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From Public Financing to Public Investment – A Summary of “Sustainable Financing of Cluster Initiatives” Webinar with Gerd Meier zu Kocker

Following the interest expressed by the ECCP cluster community to discuss themes of real interest in a facilitated dialogue with experts, the first ECCP Expert Talks Webinar took place on 4.12.2017, addressing the issue of the funding mix for cluster organisations.

The presentation “Sustainable Financing of Cluster Initiatives” focused on showing how the transition from the “usual” public funding towards more sustainable financing structures of clusters is possible. The expert speaker, Gerd Meier zu Köcker, Founder of the European Secretariat for Cluster Analysis, shared with more than 50 registered participants from the ECCP cluster community his vast experience and knowledge in cluster management development and cluster funding mechanisms in many countries.

In the introduction, he mentioned that at European level the financing mix evolved during the recent years, the most relevant changes being a reduction from well over 50% public funding in 2010-2012 to approximately 45% in 2016-2017, balanced by a corresponding increase on the side of membership fees. The same tendency is observed in regions with long history in attracting membership  funding, like Baden-Württenberg and Catalonia, while in the Scandinavian countries the public funding is still majoritarian. 

How do clusters approach the financing issue on a regular basis? There are three areas building together the financing structures:

1. Baseline support:
Public co-financing on regional and national level. The emphasis today lies in the value for money created through the clusters’ activities for the funding bodies.

2. Membership financing, through:

- Membership fees;

- Fee-based services, from the ones considered as most attractive, like legal advice and certifications to less rated, such as brainstorming or open innovation;

3. Strategic Projects:

These used to be represented in earlier times only by EU-Projects in various programmes. Although the participation of the cluster organisation in EU Projects is still relevant (sometimes vital) for the funding of the cluster - and possibly also for its activities for the members - today the shift is more and more oriented toward public investments. A key approach now is how cluster organisations can address public or public-private bodies such as regional development agencies, chambers of commerce or others and offer them special services, providing in such way added value for the regions or local governments. Such services can be, for example, new services of strategic relevance, complex cross-sectoral initiatives, regional development projects, strategic projects, international projects (members’ demand driven). This approach and related services demand high professionalism of the cluster organisation, that must be able to convince and earn the trust of the regional actors. Often, the process is easier where cluster excellence has been proven.

The question is how clusters can secure maximization of their funding either by creating more demand for public investments or through membership financing (more members? higher fees?). In addressing these questions our expert, Mr. Gerd Meier zu Köcker, provided real examples and success stories from German clusters.

Cluster managers are advised to make an inward-looking analysis of their abilities and assets related to the portfolio of their services, to “put on the table” what they know, what they really deliver, how the services are received – and perceived! – by the cluster members and particularly how much effort and costs are put into delivering them. The slides 11 and 12 of the attached presentation showcase such an analysis that helps the cluster management not only create an overview of the services and their potential differentiation, but also the financial impact for further decision-making.

The webinar ended with a Q&A sessions, where participants from several countries received the expert’s opinion on the specific addressed issues.

Please find below the recording of the webinar, as well as, attached, the presentation.

 

 

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