Cluster Development and Mapping in Georgia and in the EaP Countries

1. Cluster Development and Mapping in Georgia and in the EaP Countries Givi Kochoradze

2. Importance of Clusters in the World • At present the development of clusters and the process of clusterization itself is quite important issue in Europe and in the USA. • Two outstanding economists Michael Porter and Mark Kramer consider that the concept of shared values resets the boundaries of capitalism. By better connecting companies’ success with societal improvements will open up many ways to serve new needs, gain efficiency, create differentiation and expend markets. • If until now market was the dominant part of capitalism, for the future clusters should replace market from this position, becoming the most important component.

3. Several Types of Capitalism

4. Situation in EU Countries • According to the report made by EaP Plus project, it became clear that EU countries (especially France and Germany) pay major attention to the development of clusters in respective countries. For example, according to our information, French Government spent about 1.5 billion EUR during the last 10 years for the development of clusters in France and about 71 clusters were created; 102 in Germany. • For EU countries the development of clusters is important not only for the improvement of economic schemes, but also for the creation of additional working places, special measures for development of SMEs, for stimulation of innovation and ecological environment in EU countries, etc.

5. Clusters or Cluster Type Organizations in EaP Countries • The identified strengths are: • Political willingness to develop cluster policies in the next years; • Strong motivation and “bottom up” initiatives - there are some cluster type organizations, even if there is no cluster policy and legislation in some countries; • Although the policy framework for cluster development in most of EaP countries is not very much developed, there are other policies and programs that contribute to set the ground for cluster development and effective cluster policies in all six countries, for instance to encourage SME development, as well as academia-industry collaboration; • A number of initiatives have been identified already as being close to the cluster concept. Some of the initiatives, such as in the field of ICT or other technology sectors, are already internationally oriented.

6. Clusters in EaP Countries • The analysis has allowed to identify the following weaknesses that hamper cluster development in EaP: • Cluster policies are not yet fully developed in EaP – they are still in their early stages. There is a need to clearly identify the responsibilities in terms of cluster policy (for instance the Ministries and other Governmental structures) and to set up the frame for effective cluster policies. On the other hand, strategic documents and action plans were not followed by an effective implementation. • Similarly there is no cluster program to develop and support clusters in EaP, including public funding. • As a result, it is possible to state that cluster development is still inconsistent in EaP countries, ranging from a country to another.

7. Clusters in Georgia • After review of the situation in Georgia it became clear that the Ministry of Economy and Sustainable Development of Georgia is not stimulating or advertising clusters as a new economic system in Georgia. • For Georgian companies (and their associations) it is quite acceptable and comfortable to stay in the position of associations. For their transformation into clusters we need a lot of trainings, seminars, awareness raising, presentations, etc. • We should take into consideration that we in Georgia have no legislation concerning clusters and it’s possible to establish new organization only in the form of NGO or Ltd.

8. Some actions in Georgia • Starting work on clusters we (small team) established new Georgian organization “Georgian Cluster National Platform” (GCNP), which is clusters management organization in our country. We elaborated special plan according to which we started mapping of the existing clusters and associations, tried creation of new cluster in the country, were involved in discussions and debates with governmental and private structures for proving the advantages of clusters, etc. • After mapping of some clusters in Georgia we decided to create network of exiting clusters/associations under our organization GCNP and consequently established the mentioned network in which at present are united:

9. Some actions in Georgia • Health Cluster (on the bases of Tuberculosis Center); • Microbiology and Virology Cluster; • Information and Communication Technologies Cluster (ICT Business Council, Microsoft cluster, ICT Techno Park cluster); • Tourism Clusters (Georgian National Tourism Administration (GNTA), Georgian Tourism Association; • Wine Clusters (Georgian Wine Association (GWA), "Association Qvevri Wine", Wine Tourism Association, etc. • Agricultural and food production clusters (Georgian Hazelnut Growers Association (GHGA); • Education Cluster (Entrepreneurship educational Cluster); • Cultural Cluster (Creative Georgia); • Construction cluster (Cluster of infrastructure construction of modern technologies).

10. Other Opportunities of the Cooperation • We are making several steps/attempts to promote clusters in our country. For these purposes I presented information about clusters: on the ICT Information Day at the Ministry of E&S of Georgia, in May 2017; on the Eastern Partnership Civil Society Forum, on 22.07.17, etc.  • We started cooperation with representatives of Georgian organizations leading European projects in Georgia such as: G4G, EAST ENVEST 2, EU4BUSINESS and others, with National Georgian Foundation, Georgian Innovation and Technology Agency, UNIDO office in Georgia and Vienna, GIZ Foundation in Georgia, etc.  • We asked the Deputy Minister of Economy and Sustainable Development of Georgia to sign agreement with COSME program (like H2020 and EEN, which we already have).

11. Registration of Georgian Clusters on EU Cluster Observatory Map • One of the main obligations, which we have in our action plan is registration of Georgian clusters on the web site of European ECCP and EU Clusters observatory map. For these purposes we established contact with and invited to our country Dr. Gerd Meier zu Köcker ­- Founding Member of European Secretariat for Cluster Analysis (ESCA), who arrived to Tbilisi and we organized meeting together with representatives of some Georgian clusters. • Mr. Gerd Meier provided us with special forms and asked his assistant in Georgia to help us in filling in of the mentioned forms. According to the indicated activity we are now registering two Georgian clusters: Health Cluster and Tourism Cluster (Georgian Tourism Association) on the web portal of EU Clusters Observatory.

12. Internationalization of Georgian Clusters • We would also like to underline the importance of internationalization of Georgian clusters. • We made some practical steps in this direction. Particularly we are establishing contact with Balkan and Black Sea ICT Cluster Network and at present there is a process of our unification. • We applied to several European cluster management organizations and received positive responses from: The Polish Clusters Employers' Association (PCEA); Estonian Clusters; The Union of Slovak Clusters (UKS); Austrian Cluster Platform; Portugal clusters network; France IT Clusters;French Competitiveness and Business Clusters Association (AFPC); Romanian Cluster Association CLUSTERO; Association of Business Clusters Bulgaria; Cluster Excellence Denmark; National Cluster Association of the Czech Republic (NCA); others.

13. Summary • Making resume I would like to underline that I, together with my colleagues, implemented a number of activities (during the short period) for the development of clusters in Georgia, starting with the establishment of new cluster management organization GCNP, mapping of existing clusters, networking and establishment of EU contacts and internationalization of our cluster. Nevertheless, it is not enough and a lot of work remains to be done in future. • First of all, our society should understand the importance of clusters, smart specialization, foresight planning (which is new for our community). On the other hand, as Georgia made choice towards the European values (country is striving to the EU and European structures), the mentioned transformation will be done in any case. Our role is only to accelerate this important process of clusterisation and we believe to achieve this with the methodological assistance of our European colleagues. Important information: • Next year with the support of the EU funded EaP PLUS project we are organizing big international cluster event in Georgia (probably in May or June 2018). I will send invitations to you using contact information of Black Sea Horizon conference and hope to see you all in my country.

14. Thank you for your attention!

15. Contact Information Dr. Givi Kochoradze Director of ICARTI and GCNP Tel/FAX: 995 32 2362003 Mob. 995 599 292516 E- mail: gcp@ip.osgf.ge