MINISTRY OF TRADE AND INDUSTRIAL DEVELOPMENT Clusters Promotion Program in Mexico (Programa de Promoción de Agrupamientos Industriales) The Competitiveness Institute, 2nd Annual Conference Varese, Italy November 1999
Mexico 8.0 6.0 4.0 2.0 GROSS DOMESTIC PRODUCT % 6.7 5.2 4.8 2.5 30.0 20.0 10.0 20.7 EXPORTS % 15.0 6.5 10.8.0 1996 1997 1998 1999* 0.0 1996 1997 1998 1999* FTA s 1992: Chile 1994: US, Canada 1995: Colombia, Venezuela, Bolivia and Costa Rica 1998: Nicaragua Negotiating with: - European Union - 7 countries from Latin America - Israel
Regional Concentration of the Economic Activity (GDP) Region Population (%) GDP (%) GDP per Cápita (1999*) Dollars USA North 21.3 27.0 5,502 Center* 58.4 59.9 4,438 South- South-eastern * Includes DF, 23% del GDP 20.4 13.1 2,785 Gulf of Mexico Pacific Ocean
NATIONAL DEVELOPMENT PLAN 1995-2000 Economic growth More and better jobs Industrial Policy and Foreign Trade Program To improve competitiveness of national industrial plant Level of Support to Enterprises Individual Sectorial Regional Cluster Promotion Program
Clusters Promotion Program Industrial Industrial Policy Policy Descentralization Descentralization Active Active Participation Participation of of Business Business Leaders, Leaders, Trade Trade Associations Associations and and Chambers Chambers Competitiveness Improvement Fostering Regional Development Joint Joint Actions Actions of of Federal Federal and and Local Local Governments Governments (States (States and and Municipalities) Municipalities) Interinstitutional Interinstitutional Coordination Coordination
Human Resource Development Specialization of of Infrastructure and and Supporting Services Take Take advantage of of the the Productive Vocation of of each each region Shared Strategic Vision Enterprises - Local and Federal Governments New New Investment and and Export Opportunities Initiatives for for Business Cooperation and and Net Net Working Strengthening of of Local Supplying
Methodology Sectors Identification Diagnostic Consensus Ministry of Trade and Industrial Promotion Agents Involved Entreprenures Federal State GovernmentlGovernment Entreprenures Lidership Strategic Plan and Guidelines Consensus Guidelines Implementation - Interinstitutional co-ordination Consultants Hiering Research and Field Survey - Interviews - Focus Groups Competitivness Stregthening Follow up and Evaluation New Initiatives Generation
Sectors Selection Pragmatic focus on cluster bounderies according to state geoghapic limit. Businness Organisations are usually state based. In fact clusters are: Facilitate local - federal government coordination. Binational Clusters: Electronic Industry in Baja California and San Diego C.A.: Leader in T.V. Production. Interstate Clusters: Textil and apparel clusters: Puebla and Tlaxcala: Leader in the production of cotton woven fabric and maquiladora exports. Durango -Coahuila: Leader in denim production and apparel. Intrastate Clusters: Jewelry in the Municipality of Taxco, Guerrero.
