1. THE BASQUE CLUSTER POLICY AND AERONAUTICS Dr. James R. Wilson (Basque Institute of Competitiveness and University of Deusto, Spain) EMAIL: jwilson@orkestra.deusto.esjwilson@orkestra.deusto.es

2. THE BASQUE COUNTRY Population of approx 2 million Contributes 6% of Spanish GDP High weight of manufacturing (30% of GDP) Strong GDP growth in last 20 years GDP per capita higher than EU average: €30.599 in 2007

3. www.acede.eswww.acede.es (Cluster de Electrodomésticos) www.acicae.eswww.acicae.es (Cluster de la industria de automoción) www.aclima.netwww.aclima.net (Cluster de Medioambiente) www.adimde.eswww.adimde.es (Cluster de las Industrias del Mar) www.afm.eswww.afm.es (Cluster de Fabricantes de Máquina Herramienta) www.clusternergia.comwww.clusternergia.com (Cluster de Energía) www.clusterpapel.comwww.clusterpapel.com (Cluster del Papel) www.eikencluster.comwww.eikencluster.com (Cluster Audiovisual) www.gaia.eswww.gaia.es (Cluster de Telecomunicaciones) www.hegan.comwww.hegan.com (Cluster de Aeronáutica) www.uniportbilbao.eswww.uniportbilbao.es (Cluster del Puerto de Bilbao) www.clustertil.eswww.clustertil.es (Cluster de transportes y logística) ASOCIACIONES CLUSTERS EN EL CAPV

4. HEGAN Development of a nascent Basque aerospace sector from 1960s – 1960s: SENER (engineering) became involved in space projects – 1980s: Development of ITP (engines) and GAMESA (aeronautics structures) – 1990s: Major collaborative projects with ROLLS ROYCE and EMBRAER Birth of HEGAN – Early 1990s: Study under Basque Government Competitiveness Programme – From 1993: Informal collaboration between GAMESA AERONAUTICA, ITP, SENER, INASMET (technology centres) and the UPV Engineering School – 1997: HEGAN formally founded with 3 leading companies and 12 suppliers HEGAN Today – 35 Members (32 firms and 3 Research/Technology Centres) – Strong diversification in products and clients: Customer base includes Airbus, Boeing, Bombardier, EADS, Embraer, Eurocopter, GE and Rolls-Royce

5. Source: HEGAN (2008), Report 1997-2007

6. ROLE OF HEGAN Aeronautics is a research-driven, investment intensive industry – Basque firms do not have the capacity to control the market – Co-operation between local firms and as risk-sharing partners with leading international firms is vital HEGAN has worked to respond to strategic challenges through facilitating cooperation – Aeronautics Technologies Specialisation Course (Bilbao Engineering School and the Aeronautics Engineers School in Madrid) – Quality committee and development of own quality standard: HEGAN 9000 – Environmental Agreement with the Basque Government Corresponded with a time of success for the sector: – Today turnover of almost €1000m and employment of around 7000 – More than 3-fold increase since 1997

7. BIRTH OF BASQUE CLUSTER POLICY At the beginning of the 1990s, the Basque Country was losing its traditional competitive advantages – The Basque Government contracted Monitor to analyse future competitiveness – This study defined a number of ‘clusters’ The Basque Government established a competitiveness programme supporting workgroups in 9 priority clusters – These defined improvement priority areas and action proposals in each case This dynamic process of interaction among various agents enabled the detection of gaps in the Basque economy Process leading ultimately to the creation of new institutions under the framework of a defined cluster policy

8. POLICY SUPPORT FOR CLUSTER ASSOCIATIONS Initial collaboration agreements signed with 11 cluster associations (1995-1999) Cluster policy mission: the improvement of competitiveness responding to strategic challenges through cooperation Associations are required to undertake a strategic plan every 3-4 years and annual action plans Government representatives attend association meetings, but in non-voting capacity Cooperation groups To capture and diffuse strategic information To identify synergies To put in order and evaluate synergies

9. BASQUE GOVERNMENT RELATIONSHIP Cl.1Cl.2Cl.3Cl.4Cl.11 Internationalisation Quality Horizontal technicians Vertical technicians General Assembly Management Board Specific Committees Finance: Public and private funds (50-60% Basque Government, up to €240.000 per cluster association)

10. EVALUATING BASQUE CLUSTER POLICY Some International Good Practice 1.Identification: Clusters cannot be created from nothing. 2.Design: Clusters should stimulate cooperation (with private sector leadership), with an aim of improving competitiveness. 3.Implementation: Policy should improve community measures to create relationships, projects, etc., and should enable the integration of different policies. 4.Evaluation: Policies should be evaluated, despite difficulties. Basque Country Case 1.MONITOR study and significant dialogue to adjust to regional priorities. 2.Mission centred on co-operation, but mix of strategic and non-strategic projects. Leadership transferred quickly from to private sector. 3.Clusters associations organize meetings and forums to create community spirit and relationships. Basque Government cluster relationship facilitates some policy integration. 4.The system supposes a degree of auto evaluation of intermediate activities, but difficulties in evaluating impact.