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Policy Research Corporation SOUND SOLUTIONS BASED ON SCIENTIFIC RESEARCH EC DG Mare study The role of Maritime Clusters to enhance the strength and development of maritime sectors Dr. Harry Webers Rome, 1

CONTENTS Main objectives of the study Overview of maritime clusters, trends and policies Assessment of the role of maritime cluster organisations Conclusions and recommendations 2

OBJECTIVES AND APPROACH OF THE STUDY Provision of overview of main economic features of European maritime clusters, trends and policies - Assessment of data from different sources (Employment trends in all sectors related to the sea (Ecotec), Economic impact of maritime industries in Europe (Policy Research), Eurostat, Studies on behalf of the national cluster organisations, et cetera) - Mapping cluster strength in line with methodology European Cluster Observatory - Desk and field research (Denmark, France, Germany, Italy, Norway, UK) Assessment of the role of maritime cluster organisations - Desk research and field research (Denmark, France, Germany, Italy, Norway, UK) - Detailed inquiry amongst regional, national and European maritime cluster organisations Timing of the study: May 3

CONTENTS Main objectives of the study Overview of maritime clusters, trends and policies - Definition of sea-related sectors - Key figures European maritime cluster - Determination of cluster strength - Main trends and policies in the maritime sectors Assessment of the role of maritime cluster organisations Conclusions and recommendations 4

SEA-RELATED SECTORS In line with the EC s Terms of Reference the study distinguishes - Area 1: Traditional maritime sectors* - Area 2: Coastal (and marine) tourism and recreation - Area 3: Fisheries - Area 4: Exploitation of non-living sea resources - Area 5: Other economic activities related to the oceans and seas that contribute to the well being of Europeans * In the study Economic impact of maritime industries in Europe, carried out by Policy Research on behalf of the EC, the fisheries sector was also included as part of the traditional maritime sectors; furthermore, differences exist per country with regard to the scope of the maritime industry; the members of the European Network of Maritime Clusters regard eight sectors as part of the maritime cluster from a narrow perspective: shipping, shipbuilding, marine equipment, seaports, maritime services, yacht building, offshore services and fishing; three sectors could be added from a national, broader perspective: Navy and coastguard, inland navigation and maritime works 5

KEY FIGURES OF ALL EUROPEAN SEA-RELATED SECTORS EU-27 + Norway 15 000 Added value Employment Direct (Σ direct) added value = 186 600 million Direct (Σ direct) employment = 4.78 million persons = 15 000 million of added value 500 000 Average Average value value added/employee added/employee == 39 39 000 000 3 200 15 100 3 800 8 700 28 400 3 400 17 200 4 000 100 100 50 25 400 300 300 1 200 200 500 2 800 23 000 24 300 6 400 Europe: Europe: 1.65% 1.65% MT: 11.36% MT: 11.36% CY: 9.07% CY: 9.07% EE: 8.83% EE: 8.83% LV: 7.71% LV: 7.71% NO: 6.23% NO: 6.23% DK: 4.19% DK: 4.19% GR: 3.24% GR: 3.24% LT: 2.59% LT: 2.59% ES: 2.53% ES: 2.53% NL: 2.25% NL: 2.25% Percentage Percentage maritime maritime employment employment in in national national employment employment** 55 000 145 000 38 000 35 000 634 000 191 000 48 000 1 000 147 000 287 000 4 000 4 000 504 000 4 000 6 000 10 000 136 000 103 000 171 000 876 000 725 000 279 000 Europe: Europe: 2.25% 2.25% MT: 13.51% MT: 13.51% CY: 12.02% CY: 12.02% NO: 6.85% NO: 6.85% EE: 6.54% EE: 6.54% GR: 6.39% GR: 6.39% LV: 5.36% LV: 5.36% DK: 5.26% DK: 5.26% ES: 4.62% ES: 4.62% BG: 3.46% BG: 3.46% PT: 3.34% PT: 3.34% 20 000 500 42 000 1 200 * 40 000 70 000 Percentage Percentage maritime maritime added added value value in in national national GDP GDP** 500 11 500 50 000 156 000 1 000 1 000 2 100 = 500 000 persons employed Top-10 countries in terms of share of maritime added value (and employment) in all sea-related Areas are listed; for other countries % share is well below 2.5% (and 3%) Value added amounts to 186 600 million (of which 88% in the top-10 countries) and employment to 4.78 million persons (of which 83% in the top-10 countries) 6

