Adding Value to Commodities through Clustering
Many countries are struggling to add value to commodities. This note identifies a well-tested approach that has broad applications.
An opportunity for New Zealand, as the world’s largest exporter of raw logs, is onshore wood processing. Forestry Minister Stuart Nash is actively seeking to unlock the potential.?
New Zealand’s Forest Service requested a review of international wood processing clusters. I prepared the review in partnership with Mats Williams of Sweden. We drew on the experiences of eighteen regional clusters across thirteen countries [1].
Our review provided input for the recently released New Zealand Forestry and Wood Processing Industry Transformation Plan. The plan recommends government support for the development of advanced wood processing and bioeconomy clusters across New Zealand [2].
We acknowledge the extensive international contributions that provided the foundation for our report, including:
?We highlight some of our report’s conclusions. The broad conclusions are applicable to many other commodities:
·?????Strong regions are underpinned by strong clusters. Innovation continues to have a tight geography.
·?????Each of the clustering initiatives we reviewed had solid foundations. A lead regional opportunity for business growth and developing high-value jobs was centered on forestry and wood processing activities.?
·?????Many of the regional initiatives were introduced in response to a crisis and centered on transformational change.
·?????The lead in kickstarting a cluster’s development journey was frequently a regional agency. Support from national agencies came later.
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·?????As the clusters developed, they succeeded in attracting more distant customers, new investors, knowledge institutions, and national agencies.
·?????Strong initiatives have co-funding that includes public agencies and businesses; they develop broad forward agendas with governance that is business-led and public agencies and knowledge institutions in support.
·?????This regionally driven, bottom-up approach facilitated experimentation in adding value to a common commodity, leading over time to differentiation.
·?????Most of the clustering initiatives have scaled up over time, some ten-fold. ?
?We appreciated the opportunity to draw on international experiences, and to make these experiences relevant for New Zealand. The learnings have wide applications.
Thank you! Tack!
Ifor Ffowcs-Williams & Mats Williams
Pacific Regional Program Operations Director
2 年Jeff Puritau
The international “connector”. Investments, Wine, Modular Housing, Hospitality, Entertainment , R&D, distribution, manufacturing, “sustainability”, esports, health tech
2 年Very true. Finland is making a go at it. Working on cluster collaborations
Evidence driven leader, mentor, and advisor. Teaching in digital transformation disruption and design. Developing and evaluating courses in innovation across the Pacific
2 年Ifor Ffowcs-Williams, it seems that with the world of enterprise becoming less stable and a move towards nationalism in some regions, clusters are coming back into focus. It seems to me that few know more about clusters than you. Certainly in Australasia. Your long term 35 plus years determination in this sector deserves a mention. Keep up the fabulous advocacy and facilitation.
Affiliate Faculty and Co-Leader of the Knowledge Generation Council at Harvard Business School
2 年Well done - Joe Friel MBA
Director, Centre for Hydrogen and Renewable Energy & Executive Director Regional Futures - Energy Transitions, CQUniversity | Vice Chair, Hydrogen Flight Alliance | Chair, Queensland Manufacturing Institute
2 年Fantastic Ifor. I just cruised around NZ and saw large stockpiles of logs at most ports, particularly Port Chalmers, Lyttelton and Napier. Clustering is almost guaranteed to bring greater and long-term value.