By Gerardo Patacconi, presented at the 18th TCI Global Conference, Daegu, 2015.

1. Clusters in Cultural & Creative Industry:
a Tool for Development and Partnerships
Gerardo Patacconi
Plenary Session 3: Global Cooperation and Cluster Internationalization

2. Clusters in Cultural & Creative Industry:
a Tool for Development and Partnerships
Gerardo Patacconi
Chief, Clusters and Business Linkages Unit
Business, Investment & Technology Services Branch UNIDO

3. • UNIDO Cluster programme
• What is Cultural & Creative Industry and its impact
on sustainable development
• Do Creative Industries Have a Natural Tendency to
Cluster?
• Developing Clusters in Cultural and Creative
Industries in the South-Mediterranean
• Conclusions

4. 4
Poverty Reduction
through Productive
Activities
Trade Capacity-
Building
Environment
and Energy
UNIDO is the specialized agency of the United Nations that promotes industrial
development for poverty reduction, inclusive globalization and environmental
sustainability.
The mandate of the United Nations Industrial Development Organization (UNIDO) is to
promote and accelerate inclusive and sustainable industrial development (ISID) in
developing countries and economies in transition.
 UNIDO is the only UN organization promoting the creation of wealth and tackling
poverty alleviation through sustainable industrial development
 Focus on three inter-related thematic priorities:

6. Development objectives:
• Improve Competitiveness and profitability
• Increase income, jobs and human/food security
• Promote diversification and fair trade
• Increase Value addition and integration (backward and forward linkages)
• Ensure Consumer protection
• Creating shared values pursuing Social, Economic and Environmental Sustainability
and addressing gender balance, Human Rights, anti-corruption
Inclusive & Sustainable Cluster development
• Inter-firm and local institutions collaboration,
• Collective efficiency and Innovation
• Market Access, Profitability, compliance
• Including SMEs as well as Livelihood-based businesses (pro-poor)
• Integrating cluster policies in Countries legal and institutional framework
• Developing vertical/horizontal linkages including buyers/suppliers integration
• Promoting Cluster-to-Cluster partnerships and Export/Origin Consortia
UNIDO Cluster Development Approach

7.  Developed and applied since mid-1990s in both
emerging economies and LDCs: of industrial clusters in
Asia, Latin America, Africa and Eastern Europe (textile,
food, wood, construction, automotive, creative
industries, tourism…)
 Customized to local contexts (country, sector, size/type
of enterprise etc.)
 Fostered Cluster-to-Cluster and Suppliers/Buyers
linkages (Slovenia/Russia, Italy/India-Vietnam, Mena
Region/EU….)
 Standardized approach (tools, network of experts and
training packages/e-learning systems, M&E system…)
 Knowledge Sharing of innovative cluster policy
solutions (North-South and South-South, Triangular
 It focuses on:
• formal industrial sectors (Competitiveness/market
access)
• livelihood-driven conglomeration of micro
enterprises/farms (pro-poor income generating
approach including youth/women empowerment)
UNIDO Cluster Development Approach

8. Focus on building national human &
institutional capacity through cluster
Development Agents, stakeholders
training/coaching, SMEs development and
upgrading, policy advise, market access,
linkages, access to finance….
 Cluster mapping and VC analysis
 Direct Intervention at the cluster level and
value chain (also SMEs upgrading)
 Skill upgrading & development for local
associations, institutions, consultancies &
policy makers
 Facilitation of market access and linkages with
buyers for fair and sustainable sourcing
UNIDO Cluster Development Approach

