Team work key to cluster development

Speakers at Pan-African Competitiveness Forum (PACF) meeting have said that team work is the key for business growth through cluster development and urged members of clusters to stop operating on individual basis to enable them to compete at the international level.

They argued that there is the need for cluster members to meet international standards and that the way forward is for them to come together and share ideas because cluster development is a collective effort.

The PACF has been launched as a new continent-wide competence and action center on innovation and cluster-based competitiveness initiatives in Africa.

The objective is to also assist productive sectors of the economy with activities that would add value to their produce as well as helping them to adopt strategies to enhance competitiveness across Africa.

In Ghana, the Forum is facilitated by the Science and Technology Policy Research Institute (STEPRI) of the Council and Scientific Industrial Research to expose small-scale business, enterprises and businesses to international businesses and innovations.

Dr George Essegbey, Director of STEPRI, said the Forum was to champion competitiveness with value chain additions to the primary products of business by using the clusters.

He said the Chapter would promote competitiveness by rebuilding identified Small and Medium Enterprises (SMEs) businesses, promoting their growth and improving the livelihoods of the people engaged in the sector.

PACF is a new continent-wide competence and action centre for innovation and cluster-based approaches to national and regional development, he said.

The concept of clustering business is not entirely new, he said, and cited some clusters in the country, which include the Krobo area in the Eastern Region where cluster of bead makers support the beads wearing tradition of the Ga Adangmes, which has promoted beads wearing as a Ghanaian and African fashion.

Dr Essegbey said the problems of access to finance, technology, innovation, creativity and networking would be addressed to ensure successful businesses.

He commended the Ministry of Trade and Industry and the World Bank for their continued support of STEPRI activities in cluster development

Mr Ben Johnson, a Financial Management Consultant at the Trade Ministry, said sustaining cluster performance in the long term, needed funding on a sustainable basis.

This, he said, called for management, network openness to business outside the cluster while facilitating strong inter-organizational relationships within the cluster.

" There are no quick fixes for sourcing funds – the regular work, reputation, and sincerity of an organization is the best basis for success,” he said. “The building of relationships with individual supporters is essential, though success may be slow at first it will improve as network grows.”

Accordingly to him, some local sources of funding are organizations and associations such as the Rotary club; the Central Government and district institutions. MOTI (MSME Project, PSDS II, business and corporate opportunities (e.g. banks and other financial institutions) are additional sources.

Funding could also be sourced from international sources such as Voluntary funding agencies such as Missions, Trusts and Foundations; International aid agencies (UN, EC, World Bank, African or Asian), he noted.

He said that such entities can take up activities like sourcing of raw materials, mutual credit guarantee for sourcing loans, common brand creation, marketing, setting of Common Facility Service Centres, Quality Testing Facilities, among others.

Mr Johnson said such organizations fund the mobilization of firms to jointly create sector strategies that address bottlenecks in the flow of goods, services and information from farm to the export gate.

Joint business plans for cluster of firms, which meet eligibility criteria would be supported to carry out initiatives identified in the sector strategy.

“A clear cluster strategy is needed to communicate who you are, what you do, and why and consider what makes your cluster unique,” he said.

Mr Kofi Agyen Boateng, Senior Operations officer, Financial and Private Sector Development, World Bank, said while manufacturing on average contributes 32 per cent to Gross Domestic Product among low and middle income in East Asian economies, in sub Saharan Africa, manufacturing takes up only 14 percent.

“Therefore how we facilitate and further develop the dynamic, indigenous manufacturing sector especially the Micro, Small and Medium Enterprises, which are operating below capacity or below the radar is very important,” Mr Boateng said. “The MSMEs are diamonds in the rough.”

“We are therefore keen on working with forward looking Ministries, Department and Agencies to proactive government to formulate policies and provide assistance that would improve the provide assistance that improve the productivity and competiveness of MSMEs.

The SME’s Coordinator at the Ministry of Trade and Industry, Mr Francis Kusi said because clusters were not working as a team they were not reaping the full benefits available and urged members to cooperate to enable them compete with international standards.