KEY FIGURES TRADITIONAL MARITIME SECTORS EU-27 + Norway 10 000 Added value Employment Direct (Σ direct) added value = 123 400 million Direct (Σ direct) employment = 1.92 million persons = 10 000 million of added value 200 000 = 200 000 persons employed 2 900 12 900 3 400 800 900 900 6 900 18 800 100 110 000 48 000 39 000 6 000 22 000 251 000 3 100 128 000 37 000 14 900 1 000 100 117 000 197 000 2 000 30 15 900 200 4 000 230 000 300 100 7 400 3 000 80 000 30 000 30 000 13 300 137 000 196 000 3 400 300 4 000 2 000 1 000 300 1 000 26 000 83 000 400 9 900 3 700 42 000 Average Average value value added/employee added/employee == 64 64 400 400 76 000 8 000 10 000 400 Value added in traditional maritime sectors amounts to 123 400 million (87% in top-10 countries) and employment of 1.92 million persons (80% in top-10 countries) 7

KEY FIGURES COASTAL (AND MARINE) TOURISM EU-27 + Norway 2 000 Added value Employment Direct (Σ direct) added value = 46 600 million Direct (Σ direct) employment = 2.42 million persons = 2 000 million of added value 300 000 60 500 500 30 000 18 000 30 1 000 7 800 5 000 Average Average value value added/employee added/employee == 19 19 300 300 200 1 000 = 300 000 persons employed 6 000 48 000 21 000 20 1200 7 000 347 000 6 000 70 53 000 1 600 200 73 000 10 000 10 000 6 300 208 000 7 000 100 200 46 000 200 1 200 12 700 73 000 109 000 8 900 652 000 481 000 1 900 165 000 200 11 000 800 31 000 Value added in coastal and marine tourism amounts to 46 600 million (93% in top-10 countries) and employment of 2.42 million persons (91% in top-10 countries) 8

KEY FIGURES FISHERIES EU-27 + Norway 1 000 Added value Employment Direct (Σ direct) added value = 16 200 million Direct (Σ direct) employment = 444 000 persons = 1 000 million of added value 50 000 80 190 3 000 Average Average value value added/employee added/employee == 36 36 600 600 120 1 200 = 50 000 persons employed 17 000 4 000 7 000 11 000 90 600 730 7 000 33 000 240 390 90 11 000 60 1 500 14 000 9 000 700 2 000 20 000 16 000 2 000 30 10 3 200 30 1 000 65 000 20 700 2 000 600 10 10 000 60 900 5 670 2 800 2 100 33 000 87 000 48 000 38 000 1 200 30 1 000 30 1 000 Value added in fisheries amounts to 16 200 million (90% in the top-10 countries) and employment of 444 000 persons (85% in top-10 countries) 9

DETERMINATION OF CLUSTER STRENGTH Star Method à la European Cluster Observatory (adapted) - Size: Top-10 percentile of employment (or value added) in an Area (cluster) in all observed regions* - Specialisation**: Top-10 percentile of Specialisation Index in an Area (cluster) in all observed regions - Focus: Top-10 percentile of share of employment (or value added) in an Area (cluster) in comparison to total employment (or added value) in a region In addition, Policy Research studied the financial relationships within a cluster and gave an overview of leader firms per country * The Nomenclature of Territorial Units for Statistics (NUTS) provides a single uniform breakdown of territorial units for the production of regional statistics for the European Union. The NUTS is a three-level hierarchical classification: NUTS 1, NUTS 2 and NUTS 3. The analysis in this study focuses on the 157 NUTS 2 regions (0.8 to 1.5 million inhabitants). ** In the methodology developed and used so far by the Stockholm School of Economics the specialisation star has been defined differently; as there appeared to be a strong (linear) correlation between the specialisation and focus star in that methodology, Policy Research proposed an alternative specialisation star, which has been discussed extensively with the European Commission - DG Enterprise & Industry; the Specialisation Index is measured as the sum of the squared sector shares within a cluster 11

CLUSTER STRENGTH TRADITIONAL MARITIME SECTORS Cluster strength with respect to employment (EU-27 + Norway) FI SE Golden, silver or bronze star regions (size, specialisation and focus) Maritime employment (< 25 000) Maritime employment (25 000-50 000) Maritime employment (> 50 000) IE Bronze PL DE LU CZ Silver SK FR AT HU Gold SI RO IT PT BG ES GR MT CY Golden-star regions in the traditional maritime sectors are Sud-Est (Ro), Pomorskie (Pl), Liguria (It), Haute-Normandie (Fr) and Vestlandet (No) 12