9. Cultural & Creative Industry & impact on sustainable development

10. Americans for
the Arts
DCMS
UIS
Trade-related
WIPO
Copyright
Concentric
Circles
Symbolic
Texts
Advertising X X X X X X
Film/Video (Recordings) X X X X X X
Music (Recordings) X X X X X X
Publishing X X X X X X
Architecture/Architectural services X X X X X
Television and radio X X X X X
Visual and graphic art X X X X X
Design X X X X
Fashion X X X X
Performing arts X X X X
Video and computer games X X X X
Software X X X
Consumer electronics X X
Heritage & Heritage services X X
Museums, libraries & zoos X X
Musical instruments X X
Art and antiques market X
Arts schools and services X
Audiovisual equipment X
Audiovisual services X
Blank recording material X
Clothing, footwear X
Collecting societies X
Copyright royalties X
Crafts X
Household goods X
Information services X
Internet X
Literature X
Newspapers, periodicals X
Paper X
Photocopiers & photographic equipment X
Sport X
Toys X
Source: Throsby, 2007 Elaboration: By the authorElaboration by Rafael Dulbecco
DEFINITIONS

13. • Creative economy is one of the most rapidly growing sectors at a
global level, as well as highly dynamic in terms of income-generation,
job creation and export earnings.
• World aggregate trade of cultural and creative goods and services
add up to US$ 624 billion in 2011.
• This amount doubled from 2002 to 2011; the average annual growth
rate during that period was 8.8%, while developing countries exports
of cultural and creative goods grew to a greater extent, averaging
12.1% annually over the same period.
Creative Economy: High potential for economic growth and jobs

14. • Employ high-skilled creative workers.
• CCIs also associated to a set of positive externalities entailed by
their capability to enhance the image, prestige and quality of life
of the area in which they are imbedded.
• Additionally, they feature a strong tendency to localize and are
often place-related.
• Due to these specific characteristics of the CCI, policy-makers find
them increasingly attractive as means to solve problems of urban
and Local Economic Development.
Creative Economy: High potential for economic growth and jobs

18. Beauty is a perfect balance between tradition and modernity..

21. Do Creative Industries Have a Natural Tendency to Cluster?
…….. UNIDO Research attempts to analyse the factors
behind the natural agglomeration of Cultural and Creative
Industries…….

22. Specificities of CCI Clustering
Clultural and Creative Industry Clusters:
Geographical agglomerations of interconnected producers that employ
inputs of a cultural and creative nature
to produce goods and services reflecting cultural and creative features
And are associated with support institutions related directly / indirectly
to the CCI.

23. CCI clusters present characteristics that are unique to the sector:
 In general vertically disintegrated networks: highly skilled + relatively
unskilled workers
 part of the skills employed for production originates from a specific
cultural context that is often imbedded in a specific geographical
location; a source of comparative advantage.
 Tend to be composed by a large number of small enterprises making
clustering particularly beneficial for this sector.
 Tend to more social objectives like cultural development and
inclusion.
 limited bargaining power, lack of sufficient resources to encourage
the development and subsequent purchase of specialized support
services, little influence regarding the implementation of policies and
support institutions.
Specificities of CCI Clustering

25. • European Neighbourhood and Partnership Instrument (ENPI) framework
• 7 beneficiaries: Algeria, Egypt, Jordan, Lebanon, Morocco, Palestine and Tunisia
• EU-funded regional project (3,5 years, EUR5,000,000)
• Financial contribution of the Italian Development Cooperation (EUR600,000)
• Label of the Union for the Mediterranean (UfM)
The project applies the UNIDO cluster methodology and the UNIDO creative industry
development strategy for SMEs in CCI value chains to:
• Make Micro and SMEs more competitive and sustainable
• Improve processes and products
• Access national/regional/international markets
• Develop partnerships with suppliers, buyers and other potential partners and foster
cluster-to-cluster linkages
• To work on pliot clusters to demostrate effectiveness of the Cluster Approach and
propose roll-up

26. STEP 1: CLUSTER MAPPING

27. Mapping parameters
• Mapping period: May-October 2014
• Scope: 7 countries of the Southern Mediterranean (Algeria, Egypt,
Jordan, Lebanon, Morocco, Palestine and Tunisia)
• Team: UNIDO HQ project team, UNIDO international mapping experts
and national mapping experts and support by UNIDO filed offices
• Qualitative sources: over 500 persons interviewed with active
participation of support institutions, sectorial/professional
associations, NGOs, companies, EU delegations…
• Quantitative sources: desk research and data mining
• Focus: clusters and NOT individual businesses

