Clusters and the development of supplier networks for transnational companies

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Nov 12, 2013 (3 years and 8 months ago)

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12th General Conference of EADI,
Geneva, 24
-
28 June, 2008

Clusters and the development
of supplier networks for
transnational companies


Magdolna Sass, Institute of Economics
of HAS

Miklós Szanyi, Institute for World
Economics of HAS

12th General Conference of EADI,
Geneva, 24
-
28 June, 2008

Cluster concept


Aim: enhancing global competitiveness at
regional level


Core: cooperation on various corporate
functions (slaes, purchase, training, innovation
logistics, marketing…)


Tools: shared use of cluster services,


personal and informal contacts,


knowledge generation and distribution


size increase joint appearance


12th General Conference of EADI,
Geneva, 24
-
28 June, 2008

Cluster features


Regional concentration of activity


Sectoral focus (traded clusters)


Heterogenious structure of participants


Cooperation and competition


Innovation (knowledge generation and sharing)


Critical mass (size, financial independence)


Life cycle

12th General Conference of EADI,
Geneva, 24
-
28 June, 2008

Suppliers


Main form of relationship between companies
with foreign participation and local companies


One of the main channel for spillovers


Can be perceived as clusters

(lower level)


Base for deeper and closer cooperation between
companies


Relatively low level in Hungary

(a supplier
relationship with an affiliate has been

expected
to „restructure” or induce to restructure domestic
companies
,
raising their productivity,
competitiveness etc.)

12th General Conference of EADI,
Geneva, 24
-
28 June, 2008

Factors

influencing the share of
local supplies in total inputs

1.
Mode of FDI entry

2.
Sector

3.
Export
-
oriented versus domestic market oriented

4.
Gap (level of difference) between the „domestic” and
„foreign” sector

5.
Age of the investment

6.
Quality of (potential) local suppliers

7.
Nationality of the investor

8.
Global strategies of TNCs

9.
Affiliates’ role in global TNC network


Clusters from supplier networks?


Privatization vs. greenfield: not highly relevant (clustering is
new phenomenon)


Sectoral affiliation (traded clusters) most globalized (mobile)
industries


Participation most likely who paid attention to supplier
network development (until now little TNC involvement)


Unprepared local participants (lack of trust, short term
horizon)


Clustering is more complex and difficult issue


TNCs’ involvement over time: proof of benefits of clustering


Eminent role of social capital building, role of potent cluster
management

12th General Conference of EADI,
Geneva, 24
-
28 June, 2008