Selected Sectors (Campeche, Colima, Michoacán, Nayarit, Sonora, Veracruz, Tabasco, Zacatecas.) (B.C.S., Chiapas, Sinaloa, Q.Roo.) To take advantage of exports growth to consolidate or detonate the regional development Fiber-Textile-Apparel (Aguascalientes, Durango, D.F. Edo. de Mex.,Hidalgo, Jalisco, Morelos, Oaxaca, Puebla, Querétaro, Tlaxcala.) Food and Beverages Fruits and vegetables Fishing and aquacult ure. Meat and poultry (Yucatán, Campeche) To add value to natural resources and primary production Electronics (B.C., Nuevo León, Tamaulipas) Automotive (Nuevo León, Aguascalientes) Furniture (B.C.) Jewelry (Guerrero) Metal-Press (San Luis Potosí) Construction Materials (Chihuahua)
Fiber-Textile-Apparel Cluster Fiber-textile-apparel industry sharing (%) NATIONAL Distrito Federal Durango Hidalgo Jalisco Edo. de México Morelos Oaxaca Puebla Querétaro Tlaxcala Firms 21.5 1.5 3.5 9.7 12.5 0.9 0.6 8.3 1.5 2.4 Employment 11.0 5.3 4.3 3.9 13.4 1.0 0.2 12.0 2.9 2.8 42.8 56.8 Exports 9.7 7.8 1.3 2.7 8.2 1.0 0.0 9.5 3.2 2.6 46.1 15,811 Companies 772,988 Employment 8,700 Million USD exports in 1998
Fruit and Vegetable Processing Cluster Sonora: Grapes, asparagus, potato, tomato and orange Zacatecas: Peach, grape, dried pepper, guava, prickly pear, garlic and beans. Veracruz: Orange, lemon, macadam, chayote, watermelon, papaya, pineapple, melon, cucumber, blackberry, banana and green pepper. Nayarit: Mango, banana, tomato, watermelon and chili pepper. Colima: Lemon, mango and coconut Michoacán: Mango, avocato and strawberry Tabasco: orange and lemon. Campeche: Mango, tropical fruits, orange, melon, watermelon, chili pepper
Fishing Processing and Aquaculture CAMPECHE Aquaculture: shrimp and tilapia B.C.SUR Fishing and Aquaculture: Shrimp, squids and sardine SINALOA Fishing and Aquaculture: Shrimp, Tunna fish and catfish CHIAPAS Fishering and Aquaculture: Shrimp, mojarra, tilapia and shark QUINTANA ROO Fishing and Aquaculture: shrimp, periwinkle, lobster, mero and octopus.
Mexican Automotive Industry Clusters Mexicali - Kenworth (T) A: automobile T: trucks B: busses E:engines Hermosillo - Ford (A) Chihuahua - Ford (E) Gómez Palacio, Dgo. - Renault (E) Toluca - Chrysler (A, E) - BMW (A, E) - M. Benz (A, B) - G.M. (E) Aguascalientes - Nissan (A, E) - Omni Integ. (AU) - Ruvesa (AU) Guadalajara - Honda (A) Ramos Arizpe - GM (A, E)) D.F. - Chrysler (T) - MASA (B) - Volvo (T) Silao - GM (C) Cuernavaca - Nissan (A,T) Saltillo - Volvo (T) - Chrysler (E, A) Monterrey* - Tramosa (T) - Navistar (T) - M. Benz (B) San Luis Potosí - Scania (T) - Cummins (E) GOLFO DE MÉXICO Cuautitlán - Ford (A, T, E ) Puebla - V.W (A, M) 291,000 employees 23,600 million USD of exports in 1998 Cd. Sahagún, Hgo. - Dina (T, B, E))
Electric / Electronic Clusters SONY DAEWOO (SLRC) MITSUBISHI GOLDSTAR ACER HONEYWELL ROCKWELL MOTOROLA ALTEC KYOCERA ZENITH TOSHIBA PHILIPS THOMSON KENWOOD ELECTROLUX ACER THOMPSON AUDIO & VIDEO HOSEHOLD APPLIANCES COMPUTER EQUIPMENT TELECOMUNICATIONS OTHERS SANYO SONY HITACHI MATSUSHITA JVC SAMSUNG PIONNER SANYO PHILIPS CASIO KODAK CANON KYOCERA INTERNATIONAL RECTIFIER I. B. M. H. P. NEC LUCENT TECHNOLOGIES MOTOROLA KODAK CUMEX SIEMENS MABE GE MABE SANYO WHITE - WESTINGHOUSE MEX* TEXAS INTS. XEROX SIEMENS VISTAR VITROMATIC CLARION DAEWOO BLACK & DECKER MABE SINGER SIEMENS NEC MABE BRAUN ELECTROLUX SUNBEAM KOBLENZ ERICSSON ALCATEL/INDETEL AMP MABE HAMILTON BEACH* PIONEER DANFOSS COMPRESSORS VITROMATIC MABE KODAK NIPPON DENSO AXA YAZAKI GESTAR SINGER VITROMATIC ELECTROLUX FILTER QUEEN HOOVER IMAN KOBLENZ MABE PHILIPS SUNBEAM OLIVETTI ZENITH DELCO PHILIPS SONY MATSUSHITA VITROMATIC NOKIA LUCENT TECHNOLOGIES FUJITSU CONDURA DELNOSA 9715 (A): FIG 103
First Phase Consultants hiring 4 SECOFI public bids 2 Local consultants were hired to make diagnostics and strategic plans to promote 30 clusters nation-wide. Federal government allocated 550,000 U.S. Dollars Second Phase Also some state government allocated funds for a second diagnostic. State Sector Consultant Nuevo León Electronic Industry Academic Institution Tabasco Tourism Private consultants Nayarit Tourism Private consultants Aguascalientes Fiber-Textil-apparel Academic Institution Veracruz Petrochemestry Private consultants Baja California Furniture Private consultants Tamaulipas Electronic Industry Private consultants
International consultants with expertise in clusters promotion have rates that central or local governments can not afford. Local consultants have no experience in clusters promotion: They learned while doing it. The academic sector has shown interest on clusters promotion but lacks real life expertise. Need to strengthen local consulting skills.