CLUSTER STRENGTH TRADITIONAL MARITIME SECTORS Cluster strength with respect to value added (EU-27 + Norway) FI SE Golden, silver or bronze star regions (size, specialisation and focus) Maritime added Maritime added value value (< 2 billion) ( 2-3 billion) IE Maritime added value (> 3 billion) PL Bronze DE LU CZ Silver SK FR AT HU SI Gold RO IT PT BG ES GR MT CY In terms of value added North-West Europe hosts most of the golden and silver star regions 13

CLUSTER STRENGTH COASTAL (AND MARINE) TOURISM Cluster strength with respect to employment (EU-27 + Norway) FI NO SE EE Golden, silver or bronze star regions (size, specialisation and focus) Maritime employment (< 25 000) Maritime employment (25 000-50 000) LV Maritime employment (> 50 000) LT IE UK Bronze PL BE DE LU CZ Silver SK FR AT Gold SI PT HU RO BG ES Canarias (ES) Most golden and silver star regions in coastal (and marine) tourism are situated in the South-West Mediterranean 14

CLUSTER STRENGTH FISHERIES SECTOR Cluster strength with respect to employment (EU-27 + Norway) FI Golden, silver or bronze star regions (size, specialisation and focus) Maritime employment (< 5 000) Maritime employment (5 000-10 000) NO SE Maritime employment (> 10 000) IE Bronze UK PL Silver BE DE LU CZ Gold SK FR AT SI IT PT HU RO BG ES MT CY Golden star regions in fisheries in terms of employment are Galicia (Es), Bretagne (Fr) and Algarve (Pt) 15

MAIN TRENDS European maritime cross-sector trends - Increasing worldwide competition, in particular from Asia (e.g. Singapore, Dubai) - Increasing public awareness of the importance of maritime sectors - Recognition of difficulties with regard to recruitment - Increasing focus on Research, Development and Innovation Specific maritime sector trends - Shipping sector: growth sector, captured in EU (EU-policy) Maritime manufacturing: interaction on advanced technological products Seaports and marine services: technological focus on processes Fisheries: cumbersome position in which most companies operate + ageing of the fleet 17

MAIN POLICIES European maritime policy - Green Paper on a Future Maritime Policy for the European Union (2006) and The Integrated Maritime Policy package (Blue Book*, 2007) - State Aid Guidelines on Maritime Transport (latest revision in 2004) - Motorways of the Seas: introducing new intermodal maritime-based logistics chains in Europe - Support for innovation (DG Enterprise and Industry) - European Common Fisheries Policy Main national maritime policies - Implementation of the State Aid Guidelines on Maritime Transport Promotion of the maritime cluster Increase intake of personnel and improve education Stimulation of RDI * The vision document (Blue Book) was accompanied by a detailed Action Plan including recommendations on among others: regulatory obstacles, collective learning, maritime spatial planning, marine observation and data network, development of multisector clusters, strengthening employment, ports policy EU-level: increasing focus on integrated maritime cluster policy National level: awareness of importance of maritime clusters increases; maritime policy is usually sector-focused 18

CONTENTS Main objectives of the study Overview of maritime clusters, trends and policies Assessment of the role of maritime cluster organisations - European maritime cluster organisations archetypes - Main characteristics of maritime cluster organisations - Current role of maritime cluster organisations (SWOT) - Main benefits and good practices of maritime cluster organisations Conclusions and recommendations 19

ARCHETYPES OF CLUSTER ORGANISATIONS Characteristics Initiative Development of maritime clusters TOP-DOWN E.g. Germany COMBINATION PLAY E.g. Dutch Maritime Network Government induced and/or supported Holistic and cluster wide approach Focus on long-term strategy and policy: Economy (e.g. level playing field and growth) Education and recruitment Research, development and innovation Export Common interest (e.g. environment and safety) Focus on professionalism and cooperation/integration of maritime sectors BOTTOM-UP E.g. Maritimt Forum in Norway Induced and/or supported by strong leader firms and/or sector associations Limited cluster approach based on supporting companies and sector associations Focus on short-term benefits: Rules and regulation Tax regime Labour market and job promotion Innovation project support Export support Focus on operational problems Cluster organisations can be initiated by the government, by companies and/or sector or by a combination of the two 20

