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What role is the Virtual What role is the VirtualCluster Initiative playing Cluster Initiative playingin enhancing these in enhancing theseconditions of conditions ofCompetitiveness? Competitiveness? Factor Input Demand conditions1. Wide availability of 1. We are enhancing the Information – an business environment whichinfrastructure that is supports and encouragescentralized, allows quicker competitionaccess to the information Related and supporting2. By participating in a industriesvirtual environment andleveraging negative 1. With the upload of theinfluential factors in the majority of the companiessupply chain it is possible to in a given area competitorsacquire the required and suppliers are easilyresources at a more accessiblecompetitive price 2. We are artificially creating a cluster Context for Firm Strategy and Rivalry environment. 1. Open and vigorous local competition – located on a centralized platform the ability to compete regionally, nationally and international is given. This allows companies to broaden their customer base. The amount of new customers or request for quotation could be one metric of KPI. 2
What role is the Virtual What role is the VirtualCluster Initiative playing Cluster Initiative playingin enhancing these in enhancing theseconditions of conditions ofCompetitiveness? Competitiveness? Factor Driven Economy Innovation Driven Economy1. For the location of business, company and university research 1. With the use of VOIP activities, and of manufacturing, collaboration globally and distribution, and marketing the open innovation is much dependency to physical place is easier reduced via increasingly cheaper ICT. Researches work together over the Internet, regardless of 2. Since these strategies are where they are. For companies, global then they should be each activity may take place in a globally positioned different location: R&D, design, raw material sourcing, manufacturing, assembly, distribution, and marketing.2. By increasing the visibility of the Value Chain within an organization and reducing the physical dependency of Place we increase the roles What role is the Virtual Cluster Initiative playing in enhancing these that companies have in their own value chains. conditions of Competitiveness?3. This allows them to be more competitive in price. Investment Driven Economy4. When the economy that you 1. By efficiently implementing human resources by taking advantage of cross-border compete in is on a down turn collaboration and reducing input cost competitive pricing is possible the opportunity to explore new channels are easily 2. Clusters do research on products which in the end need to be marketed. Having this visible given. in the development phase attracts investors and allows a quicker time to market 3
What role is the Virtual What role is the VirtualCluster Initiative playing Cluster Initiative playingin enhancing these in enhancing theseconditions of conditions ofCompetitiveness? Competitiveness? Factor Driven Economy Innovation Driven Input Cost Economy Unique Value 1. By creating a mega- cluster the critical mass is even greater leveraging negative influential factors in the supply chain it is possible to acquire the required resources at a more competitive price 2. What role is the Virtual Cluster Initiative playing in enhancing these conditions of Competitiveness? Investment Driven Economy Efficiency 1. The VCI is using the strength of numbers by centralizing as many companies as possible creating critical mass 2. Where the local competition is high, broaden the customer base 4
What role is the VirtualCluster Initiative playing inenhancing these conditions ofCompetitiveness? Enhancing the composition of Regional EconomiesWhere a negative composition ofregional characteristics like highwages, dependency on a fewcompanies, lack of qualifiedpersonnel, we attempt throughcross-border collaboration toeliminate these deficiencies. 5
Where the Virtual Cluster Initiative can make a difference? 8X 6
What role is the VirtualCluster Initiativeplaying in enhancingthese conditions ofCompetitiveness?With one ProjectManager in astrategically locatedcountries around theworld,Selling What role is the VirtualLocating and Cluster Initiative playingcoordinating activities in enhancing theseare ensured for conditions ofparticipants. Creating Competitiveness?real value It is setting the framework around the world for SMEsOnce the critical mass is to easily access newreached Purchasing co Markets. For eachoperations will be Exhibition one Projectformed. Creating real Manager is appointed as avalue direct contact for that country. They are responsible for assisting participants in entering that market. Creating real value 8
What role is the Virtual What role is the VirtualCluster Initiative playing in Cluster Initiative playing inenhancing these conditions of enhancing these conditions ofCompetitiveness? Competitiveness?We are setting the framework The geographicalto leverage activities in the Influences on Competitivenessvalue chain across borders are eliminated The dependency to physical place is reducedFor the location of business,company and universityresearch activities, and ofmanufacturing, distribution, andmarketing the dependency tophysical place is reduced viaincreasingly cheaper ICT.Researches work together overthe Internet, regardless of wherethey are. For companies, eachactivity may take place in adifferent location: R&D, design,raw material sourcing,manufacturing, assembly,distribution, and marketing. 9
What role is the VirtualCluster Initiative playing inenhancing these conditions ofCompetitiveness?We are setting the frameworkto leverage activities in thevalue chain across bordersFor the location of business,company and universityresearch activities, and ofmanufacturing, distribution, andmarketing the dependency tophysical place is reduced viaincreasingly cheaper ICT.Researches work together overthe Internet, regardless of wherethey are. For companies, eachactivity may take place in adifferent location: R&D,design, raw material sourcing,manufacturing, assembly,distribution, and marketing. 10
What role is the Virtual Cluster Clusters and Competitiveness Initiative playing in enhancing these conditions of Competitiveness? Clusters Increase Productivity Efficient access to specialized inputs, services, employees, information, institutions, and public goods(e.g. training programs) Ease of coordination and transactions across firms Rapid diffusion of best practices Ongoing, visible performance comparisons and strong incentives to improve vs. local rivals Clusters Stimulate and Enable Innovations Enhanced ability to perceive innovation opportunities Presence of multiple entities involved in specialized knowledge creation Ease of experimentation given locally available resources Clusters Facilitate Commercialization and New Business Formation Opportunities for new companies and new lines of established business are more apparent Commercializing new products and starting new companies is easier because of available skills, suppliers, financing, etc. Clusters reflect the fundamental influence in competition of linkages and spill-overs across firms and associated institutions 11
