaining regional networks and industry clusters, and by forging links between business, the education system and the research community, WRS focuses on enhancing the region's economic and structural strengths. The main approach of WRS to promote R&D and Innovation activities comprises promotion via dialogue, facilitating access to subsidies, improvement of regional knowledge management, workshops for continuing education as well as financial support for technical innovations. This approach is primarily met by supporting economic clusters and thematic regional networks.

Further examples of services successfully delivered by the cluster management organisations in Upper Austria (Automotive Cluster section of Clusterland Oberösterreich GmbH) and Hungary (Pannon Automotive Cluster - PANAC) will be briefly presented. The network manager turned out to be the most important element of cluster supporting structures. He sets up and cultivates the network, keeping the partners' participation and the transfer of know-how alive. He is also responsible for the most important process: The communication between the partners, which should be moderated by the network manager and supported by appropriate communication platforms. The most important constitutional element is the existence of a legal body for the network (e.g. an association) to ensure the partners' commitment for financing and (net-) working. The most important task is initiating concrete projects to ensure the partner's perception of network advantages. The sustainability of the different concepts is directly determined by the operational management which gives every strategy life.

4. Outlook

Cluster management and regional cluster policies are one of the priorities contributing to Lisbon objectives. Therefore, DG Enterprise and Industry is supporting a number of networks under the Europe INNOVA initiative dealing with the further development of cluster management techniques and services. Valencia (Spain) hosts the first Europe INNOVA Conference "Re-innovating Europe: Challenges for clusters and innovative businesses" on 26-28 November 2006. This conference brings together policy makers, cluster managers and researchers from all over Europe to discuss and exchange recent developments in cluster management. Clusterland Oberösterreich GmbH, PANAC and WRS GmbH are members of the Europe INNOVA cluster network BeLCAR.

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