MAIN CHARACTERISTICS OF MARITIME CLUSTER ORGANISATIONS Key characteristics of national and regional maritime cluster organisations Sector Sector participation participation The The sectors sectors in in the the narrow narrow definition definition of of the the maritime maritime cluster cluster (shipping, (shipping, shipbuilding, shipbuilding, marine marine equipment, equipment, seaports, seaports, maritime maritime services, services, recrearecreational tional boating boating and and Navy) Navy) participate participate most most in in the the cluster cluster organisations organisations Sector Sector represenrepresentation tation Cluster Cluster organisations organisations indicate indicate that that they they (are (are eager eager to) to) capture capture most most sectors, sectors, although although in in practice practice this this sometimes sometimes seems seems not not (yet) (yet) the the case case Reasons Reasons for for establishment establishment Main Main reasons reasons for for establishing establishing aa maritime maritime cluster cluster organisation organisation are are to to increase increase competitiveness, competitiveness, to to promote promote maritime maritime sectors, sectors, and and to to improve improve coordination coordination within within the the cluster cluster (Level (Level of) of) resources resources National National as as well well as as regional regional government government induced induced cluster cluster organisations organisations have have the the largest largest budgets budgets (mainly (mainly public public means); means); bottom-up bottom-up organisations organisations are are mainly mainly financed financed with with private private funding funding 21

SWOT-ANALYSIS OF NATIONAL TOP-DOWN INITIATED CLUSTER ORGANISATIONS Strengths Weaknesses Focus on long term strategy and policy Increasing the growth of all sectors within the cluster Strong focus on RDI Ability to create a level playing field (through legislation) High budgets to finance activities Positively influence common interests (e.g. environment and legislation) Difficult to define to which cluster(s) a sector belongs (e.g. ports: logistics or maritime cluster) Not always clear which interests are at stake or how they can be aligned with other (maritime) sector interests Continuous balancing between interests of cluster organisations and sector associations requires constant interaction Surplus value of cluster organisations needs to be proved constantly Widespread variety of interests leads to a focus on universal, softer themes Opportunities Threats Increasing cooperation on European level to discuss best practices and lessons learned Maritime sectors could take the initiative (or be invited) to establish a single-point-of-entry to increase structural interactions with the government Involvement of sector opinion in the structural evaluation of cluster organisation s activities Lack of an integrated cluster approach (several ministries involved without in-depth cooperation) Limited sector involvement could lead to suboptimal maritime cluster policy Focussing too much on long-term benefits for the maritime sectors may hamper or conflict with the clusters companies short term interests National top-down organisations focus on increasing competitiveness and on strategy of the maritime cluster by balancing sectors needs 22

SWOT-ANALYSIS OF NATIONAL BOTTOM-UP INITIATED CLUSTER ORGANISATIONS Strengths Weaknesses Cluster awareness contributes to enhancing business efficiency and opportunities Focus on operational problems Structural evaluation of the cluster organisations by the sector (e.g. membership contribution) Ability to act as single-point-of-entry to the government to discuss (often short-term) sectors interests (e.g. tax and regulation) Organisation of events (e.g. to promote working in the cluster) Differences in sector interests can lead to a difficult decision-making process within cluster organisations, often resulting in a rather narrow focus on softer themes (e.g. promotion) Unbalanced protection of company/sector interests: Limited cluster approach: in many cases, not all members or supporting companies and sector (associations) have the same weight and influence within a cluster organisations Strong impact of largest contributing members in the decision-making process could lead to an imbalance in the protection of (all) interests Limited focus on strategy and long-term growth of the involved sectors and the cluster as a whole Opportunities Threats Increasing cooperation on European level to discuss good practices and lessons learned Increase government involvement (and budget) in the cluster organisation to improve mutual understanding and fine-tune policy making Focus on longer term maritime sector benefits (strategy and growth) Too narrow (local) focus may lead to the suboptimal functioning of a maritime cluster organisation Insufficient attention for the role of (relatively) smaller sectors and companies within the maritime cluster National bottom-up organisations often focus on softer and short-term operational issues from a narrow scope 23

OVERVIEW OF THE MAIN BENEFITS OF CLUSTER ORGANISATIONS 11 Increase in efficiency Companies can operate with a higher level of efficiency drawing on more specialised assets and suppliers with shorter reaction times than they would be able to in isolation Ö Increase internal and external communication on maritime cluster through promotion to enhance possibilities to cooperate efficiently 22 Increase in level of business formations Start-ups are more reliant on external suppliers and partners, all of which they find in a cluster, which may reduce the costs of failure as entrepreneurs can fall back on local employment opportunities in the many other companies in the same field Ö Focus in maritime cluster organisation on education, training and the labour market 33 Knowledge spillovers and the close interaction with customers and other companies create more new ideas and provide intense pressure to innovate while the cluster environment lowers the cost of experimenting Ö Focus in maritime clusters on RDI Higher level of innovation Source: Policy Research based upon Europe Innova and Oxford Research (2008) Cluster policy in Europe Benefits of cluster organisations are mainly the increase of efficiency within the cluster, the increase in number of business formations and the higher level of innovation 24

