In addressing competitiveness, multinational and national agencies, and NGOs, are increasingly taking a cluster based approach, complementing macro initiatives with more micro, cluster based interventions. Today some 40 less developed countries have clustering interventions underway, most with support from aid donors.

But not all of these interventions are generating the expected pay-offs. Difficulties include attracting private sector involvement; locating, training and supporting local facilitators; short term funding and projects addressing long term capacity development  issues; and building tight alignment between donors, government agencies, academia, and the private sector. Sustainability is an issue; well resourced competitiveness projects can quickly fade as expatriate support is withdrawn on project completion.  

The response

The nurturing of clusters is not a panacea, and needs to be undertaken in parallel with other interventions. The macro environment in some countries simply remains unfriendly to a cluster approach.

Where clustering is appropriate, a minimum of a 4-5 year horizon needs to be taken. It takes time to build trust and alignment. Interventions with a 12-24 month horizon may well have a negative impact.

A cluster development team needs to be established, with a private sector culture. This team needs to be trained in the cluster development process, and provided with low-hurdle project support. Membership of this team should be predominantly local nationals.

Cluster Navigators have supported a number of aid agencies with competitiveness programmes, in Africa, the Caribbean, eastern Europe and Asia. Cluster Navigators have worked with UNIDO and OECD, and supported a range of development agencies, including the World Bank (in Kenya, and IFC/SEDF in Bangladesh); Commonwealth Secretariat (in Trinidad); Sida/SAREC, Sweden’s aid programme (in East Africa) and New Zealand Aid (in Cambodia). We have supported EU funded programmes (in the Czech Republic) and US Aid programmes (in Georgia).

Our capabilities centre on designing and introducing a clustering intervention; training and empowering the local facilitators; supporting them at key workshops and in continually upgrading the strategic agenda; garnering whole-of-government alignment to support a cluster; and in reviewing and auditing cluster programmes.