28. • Critical Mass
• Geographic
concentration
• Same business segment
• Value chain coverage
• Oriented not only local
demand
Inputs/Activities Cluster Criteria Outputs
Clusters
(potential cluster
initiatives)
Other economic realities
or concentrations of
companies
• Ministries of Industry,
Crafts and Culture
• Industrial Statistics
• Secondary sources (pre-
existing studies, industry
plans,..)
• Public Databases
• Interviews with companies
• Interview with experts
• Information from Support
organizations
• 500 interviews/contacts
Mapping methodology

29. Overview of identified clusters
 144 clusters in 7 countries
 Algeria (17), Egypt (47), Jordan (11), Lebanon (14),
Morocco (21), Palestine (9), and Tunisia (25)
 Plus a list of important economic realities that are
not „clusterized“
 Most Clusters are in the design-based industries, i.e.
furniture, leather accessories, jewelry,, carpets,
home-ware and crafts
 Other CCI sectors that do not qualifying as clusters (
e.g. Advertising in Algiers, Architecture in Amman,
Publishing in Cairo, Cinema in Morocco, Festivals in
Tunisia, etc.)
 The rest of the businesses are often rich in almost
all countries, yet the companies are not
geographically concentrated, but spread around the
territory.

30. Textile / Garments / Shoes /
Jewelry
Furniture / Lighting
Home textiles / Carpets
Stone and marble / building
materials
Architecture
Decoration / Art de table
Audiovisual
Film
Publishing
Advertising
Performing Arts
Music
General view of clusters identified
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lopment.j1e2jmdl/page.html?access_toke
n=pk.eyJ1IjoiY2x1c3RlcmRldmVsb3BtZW50
IiwiYSI6IklDbmQyRFkifQ.gCZpvW9wNTBRZi
gwJwzrYw#13/30.0718/31.2173

31. • Strong potential to increase private sector competitiveness
• Both well-known and less-known economic realities
• Almost all clusters convey very strong elements of heritage that can
evolve into one of the clusters’ main economic strengths
• Some important clusters are losing the link to their heritage and skills
• Other CCI sectors are growing and have strong potential (that still
needs to be realized)
• Limited linkages between CCI and other economic sectors
• Clusters often includes both artisans and SMEs
Mapping of clusters and related economic realities

32. STEP 2: CALL FOR PROPOSALS
for CLUSTER DEVELOPMENT

33. As a pilot initiative with scarce financial resources, the project can only
assist a limited number of clusters;
to ensure a fair and transparent selection process, a competitive call
for proposals was launched to invite companies, associations and
institutions to propose a vision/strategy and request technical
assistance:
134 Cluster development proposals received from 7 countries
A wide array of CCI sectors are represented, and often a support
institution (e.g. chamber of commerce, association of artisans, etc.)
played an important role to ensure the participation of the companies
forming a cluster
Competitive call for proposals

34. PROPOSALS ASSESSMENT
CRITERIA
PRE-IDENTIFICATION CLUSTER
CRITERIA
EX POST CRITERIA
• Same business segment
• Critical Mass
• Geographic
concentration
• Value chain coverage
• Oriented not only local
demand
• Critical Mass
• Competitive advantage
• Economic Impact & Value
chain coverage
• Sustainability and social
impact
• Feasibility and potential
degree of success
• Potential for access to
markets
• Prioritize Initiatives not
supported by other
programmes
• Time to market and
market access potential
• Other issues
Evaluation criteria of Cluster Proposals
The technical evaluation was made exclusively based on the proposals.

