Transcript PACA
PACA: Underlying concepts and methodologies Jörg Meyer-Stamer www.mesopartner.com PACA is a methodology to evaluate the strong and weak points of a cluster, a city or a region – to start an effort to improve competitiveness of firms and effectiveness of already existing institutions or – to refocus ongoing local economic development activities The measure of success in PACA is the practical action that is initiated through it. PACA is an exercise which seeks answers to three questions: What is the basic economic structure of the locality (city, region)? – in particular if we don’t have thorough, researchbased information on the local economy What are the competitive advantages, assets, potentials and opportunities of the main sectors of the local/regional economy? – go for opportunities, not the biggest problem What can realistically be done to strengthen strengths and to alleviate weaknesses? – realistically refers to available local motivation, skills, capacities and institutions Main concepts competitive advantage is created – inside firms, stimulated by rivalry – through collaboration between firms – through collaboration between firms and supporting institutions Michael Porter’s diamond Clusters and Industrial Districts Systemic competitiveness Market failure Understanding localized competitive advantage: Michael Porter‘s „Diamond“ Context for firm strategy and rivalry Factor (input) conditions * A local context that encourages appropriate forms of investment and sustained upgrading * Vigorous competition among locally based rivals * Factor (input) quantity and cost - natural resources - human resources - capital resources - physical infrastructure - administrative infrastr. - information infrastructure - scientific and technological infrastructure * Factor quality * Factor specialization Related and supporting industries * Presence of capable, locally based suppliers * Presence of competitive related industries Demand conditions * Sophisticated and demanding local customers * Customers’ needs anticipate those elsewhere * Unusual local demand in specialized segments that can be served globally What is Competitive Advantage? Comparative advantage (static advantage) Competitive advantage (dynamic advantage) Available of natural resources Created, high-value natural resources (e.g. FSC-certified plantations) Value-added attractions around a natural attraction (e.g. canyoning) Highly skilled and specialised labour Highly efficient, value-added infrastructure Tourism attractions like waterfalls Cheap labour Availability of real estate What is a cluster? • A geographical agglomeration of firms in the same or closely related sectors Passive cluster advantages: Skilled workers Suppliers of inputs and capital goods Customers Low barriers to entry Active cluster advantages: Strong, competent business associations Collective effort to improve factor conditions, e.g. – specialized, high-quality skills development effort – technology information and upgrading – targeted financial instruments. A highly dynamic cluster: Ceramic tiles, Castellón, Spain AUTONOMOUS GOVERNMENT SUPPORT CERAMIC TECHNOLOGY Villafamés INSTITUTE La Pobla Tornesa Lucena del Cid Alcora Figueroles San Juan de Moro LOCAL GOVERNMENTS SUPPORT Borriol Ribesables VERY ACTIVE BUSINESS ASSOCIATION Castellón de la Plana Villarreal NEW INFRASTRUCTURES INVESTMENT Betxi Onda Almazora CERAMIC PROMOTION INSTITUTE Vall d’Uixó Nules SPECIALIZED COURSES AT HIGH SCHOOLS UNIVERSITY WITH SPECIALIZED COURSES CERAMIC DESIGN INSTITUTE Determinants of systemic competitiveness Meta level development-oriented patterns of political and economic organization value systems capacity to which encourage competitive economic formulate visions learning and change system and strategies social status of entrepreneurs transparent, efficiently implemented rules and regulations stable, competition-oriented economic, political and legal framework conditions Meso level R+D, extension credit + microfinance social cohesion, social capital sound financial basis of local government specialised organisations and collective action improve the competitiveness of industries investment promotion SME promotion collective memory Macro level Micro level intra-firm effort to improve efficiency, quality, flexibility, responsiveness; business strategy infrastructure real estate formal and informal coeducation operation, networks, + training alliances, collective learning Operationalizing Systemic Competitiveness for field research Meta level factors Meta level * entrepreneurial spirit * co-operative spirit * capacity of articulation Macroeconomic conditions Macro level Government Meso level Training Technology Financing Business Assns. etc. Relations with meso-institutions Micro level Relations with Factors inside the firm suppliers + subcontractors Relations with customers Relations with competitors PACA effects: A Systemic Competitiveness perspective Meta Macro Closer interaction between public and private sector More efficient public service, less red tape Meso Supporting institutions Micro Networking between companies, collective action Chambers, business associations Matching Business development services What is and what isn’t market failure? Market failure is the lack of response on the supply- or demand-side due to – natural monopoly – external effects – indivisibilities – asymmetrical information – public goods Market failure isn’t marketing failure the failure of a business to identify an adequate market lack of demand for a company’s products a crisis due to a downturn in a company’s main market. How to address market failure in a PACA? Try to identify market failures Try to prioritize market failures according to their relevance Try to understand the root causes of very relevant market failures Design and scope practical activities in such a way that they address the cause of the market failure, not the symptom, and thus make markets work. Contribution of main concepts Porter’s Diamond: help local stakeholders see their reality from a new angle Clusters: identify opportunities for creating active cluster advantages Systemic Competitiveness: help the external observer not overlook key issues and organize local reality Market failure: avoid market-distorting LED interventions Other structuring tools to be used during PACA exercises Various mapping tools, e.g. – Cluster structure – Local political structure – Value chain structure Life-line Five forces Interaction matrix SWOT analysis ... Rapid Appraisal: The Participatory Learning and Action concept offsetting biases rapid progressive learning - flexible, exploratory, interactive, inventive reversals and triangulation principal investigators' direct contact, face to face, in the field seeking diversity and differences optimal ignorance, and appropriate imprecision Participation and PACA Arnstein, Sherry R. "A Ladder of Citizen Participation," JAIP, Vol. 35, No. 4, July 1969, pp. 216224 PACA aims here PACA is... an opportunity for local actors to have, collectively, a close look at their own reality – check myths – identify opportunities for business linkages – identify opportunities for collective action a communication approach that – accepts the time constraints of local actors – respects the “workshop fatigue” of local actors – emphasises efficient communication. Thank you for your attention!