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The Clustering Policy – Detailed History

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The Business clusters and the Competitive clusters are complementary tools for the Walloon economic development. They both fit in the same logic of the Government's policy consisting in the willingness to create the conditions needed to build clusters in the Walloon Region.

1999 / 2000 : Early years

In 1990, in his book « The competitive advantage of nations », the American economist Michael Porter highlighted the presence, in different areas of the world, of effective centres of activities at the international scale (clusters), centres relying on four strategic determining criteria strengthening one with each other . What Porter calls the « diamond » is composed of the production factors, the demand-related conditions, the competition and strategies of the companies of the sector, and, also, the related effective sectors of activity.

In the course of the decade, the publications of Michael Porter have ensured a wide dissemination of the concept of cluster both in academic and political quarters. The Porter's theories have quickly resulted, on an international scale, in private and public initiatives to support regional or national clusters (the Basque Country, Scotland, Flanders , etc.).

What about Wallonia ?

The structure of the Walloon productive fabric (burden of the heavy industries, weak entrepreneurship) has not favoured the natural appearance of clusters.

From 1999, the first discussions on the cluster concept were conducted within the Administration (« Direction de la Politique Economique ») in the course of the drawing-up of the regional development strategies for the 2000-2006 period, part-financed by the Structural Funds.

In January 2000, the Walloon Government set the support to the appearance of business clusters among the priority measures of its Contract for the Future for the Walloon Region, proving its willingness to promote cooperation and partnerships between Walloon enterprises, both SMEs and large enterprises.

At the same time, awareness and support actions to clustering were included in the 2000-2006 programmes of the phasing out of Objective 1 (Hainaut), Objective 2 urban (Liège) and Objective 2 rural (Namur and Luxembourg).

A survey as an answer to « Why ? » and « How ? »

In July 2000, following the first feasibility study conducted by the Administration, the MERIT (University of Maastricht) and Ernst & Young France issued a report (PDF - 550kb) financed by the Minister of the Economy and the Economic Policy Division. This report allowed to confirm the interest of the cluster concept for a large panel of Walloon companies (6 sectors representative of the regional economy), to fit the concept to the Walloon situation and, in fine, to find out how the Region could support these Business clusters.

2001/2005 : The experimental stage

Pilot projects

Building on the conclusions of the MERIT / Ernst & Young report, it has been decided to launch an experimental stage for supporting the creation of Business clusters.

A total number of 12 Business clusters have been supported by the Region since 2001, their launching being performed in three stages :
   - in 2001 and 2002, the following clusters : aeronautics, automotive industry, wood and biotechnologies in the agri-food industry ;
   - in 2003, the space, clinical research and ceramic products clusters ;
   - in 2004, the solid wastes, transport & logistics*, nutrition*, ICT* and eco-building clusters*.

* These 4 clusters result from awareness actions to the network approach conducted in the phasing out Objective 1 (Hainaut) and Objective 2 (provinces of Liège, Namur and Luxembourg) areas in the course of the 2000-2003 period, with, as a consequence, the accompaniment of clusters-related projects.

Intermediate assessment

In 2004, on behalf of the « Conseil Economique et Social » of the Walloon Region (CESRW), the MERIT agency conducted an independent assessment of the experimental programme.

Among the four first analysed pilot Business clusters, two were very positive ones (Aeronautics and Automotive) while the other two experiments (Wood and Biotechnologies in the agro-food industry) did not prove positive ones : too limited critical mass, low impacts, no long-term prospect, etc. As a logical result, since the end of 2004, the Walloon Region has decided to remove its support to these two pilot projects.

Fundamentally, the MERIT's report (PDF - 634kb) had a positive assessment on this experimental stage of clustering conducted since 2001 and recommended its reconduction provided improvements were made :
   - adoption of legal bases needed for the good and sustainable operation of the programme ;
   - upkeep of the sliding-scaled public financing;
   - selection of the leading initiatives on the basis of an objective and open process;
   - independent assessment of each cluster after 2 or 3 years of operation.

2005 : Emergence of the Competitive clusters

Within the world economy, we are witnessing the emergence of new market trends, including the internationalization of exchanges and production processes and the advent of a knowledge economy.

This development that exacerbates competition between enterprises considers research and innovation as a new tool for strengthening competitiveness and, hence, growth.

The Competitive clusters policy reflects the will to reassert Wallonia as a worldwide competitive industrial area. It intends to be a forward-looking industrial policy concentrating significant resources in economic areas creating growth and jobs. The influence of these Competitive clusters should pass the boundaries of the Region
   - to aim at a critical mass at the European level and even worldwide ;
   - to turn into a driver for export ;
   - to attract foreign investors who are particularly sensitive to places full of externalities, namely as regards research and training and social matters. It is also a chance to attract the skills and the brains that are particularly sought after in a knowledge and know-how economy.

To boost this policy, the Walloon Region has selected 5 priority and performing areas on the basis of a survey conducted by Prof. Henri Capron (ULB) : life sciences, agri-food industry, mechanical engineering, transport and logistics, aerospace industry.

These areas correspond to a growing business in the world and in which Wallonia can offer performing enterprises and research centres.

2006 / 2007 : Sustainability of the policy of support to Business clusters

The lessons deriving from the experimental stage, added to the independent assessment conducted by the experts of MERIT, have led the Walloon Region to sustain its clustering support policy, while providing the necessary improvements. This willingness can be found in the « Contrat d'avenir pour les Wallonnes et les Wallons » (February 2005) and the Cross Strategic Plan « Création d'activités et d'emploi «  (August 2005).

The clustering policy now has its own legal basis : the decree relating to the support and development of the business clusters voted by the Walloon Parliament on 18 January 2007 (PDF - 996kb), supplemented by the executory decision adopted by the Walloon Government on 16 May 2007 (PDF - 738kb).

This legal basis provides for :
   - an open selection procedure aimed at selecting the leading initiatives;
   - a sliding-scaled public financing (through 3-year periods: 100%, 80% and 50%);
   - triennal assessments of each cluster and the policy itself
   - a specific support to international and inter-cluster co-operation.

Where the Business clusters are funded to develop economic promotion and promote innovative partnerships, whether industrial, commercial or technological, the Competitive clusters are mainly supported for carrying out investment, R&D or training projects, in line with the strategy of competitive positioning they have themselves defined.

Clustering today

The Business Clusters

The Competitive Clusters