35. Assessment criteria
Criteria Values Minimum (1) Maximum (5)
1) Critical Mass
1.1 Nº of companies 1-50 companies >500 companies
1.2 Typology of companies Only few companies of 1 typology Presence of more than 4 typologies
1.3 Nº of jobs <25 >2500
1.4 Turnover <1M USD >50M USD
2) Differentiation
trough cultural
heritage &
competitive
advantage
2.1 Competitive Advantage Very limited Unique
2.2 Creative Competitive
Advantage
Local skills / design element, no links to cultural heritage Specific local skills, design element, and high links to cultural heritage
3) Economic Impact
& Value Chain
coverage
3.1 Support entities
Lack of support entities and
lack of adapted programs
Presence of all kinds of identified support services, support
institutions and programs
3.2 Factor conditions Very poor factor conditions Excellent factor conditions
3.3 Value Chain Coverage Bad coverage and no support institutions
Very good coverage & includes sophisticated support institutions (eg.
Banks) in the list of participants
4) Sustainability,
social impact
4.1 Environmental impact Very limited answer while the sector is not-highly polluting
Excellent description of environmental
actions taken into account
4.2 Local economic development,
employment and social inclusion
Generic comments on job creation or local economic development
Local economic development, job creation and social inclusion are
very well addressed and precisely targeted
5) Initiative feasibility
and potential degree
of success
5.1 Awareness of the initiative
among local actors
<10 local actors >100 local actors
5.2 Cluster objective and strategy Poor, incoherent and/or incomplete strategy
Consolidated strategy, including strategic analysis, and coherent with
cluster strengths and position
5.3 Milestones and expected
results in the next 3 years
No vision of expected results (only generic expected results
described)
Consolidated vision, coherent with current cluster strengths and
positioning and detailed milestones
6) Potential for
access to markets
6.1 Competitiveness, market
expansion, access to markets
Consolidation of competitive advantage, access to markets, and
business expansion are limited
Consolidation of competitive advantage, access to markets, and
business expansion are promising
6.2 Exports 0% 100%

36. 14 „pilot“ clusters have been selected fot direct assistance

37. 19 300 companies:
o 12 358 micro enterprises and workshops (64%)
o 6770 SMEs (35%)
o 181 big industrial or semi industrial companies
(1%)
278 530 people employed,
156 600 informally (56%)
More than 55 support institutions, including:
* High Education Centers
* Cultural Institutions
* Professional associations
* Governmental actors
Exports up to 400 million euros, mainly by the big
companies present in each cluster, which represents
0.3% of the region’s total exports
3.6 Billion euros of annual turnover, which
represents 0.2% of the region’s 2014 GDP
Cultural heritage
Design
Tradition
Savoir-Faire
Women, youth, and informal
workers: towards socially
inclusive clusters
14 clusters…
Egypt, Morocco, Lebanon, Palestine, Algeria, Tunisia, Jordan

38. STEP 3: CLUSTER DEVELOPMENT
AND MARKET ACCESS AND
PARTNERSHIPS

39. Work plan – Cluster initiative
Ramadan
(18 June-17 July)
TECHNICAL ASSISTANCE
FOR THE 2 PILOT
CLUSTERS: FURNITURE
IN NABLUS AND
HANDCRAFTS IN
BETHLEHEM
Feb. 2015 Mar. 2015 Apr. 2015 May 2015 June 2015 Jul. 2015 Aug. 2015 Sep. 2015 Oct. 2015 […] 2017
I - CLUSTER ANALYSIS &
DIAGNOSTIC
Cluster meeting
Interviews – cluster
agents
Cluster
meeting
Action plan
workgroups
Inception
meeting
• Cluster analysis &
diagnostic
• Industry analysis
Action lines
interviews
10/02/2015 14/06/2015
Interviews – Cluster
agents and experts
• Advanced buyers
analysis
• International best
references
• Strategic options
analysis
• Action plan
• Align support institutions
• Governance
II - VISION BUILDING III – ACTION LINES
IV -
IMPLEMENTATION
PRODUCT
DEVELOPMENT AND
ACCESS TO MARKET
I – DIAGNOSTIC II – ACTION PLAN III – FIELDWORK & IMPLEMENTATION
5/10/2015
Cluster meeting
20/04/2015