Strategic studies and guidelines making Analysis of: Strengths Weakness Opportunities Treats Shock Therapy for agents of a cluster. All documents are available for public consultation at the internet: www.siem.gob.mx Programas de promoción Programa de promoción de agrupamientos industriales. Documents are only a first stage. Clusters promotion activities have to be very dynamic to consider market evolvment and competitive strategic changes.
Agents participation Initially, the federal government played an important role to: Suggest local authorities and private sector, the implementation of regionally based strategies to boost clusters development. Research and disseminate successful experiences regarding clusters development and promotion, both at national and international level. Suggest a working methodology.
The federal government reallocated resources and dedicated an office to clusters promotion as its main activity. The role of this staff is to act as facilitator or catalytic agent. Minister of Trade and Industrial Development Viceminister of Industrial and Foreign Trade Promotion General Direction for Industrial Promotion Cluster Promotion Team staff of 16 persons Automotive Automotive Electronics Electronics Metal Metal press press Fiber Fiber Textile Textile Apparel Apparel Textile Textile Apparel Apparel Jewelry Jewelry Agribusiness Agribusiness Livestock Livestock Agribusiness Agribusiness acuiculture acuiculture
In addition, the federal government, trained SECOFI s staff of the state offices to boost the program. State governments participate through the Ministries of Economic Development. State governments proposed and obtained the entrepreneurs leaders participation. Obtained Experiences Usually local governments get more involved when they initiate their administration. There are some difficulties to keep the local governments active participation specially when clusters initiatives are considered Government projects of the prior administration.
The federal govenment participation has helped facing the states government administration changes, and have more continuity to support the entrepreneurs initiatives of the strategic plans for cluster promotion. 2 States 1 State 17 State Governments Changed 2 States 2 States 1 State 2 States 3 States 2 States 1 State 1 States Clusters Promotion Program Operation 1997 1998 1999 2000
Guidelines Implementation Federal government role Motivate the the active active participation of of involved agents agents Entrepreneurs leaders State governments Strength interinstitutional co-ordination Facilitate cluster reinforcement initiatives Higher impact of public policies Support follow follow up up and and evaluation activities in in the the states states Generate new initiatives Results dissemination Successful experiences exchange Clusters strength
Guidelines Implementation Institutionalization Agreements signature between entrepreneurs, business organizations, chambers, state governments and federal government, for cluster promotion. 1998 : Baja California, Durango and Morelos. 1999 : Colima, Hidalgo, Puebla, Queretaro, Tamaulipas, Veracruz and Zacatecas.
Encourage organizational development process: Association of Automotive Parts Manufacturers in the North East Zone Association of Apparel Producers in Queretaro, Puebla and Tlaxcala, Oaxaca Creation of the Mexican Counsel for Cotton Contribute to building up the capabilities of intermediary private institutions and associations Communicate the need of strategic planning to the local governments with the driven force of the private sector.
Interinstitutional Coordination Clusters promotion is a methodology that allows a more efficient government support for enterprises. Intersecretarial Commission for Industrial Policy Clusters Promotion Institutional Supply Supply Initiatives identification 158 158 programs to to support enterprises SECOFI Promotes consistency cooperation public agencies Facilitates the access to supporting programs Advises on public programs that can be useful to boost initiatives Feed back to policy design
New way of thinking about competition and competitive advantage New relationship between public and private sector New way of public services
New way of Public Services Demand driven services vs Supply of services Integrated, holistic and systemic support vs Isolated support Provide collective service vs Assistance to individual enterprises Cooperation and consistency between public agencies of local and central governments vs Rivalry and distrust between agencies, and between different levels of government More impact at a lower cost vs Higher cost and dispersion of efforts