GOOD PRACTICES OF NATIONAL MARITIME CLUSTER ORGANISATIONS BASED UPON MAIN CROSS-SECTOR TRENDS Cluster benefit Approach Main initiatives Sector involvement Mainly project-based approach Promotion campaigns through websites, videos and presentations Report on economic importance of the cluster Organising promotion events Almost all sectors are involved in these initiatives Platforms to exchange best practices Recruitment campaigns and fairs Programs in cooperation with universities and professors Almost all sectors are involved in these initiatives with leading roles for shipping and shipbuilding industry On (governmental) project basis Structural cooperation with RDI-institutes and universities Platforms to exchange best practices Almost all sectors are involved in these initiatives with leading roles for shipbuilding, marine equipment, offshore supply and shipping 11 Promotion of the maritime cluster 22 Focus in maritime cluster organisation on education, training and the labour market** Project-based and structural approach 33 Focus in maritime clusters on RDI Project-based approach based upon (high budget) government support programs and structural approach Cluster organisations focus on promotion, stimulation of education, training and labour market and, improving research, development and innovation (RDI) 25

A PUBLIC-PRIVATE INTEGRATED MARITIME CLUSTER ORGANISATION AS GOOD PRACTICE Structure A public-private integrated cluster organisation captures maritime stakeholders with logical links/relations* (i.e. government and sectors represented by trade associations, private persons on personal title and/or companies) as initiator or as member of that organisation (on the basis of equality relations) Main benefits of a public-private integrated maritime cluster organisation: Well-structured discussion between government and sector Cluster-wide approach Focus on long-term growth and development as well as on (often short-term) sectors interests Ability to create a level playing field (through legislation) Sector involvement in the evaluation of the cluster organisation (through membership contribution) Improved communication (horizontally and vertically) * Sectors that have limited logical links and/or relations with other maritime sectors experience limited cluster benefits Public-private integrated cluster organisations capture all relevant maritime stakeholders in order to have well-structured discussions between government and sector 26

CONTENTS Main objectives of the study Overview of maritime clusters, trends and policies Assessment of the role of maritime cluster organisations Conclusions and recommendations 27

CONCLUSIONS Maritime clusters, trends and policies Facts and figures - 4.8 million people employed / value added of about 186.6 billion euros Traditional maritime sectors account for 66% of value added / 40% of employment Coastal (and marine) tourism account for 25% of value added / 50% of employment Fisheries (and other sectors) cover the remaining 9% of value added / 10% of employment - European maritime sectors are clustered in about 10 countries: NW Europe for traditional sectors and SW Europe for coastal tourism as well as fisheries Trends - Increased public awareness of the importance of maritime sectors and focus on RDI and employment issues Policies - EU-level: increasing focus on integrated (marine and) maritime cluster policy - National level: awareness of importance of maritime clusters increases; maritime policy is usually sector-focused 28

CONCLUSIONS Role of maritime cluster organisations All European countries with a maritime cluster have access to that cluster through a maritime cluster organisation Policy (initiatives) and actions are translated to European, national and regional level, although not in a uniform manner Maritime cluster organisations are mostly historically established (and regionally grown) based upon the specific needs of the cluster and its participants and upon the country s culture Top-down and bottom-up initiated clusters focus in general on same content Topics of cluster organisations are mostly softer topics (e.g. innovation and labour market); in top-down maritime cluster more opportunities are created for strategical issues through the availability of funding Limited direct evaluation of impact/success of the actions of cluster organisations on project-basis, but indirectly through the evaluation of maritime cluster organisations and the impact on financing (membership contributions) In principal, any organisation concept can do the job; nevertheless, organisations that are able to capture best of both worlds seem most natural to balance public and private interests 29

RECOMMENDATIONS Increased effort to build a permanent database on economic facts and figures Clear understanding of difficulties with respect to data collection (Eurostat data not detailed enough) Work towards a monitoring system in which national cluster organisations play a key role Organise a round table (Ministers) to discuss and launch such an initiative Clear-cut approach from EC with respect to maritime cluster Communication of importance and strength of maritime cluster (cf. integration of results in website European Cluster Observatory) Strategy towards future role of European, national and regional maritime cluster organisations Approach towards monitoring the economic importance of the maritime cluster Platform to exchange best practices in the field of labour market (recruitment/education) Where possible, integration of marine and maritime affairs (cf. marine environment) Investigate ways to strengthen RDI (cf. Maritime Knowledge and Information Community) 30

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