40. Cluster diamond analysis: Nablus Furniture Cluster
Firm Strategy and
Rivalry
Related and
Supporting
Industries
Factor Conditions
Demand
Conditions
• Domestic market is fairly open to all products from local or
international origins
• Intense competition among local producers
• Industry is boomin/well positioned against imported items
• Informal sector is well present (as a low entry barrier
industry).
• Government places sector among the top priority sectors
• Focus on modern designs in the Israeli market and modern
products with classical infusions to the local market
• Increasing demand on local products especially by the
Palestinians in the 1948 (Israel) for the combination of price
and quality.
• Growing construction projects
• Increasing sophisticated demand for tailor-made and/or
standard products
• Demand is price sensitive with available room for informal
sector competition (limited yet present)
• Suppliers well present in the local market
• Good level of collaboration and integration present among the
different players with the manufacturers
• Geographical proximity is well present in the locality
• Experienced skilled labor is well present yet demand is higher
• TVET centers are outdated (skillful labor is trained on duty)
• Newly established support mechanisms are in place with
focus on R&D
• Government and international organizations support is
shifting focus to core issues rather than mere presence
• Weak information infrastructure lacking
updated and credible information for local
and international markets
• Missing needed regulations for design
protection, business registration, export
incentives, …

41. Porter 5 forces : Nablus Furniture cluster
The Furniture Industry Proves to be Highly Attractive (urban population, income
availability and investment in construction worldwide)
yet very challenging for manufacturers (new entrants from low cost countries).
Differentiation of products and forward integration into the value chain are key to
survival of the business and its development.
Rivalry
among
competitors
Bargaining
power of
buyers
Bargaining
power of
suppliers
Threat of substitute
products or services
Threat of new
entrants

42. Wood & Veneer
Furniture
Workshops/
Factories
Wholesale
Showrooms Domestic
Wholesale
(WB)
Foreign
Retail
Foreign
Wholesale
JD ISR JDISR
Chain Actors
Design
Service
Providers
Machinery
Importers
Owned and/or
External
Showrooms for
retail and/or
wholesale
Cutting
Carving
Veneering
Tinting
Painting
Upholstery
Packaging
Transport&
Logistics
Service
Providers
BSOs
NCCI, PIF, Paltrade
Banks/Financial
Services
Local government
institutions
Chain Supporters
Support Activities
Inbound
Logistics
Operations
Outbound
Logistics
Marketing &
Sales
Services
Local Retail
Showrooms
International Sales
Customers
Fabrics
Accessories
Sponge
Other
Suppliers
Government/MoNE
340 registered
SMEs/WORKSHOPS
(of which 36 are with showrooms)
Over
114 M$ of revenues
More than 1300 workers
(part of the figures come from activities
in manufacturing
and sales through owned channels and
are difficult to separate)
Value Chain: Nablus Furniture cluster

43. • Training & coaching for national Cluster Development Agents (CDAs);
• Awareness Building, stakeholders engagement;
• Cluster development strategy and formation - all stakeholders of the clusters and
key actors of the value chain defining a common vision/strategy towards developing
a joint business plan/collective actions
• Product development– a team of local and international design experts work with
selected companies of each cluster to develop new product lines and production
processes highlighting cultural heritage
• Local capacity strengthening: creative hubs, trends observatories, cluster
development units…
• Policy Review: cluster policies, CCI policies, handicraft & industry policies
• Market access and business linkages with Buyers, market segmentation
• Cluster branding and communication
Technical assistance to selected clusters