What role is the Virtual Cluster Initiative playing in enhancing these Sources of Prosperity conditions of Competitiveness? The Virtual Cluster InitiativeProsperity is constrained by the limited amount of resources available allows companies to leverage these constraints.Prosperity is derived from creating valuable products and services The Virtual Cluster Initiative is considered to be a valuable product and service. ProperlyCreating the conditions for productivity and innovation is the central used it is innovative andpolicy challenge for government capable of leveraging segments in the supply chain.Companies are the central actors in the economy It is questionable if the government needs to create theGovernments role is to create the enabling conditions to foster private conditions to foster private sector development or if wesector development can influence or leverage the conditions using the power of numbers. 12
Downes Three new drivers Larry Downes, co-author of "Unleashing the Killer App: Digital Strategies for Market Dominance" is in his celebrated article "Beyond Porter" believes that these assumptions are no longer valid. Downes identified three new drivers that require an entirely new strategic approach: digitization, globalization and deregulation. Digitization: With increasing efficiency of information technology all market participants have equal access to more comprehensive information. On this basis, in addition to entirely new business models are designed to change by even non-industry players, the basis of competition in the old economy sustainable. Downes leads to, for example, that the creation of virtual shopping malls, e.g. by telecommunications or credit card company, from a traditional competitive analysis by Porter and its focus on existing industry structures cannot be detected. Globalization, technological progress in the field of logistics / distribution and communication today allows almost any company to purchase on a global level, to sell and to collaborate with partners. Equally true that consumers have the opportunity to buy, to make global price comparisons and affordable products. This must also formerly regionally oriented midsize companies classified in a global environment, evenif they themselves do not export or import. That summary is Downes added that the globalized and networked market activity is also changing demands on the strategic direction of the company. It no longer suffices to position themselves according to Porter as price or quality leaders (Generic Strategies) but rather a competitive edge and stable market positions are now out of the ability to bind to become mobile customers and make far-reaching networks of partners for mutual benefit and to manage Deregulation: In the past decade in particular documents the U.S. and Europe many industries including aerospace, telecommunications,energy and finance a reduction of the influence of government regulation. This and promoted by the new possibilities of information technologyin these sectors have traditional and new companies whose activities again. This development led to a far-reaching restructuring of traditional business through outsourcing, rejection and receiving operations, reorganization of business relationships and alliances, etc. Downes concludes that the main difference between strategies in Porterschen sense and in the climate of the new drivers of the world is in the assessment of the role of information technology. In the old economy, technology was seen primarily as a tool for the implementation of strategies and changes. Today, however, the technology itself is the major driving force for change. 14
Out of the box thinking is a metaphor that means to think differently, unconventionally, or from a new perspective.Virtual Cluster InitiativeFor the location of business, company and university research activities, and of manufacturing, distribution, and marketing the dependency to physical placeis reduced via increasingly cheaper ICT. Researches work together over the Internet, regardless of where they are. For companies, each activity may takeplace in a different location: R&D, design, raw material sourcing, manufacturing, assembly, distribution, and marketing.The idea of a park or incubator as a "real estate" enterprise should give way to that of a "knowledge-based" enterprise. There is no fully virtualized firmand no fully digitalized industry. Even the most advanced information industries, such as finance, are installed only partly in electronic space.On the other hand local linkages and face-to-face interactions have been always seen as vital components for the creation and development of a businessenvironment. It can be assumed that virtual linkages cannot be seen as substitutes for person-to-person contacts, which will continue to have a crucial role.But the two processes, the personal contact and the virtual connection, can complement each other. 15
Networked coordination is becoming increasingly dominant in informational global economy today. We cannot deny the reinforcing effects ofVirtual Cluster Initiativeon existing industrial complexes. Actually there are few projects in the general area of virtual Virtual Cluster Initiative development such as VirtualScience Park (led by University of Leeds). There are some benefits of networking for all branches of industrial firms, universities, research institutions andas well as governments: Small firms and start-ups may provide great benefits, because they generally have limited access to technology networks and to international events such as trade fairs; in less developed regions, they tend to feel isolated. For regional development agencies, networking would be extremely useful to lessen regional deficiencies, to improve focus and to reduce duplication of efforts. Universities and research centers also benefit greatly. Usually, they already have a high level of interaction with similar organizations, but their linkages with the private sector tend to be limited, and are often concentrated on large firms and state-owned enterprises. For large firms, the benefits would be smaller, because they tend to have well-developed internal network systems, and also linkages with their suppliers. In a cluster, they tend to be more self-contained than the other agents, with fewer ties with local firms and research institutions.Governments would benefit from increased efficiency, reduced duplication, and optimization of infrastructure. A Virtual Cluster Initiative could be a toolto encourage development and overcome isolation in certain regions. Discussions have indicated three points of struggle: to survive in global competition, to enhance knowledge and therefore create innovative milieu,and to use physical and human resources efficiently. “…most of the world’s actual high-technology production and innovation still comes from areas that are not usually heralded as innovativemilieu, and indeed may have few of their physical features: the great metropolitan areas of the industrialized world.”Findings on the rise existing metropolitan centers as command points for the new global economy I can say that whether real or virtual industrial activitiesare still need the services and facilities (trained human resources, face-to-face interaction in close proximity, intellectual and social services and as well asphysical infrastructure etc.) that existing major cities offered. We should know that today there is no single type of industrial production and workplace and all production types and production sites are becomingmore complement each other. The common denominator among all economic activities is globalization and strong believes in technology. Technoparks arepresented to most industrializing nations, including Turkey, as the magic formula of industrial production and progress. Developing countries, therefore,should determine the priorities of their strategic investment decisions; technopoles is the only one among others. 16