The Cluster Methodology
The cluster methodology is an approach that involves supporting regional groups of companies to think strategically and work together. By cooperating they are able to share resources and reduce costs, jointly market products to larger customers, improve lobbying efforts and increase quality.Working with clusters also means strengthening stakeholders outside industry, those which support the private sector and facilitate its growth and development. Such stakeholders include government, universities, business associations and consulting firms. CCP’s task is to build capacity in these clusters and stakeholders to cooperate in pursuit of common objectives.Three industry sectors have already been selected to receive assistance; these are: tourism, food processingand horticulture. Each will be supported through geographic concentrations of co-located firms, otherwise known as clusters. By focusing on geographic clusters of firms, CCP will be able to support those most likely to work together and benefit from cooperation. Tourism, food processing and horticulture comprise three very important industries in support of overall economic development in Tanzania.
Strengthened value chains – Learning more about their own value chains (other suppliers, producers, processors, partners, distributors and exporters serving the local cluster) opens up avenues to work with new partners, improve quality, access new markets, reduce costs.
Joint purchases – Individual firms which purchase inputs and materials have little influence over suppliers. However, through cooperation and joint purchases they may reduce costs through greater leverage and volume pricing.
Combined outputs – Individual firms typically lack the economies of scale and volume to produce goods/services in the quantities needed by many buyers. Cooperating with others in the nearby cluster allows larger contracts and customers to be sought.
Strategic vision – Clusters of firms are much better equipped (than individuals) to develop and pursue a strategic vision, which benefits the entire cluster and raises their collective performance.
Attract support – Firms which cooperate are better able to tap into available support programs and mechanisms, including: training to improve productivity or management practices, assistance to adopt international quality standards and of course financing.
Policy reform – Cooperation also involves harnessing the power of numbers wherein a cluster of firms, with its greater economic and social weight, is able to more effectively articulate reform priorities then advocate using well constructed reform platforms.
The cluster methodology is an approach that involves supporting regional groups of companies to think strategically and work together. By cooperating they are able to share resources and reduce costs, jointly market products to larger customers, improve lobbying efforts and increase quality.Working with clusters also means strengthening stakeholders outside industry, those which support the private sector and facilitate its growth and development. Such stakeholders include government, universities, business associations and consulting firms. CCP’s task is to build capacity in these clusters and stakeholders to cooperate in pursuit of common objectives.Three industry sectors have already been selected to receive assistance; these are: tourism, food processingand horticulture. Each will be supported through geographic concentrations of co-located firms, otherwise known as clusters. By focusing on geographic clusters of firms, CCP will be able to support those most likely to work together and benefit from cooperation. Tourism, food processing and horticulture comprise three very important industries in support of overall economic development in Tanzania.
- Horticulture – employs over 300,000 people and touches most of population
- Food Processing – supports many food subsectors and is critical for food exports
- Tourism – comprises 30% of exports and between 10% - 15% of GDP
Strengthened value chains – Learning more about their own value chains (other suppliers, producers, processors, partners, distributors and exporters serving the local cluster) opens up avenues to work with new partners, improve quality, access new markets, reduce costs.
Joint purchases – Individual firms which purchase inputs and materials have little influence over suppliers. However, through cooperation and joint purchases they may reduce costs through greater leverage and volume pricing.
Combined outputs – Individual firms typically lack the economies of scale and volume to produce goods/services in the quantities needed by many buyers. Cooperating with others in the nearby cluster allows larger contracts and customers to be sought.
Strategic vision – Clusters of firms are much better equipped (than individuals) to develop and pursue a strategic vision, which benefits the entire cluster and raises their collective performance.
Attract support – Firms which cooperate are better able to tap into available support programs and mechanisms, including: training to improve productivity or management practices, assistance to adopt international quality standards and of course financing.
Policy reform – Cooperation also involves harnessing the power of numbers wherein a cluster of firms, with its greater economic and social weight, is able to more effectively articulate reform priorities then advocate using well constructed reform platforms.