44. Action plan for Nablus Furniture Cluster 2015-2017
KNOWLEDGE ON TRENDS
&CONSUMER PREFERENCES
FACILITATION OF ACCESS AND
MOVEMENT CHALLENGES
IMPROVING AND TRAINING OF
PRODUCT DEVELOPMENT
CAPABILITIES
BUSINESS DEVELOPMENT -
ACCESSING LOCAL &
INTERNATIONAL MARKETS
STANDARDIZED QUALITY +
OPTIMIZATION OF PRODUCTION
AND LOGISTICS PROCESSES AND
DEVELOPMENT OF BETTER
SERVICE TO CUSTOMERS
DEVELOPMENT OF A MARKETING
– BRANDING – RETAIL STRATEGY
ACCESS TO FINANCE
PROVIDING NEW QUALIFIED
LABOUR
WORKING & ENVIRONMENTAL
CONDITIONS
# ACTION TITLE
1 Market research about main preferences of end-consumers locally and in the near international markets
2 Creation of design Hub linking together workshops, designers and other main design stakeholders
3 Training new interior designers and promoting collaboration with local workshops
4 Design hub activation. Ideation, prototyping and development of a new product line
5 Study tour + B2B sessions together with companies in a selected furniture cluster
6 Linking with main organizations and donors to collaborate in actions to improve access to market
7 Identification and implementation of needs to facilitate movement of goods and businessmen to the region
8 Market research on potential customers and strategies to enter markets like Jordan & Gulf markets
9 Development of a temporary exhibition in the West Bank inviting main potential international customers
10 Business development mission for market development in Jordan & Gulf markets (incl. follow-up support)
11 Training on communication and marketing to improve own brands and its awareness
12 Training on retailing skills to deliver better service to end-consumers
13 Study tour to learn about retail strategies in other international markets
14 Knowledge of new materials + techniques and audit on processes / products where workshops can excel
15 Assessment on current technical capacities and identification of new machinery needed in the cluster
16 Creation of a database of best local and international suppliers for new materials and components
17 Development of potential joint purchasing groups of raw materials among workshops of the cluster
18 Training on ways to optimize production and logistics processes
19 Training on main aspects of finishing and quality control for all workshops
20 Development of a pilot project to connect local furniture workshops with main representative stores
21 Training on decent labor and implementation of work improvements in small enterprises
22 Environmental assessment and recommendations in production process and waste management
23 Linking with existing donor programs and local banks to ensure better funding conditions
24 Areas of improvement of skilled labor current training system and collaboration with TVET centers
25 Identification of TVET service providers in Nablus and creation of MoUs to implement pilots

45. Action plan for Nablus Furniture Cluster 2015-2017
• The Project covers only ~10% of the identified clusters’ actions
• The cluster is assisted to raise funds for the remaining 90% of actions
• Cluster Governance assured through a transition mechanism with UNIDO
National Cluster Development Agents (CDAs)
STRATEGIC ACTIONS + ENVIRONMENT
REINFORCEMENT ACTIONS
Individually Through groups
Meant to begin implementing the
strategic options by the companies.
Meant to improve the environment of
the companies.
Recommendations
to entities
Through groups

46. Market access
strategies
• Best potential
markets,
distribution
channels and key
buyers,
• Review of trade
barriers;
• Strategic options:
B2B or B2C,
online/retail…
market access
• Zero-cost
advertisement on
specialized
magazine/media
Advisory Board
• Assess and
understand the
requirements and
opportunities to
link with key
buyers in the EU
market
• Convening a group
advisory board
composed of: key
buyers, marketing
experts, digital
experts, designers,
foundations….
Market Segmentation
• Fair trade parallel
market of
distribution and
sales buyers
• High-end and
luxury distributors
and buyers
• Mainstream
middle range
• Local/regional
markets
• Museums and art
galleriese….
Points of leverage
• Ethical and
sustainable
sourcing/CSR
• Highly skilled/local
culture based
handicraft
• Low labour cost for
skilled artians
• Strategic option to
gain buy-in from
artisans in the
cluster
• High visibility
• Clusters: quantity
and sustainability
Market Access

47. STEP 4: INSTITUTIONALIZING
CREATIVITY AND FOSTERING
INNOVATION

48. Creative clusters development
•Linking Creative
Departments in SMEs
with Universities, Design
Schools, Technical
schools
• Buyer
Requirements
• Trends analysis
and feeding of
the creative
process
• Cultural Database
• Product &
design
Creative
Process
Diagnosis
Observatory
of Trends
Creative
Hub
Linkages to
the Market

