A culture of co-opetition

WORKING TOGETHER: Cluster development specialist Ifor Ffowcs-Williams (left) is joined by Trust Tairawhiti business growth adviser Wendy Gatley and the trust’s tourism development adviser Holly Hatzilamprou at Mr Ffowcs-Williams’ talk about how businesses can co-operate in a cluster while remaining competitive.Picture by Paul Rickard

For those who bristle at blend-words such as hangry, mansplain or masstige, look away now.

“Co-opetition” is the buzzword for the concept of businesses working together, as in a cluster, while keeping some business interests private. Co-opetition is about bringing people together around a particular objective.

Business clusters are a natural agglomeration of businesses often in a specific geographic areas. The most famous business cluster in the world would be Silicon Valley in California; here firms compete on points of differentiation and collaborate by way of networking and sharing some, but not all, their ideas and expertise.

In his recent talk in Gisborne — Clustering for Business Growth, an International Perspective — cluster development specialist Ifor Ffowcs-Williams, of Cluster Navigators Ltd, first outlined international examples of successful clusters.

“Some of these places are similar to Gisborne,” he said.

“What makes these places tick economically?”

“Scone in Australia is home to 80 percent of Australian thoroughbred exports. Only Kentucky has more.”

Scone Equine Hospital is the largest equine veterinary practice in the Southern Hemisphere and offers tertiary education and training for the Australian horse industry.

“Over time, different elements come together.”

Many businesses benefited from operations incidental to a business cluster, said Mr Ffowcs-Williams.

Cairns’ tourism cluster involved travel agents and tour operators but also benefited local transport, banks, accommodation and eateries.

“It’s often difficult to get academic nous, government agencies and businesses in a row.”

Gisborne had a lot of logs, a lot of which left the port city unprocessed, he said. The Swedish city of Ornskoldsvik (population about 33,000) not only shipped out raw timber but also all of its school leavers, the city’s mayor told him.

“How do we provide quality jobs to school kids and how do we add value to those logs without shipping them out?” said Mr Ffowcs-Williams.

“How do we be smart about our resources?

“Strip down all raw materials almost to the molecule, then consider what we’ve got.

“See what we’ve got then add value.”

An Indian textile giant bought a little company in Ornskoldsvik. The company, Domsjo Fabriker, is a biorefinery that converts raw forest materials into speciality cellulose, lignin and bio-ethanol.

“They wanted to explore cellulose and searched the world,” said Mr Ffowcs-Williams.

“Investment does come to a place, not from a PGF (Provincial Growth Fund) grant but because it stacks up on a world scale to go to that place.”

Mr Ffowcs-Williams referred to the triple helix model of innovation. This involves interactions between academia, industry and government, to foster economic and social development.

The model features in concepts such as the knowledge economy and knowledge society. The culture of co-opetition means university, industry and government representatives are comfortable sitting down together and “partially opening their jackets”, he said.

“Where do we fit into this?” said Mr Ffowcs-Williams.

“What’s our point of difference, our specialisation? And can we bring teamwork and alignment around that specialisation?

Clustering accelerated growth, he said.

Firms in clusters were more competitive than similar firms outside clusters; there was more employment, higher economic growth and better productivity and innovation.

Businesses in Tairawhiti might centre on specific fields such as honey, timber, medical cannabis or IT.

“In today’s world you can’t be good at everything. Buyers go more now to ‘go-to reputation’ places in a specific field.”

The Food and Agribusiness Network (FAN) is a global organisation that creates a culture of collaboration to connect and grow a region’s food. It involves farmers, food processors, 200 businesses and support organisations. Each year, FAN has four major network events with keynote speakers, a minimum of six business skill workshops and six site tours.

Four key principles drove cluster development, said Mr Ffowcs-Williams.

Business clusters were business-led; public agencies provided support (he cited Callaghan Innovation, New Zealand Trade and Enterprise, and Trust Tairawhiti as examples of potential support organisations); there was “academic underpinning” in which university representatives were involved; and teamwork — talking and networking.