50. CREATIVE HUB

54. THE TRADE EXHIBITION
Field analysis October 2009

62. Conclusions and Policy Implications for making
CCI Inclusive and Sustainable

63. • Cluster Development is an optimal solutions to develop Cultural and Creative
Industries
• Institutional partners, service providers and support services/centres are
specific to foster creativity and access to markets
• Suitable development programs or methodologies require a sound
understanding of the system (i.e. the cluster and the ecosystem) in which they
are intended to be implemented.
• To reinforce and better adapt policies, and thus increase the probability of a
positive effect on the system’s functioning, the elements and forces acting over
and affecting the system, or in other words the CCI clustering explanatory
factors, must be identified and comprehended.
• The identification of the forces behind clustering processes within the CCI helps
to understand the reasons why the economic activities within the sector are
attracted towards a given spatial location.
Conclusions

64. Policy actions are needed to:
1. promote and support cluster development
2. encourage the local talented individuals (i.e. creative human
capital) to stay, and ultimately succeed to preserve the workforce
pool, promoting the co-location of the creative business.
3. Develop inter-sectoral collaboration
4. Develop the conditions conducive to the establishment of creative
ecosystem and to cluster development
5. Strengthen and promote creativity and skills in education and
technical training
6. Nurture creativity and foster innovation in support institutions
Policy Implications to foster Clusters in CCI

65. www.unido.org/clusters - www.clustersfordevelopment.org - www.cci-clusters.org
Special thanks to Rafael Dulbecco that prepared the master thesis on THE EXPLANATORY FACTORS OF CULTURAL AND
CREATIVE INDUSTRIES CLUSTERING PROCESSES: POLICY IMPLICATIONS during an internship with the UNIDO cluster
Group; Olivier Stoullig, International Coordinator CCI clusters in South Mediterranean at UNIDO and Lluis Ramis and
his Team at the Cluster Developmentnet Company in Barcelona.
THANK YOU
감사합니다
g.patacconi@unido.org

66. ANNEX: Relation clusters and CCI

67. • Based on the leading work of Boix, Capone & Lazzaretti (2009) and Scott & Power
(2009), four main sets of explanatory factors for the CCI clustering have been
identified:
1. Agglomeration economies
2. Human Capital Externalities
3. Cultural heritage
4. The Creative Class
We tested the Model: 4 Variables to be assessed

68. Set of positive economic externalities entailed by the co-localization of productions units and actors within a
geographical space.
• Localization Economies : the co-location or spatial agglomeration of firms belonging to a specific economic
activity
– The specialization of industry results in the specialization of the labor market, which gives companies a
high-skilled creative workers reservoir that helps the former to guarantee a high quality level of
process and products.
– Institutional specialization: the specialization within technical education and technology centers (e.g.
art schools and design hubs) along with other public-private institution (e.g. cultural centers) may foster
the unique and advanced skills needed by companies in order to guarantee a high quality level of
process and products as they enhance the sector’s knowledge base.
• Urbanization Economies: co-location of companies belonging to different economic activities
– New product combination is an essential feature of the creative and cultural economy; thus intra-
sector collaboration linkages are significantly important within the CCI
– The diverse labor demanded by companies enables the existence of a skills-rich reservoir of workers.
Labor force diversity enhances radical innovation as well as entrepreneurship.
– Diversity of institutions and infrastructure that urban areas procure : make available a wide array of
new skills, knowledge and information for the creative industry and labor market
Agglomeration economies

69. • Productive and creative individuals attract other productive and creative
individuals:
– The subsequent dense and high quality human capital stock not only attracts
industry but it also generates it.
• CCI production of goods and services employs inputs of a cultural and creative
nature that are mainly originated by individuals.
• Thus, the spatial concentration of the cultural and creative human capital plays
an important role in CCI clustering since the individuals that form that human
capital also populate the cultural and creative industries.
Human Capital Externalities

70. • Geographical spaces are linked to a set of cultural realities, i.e. traditions, memories, symbols,
values and so on; which can be, to some extent, the sources of inspiration for artists,
designers, crafts workers, and other creative individuals
• These sources of inspiration may be conceptualized as cultural and creative inputs that
ultimately integrate the CCI products
• Reputation of being unique –this reputation is the outcome of the usage of a unique set of
traditional skills, materials and know-how.
– This uniqueness translates into a competitive advantage for the companies imbedded in
that particular geographical space, encouraging them to locate in it, thus encouraging a
clustering process.
• Reputation of successful CCI agglomerations: highly attractive to talented individuals in pursuit
of professional fulfillment, in a process that has been called “artistic gravitation”
• Spaces as they are perceived to be abundant in elements of inspiration, stimulation or
“creative buzz” encompassing diverse and complex prompts, ideas, trends and fashions
Cultural heritage

71. • The creative class theory (Florida, 2002) goes beyond the economic externalities (entailed by
CCI clustering) to understand why the individuals working within this sector (e.g. architects,
designers, artists) choose to concentrate within geographical spaces
• This creative class can be divided in a “super-creative core” and a periphery:
– The former is composed by scientist, engineers, university professors, poets, artist,
entertainers, actors, designers and architects, along with the “thought leaders”,
– Orbiting around the core, in the periphery, there are “creative professionals” who are
individuals working in knowledge intensive industries that are engaged in creative
problem-solving and characterized by a high level of education.
• The creative class is attracted to regions that embrace 3Ts: technology, talent, and tolerance.
This gives rise to creative geographical centers where the creative individuals are able to
preserve their cultural identity and life style, can easily find opportunities and build on their
ideas.
The Creative Class

72. • Case studies were developed to verify that the proposed explanatory factor are
actually observed on the studied clustering processes.
• This attempt of verification was conducted through the analysis of historical,
geographical economic and social information concerning different CCI clustering
processes.
• The cases studied are 3 of the 14 clusters selected by the CCI Clusters in the
Southern Mediterranean project, namely:
– Design cluster in Cairo, Egypt;
– Mosaic art cluster in El Jem, Tunisia;
– Artistic tableware and decoration cluster in Nabeul, Tunisia
• A world class cluster was also selected:
– Bollywood film industry in Mumbai, India
Case Studies

73. Case Study Results
Existence Observation
Agglomeration Economies Yes
Specialized institutions and infrastructure:
art schools, universities, design hubs &
workshops
Human Capital Externalities Yes
Concentration of architects and workers with
previous experience in the wood and textile
manufacturing sectors
Cultural heritage Yes
Traditional aesthetics motifs, Traditional
production techniques
& traditional raw materials
The Creative Class Yes Creative districts (Zamalek and Mohandesin)
Habitat Design Cluster Cairo - Case Study Results

74. Case Study Results
Mosaic in El Jem – Tunisia - Case Study Results
Existence Observation
Agglomeration Economies Yes
Specialization of industry, labor market and
institutions
& Proximity to traditionalinput suppliers
Human CapitalExternalities Yes
Internaltransmission of techniques & know-
how
Concentration of mosaic artists
Culturalheritage Yes
Historicalexistence of a mosaic art cultural
reality
The Creative Class No

75. Case Study Results
Bollywood– India- Case Study Results
Existence Observation
Agglomeration Economies Yes
Specialization and diversity of industry, labor
market & institutions
Intra-sectorialsynergies that arise fromrelated
variety
Intra-sectorialcapitalflows
Human CapitalExternalities Yes
Concentration of filmindustry-related labor
force
Culturalheritage Yes
Inclusion of culturalrealities such as language
(Hindi), traditionalmusic and dance.
The Creative Class Yes Mumbaifirst in the Indian creative index list

76. Creativity as a tool for enterprise creation and development
SOCIAL AND OTHER ENVIRONMENTAL IMPACT
Educational impact, openness to new experiences,
encouragement of creativity, seeing things
differently, curiously, independent thinking,
persistence….
CREATIVITY and INNOVATION
Competitive advantage, strategy weapon,
embedded philosophy, contributing to employer
and employees motivation, problem solving,
performance improvement….