Improving Factor Conditions

The Case of Manisa Electrical and Electronic Appliances Cluster

Important Notice

Launched in March 2007, “Development of a National Clustering Policy” is an EU-funded technical assistance project (the Project, hereinafter) that seeks to contribute to elaboration of a national clustering policy, through development of a “whitepaper” on clustering. The Project is being implemented by the Undersecretariat for Foreign Trade (UFT) with the technical assistance of an international consortium, contracted by Central Finance and Contracts (CFCU).

The methodology, deployed for the development of this and other Roadmaps reflects the key priorities of the DCP Project. Therefore, it, on the one hand aims at developing a roadmap that demonstrates how the cluster can be more competitive, and on the other, serves the key purpose of informing the process of cluster policy-making and development of policy-level and institutional recommendations. The Roadmap for Manisa Electrical and Electronic Appliances Cluster has been developed with direct involvement of a broad range of stakeholders: enterprises, governmental and non-governmental organisations, academic and research organisations, and other relevant cluster actors. Key findings from field studies and roadmap development process as reflected in the executive summary of the final report, describing Manisa Electrical and Electronic Appliances Cluster is presented below...

Manisa Electrical and Electronic Appliances Cluster

The Manisa EEA Cluster has expanded rapidly in the last 15 years, and has attracted a critical mass of companies and foreign direct investments. The geographical proximity to Izmir and the superior industrial infrastructure were among the reasons for Cluster’s rapid expansion. The expanding transport infrastructure will further improve the competitiveness of the Cluster. Being close to Izmir also makes it possible to Cluster companies to attract advanced human resources to the Cluster. However the Cluster companies still report difficulties in accessing qualified white- and blue-collar workforce. As such, it would be safe to ague that the Cluster is endowed with favourable factor conditions, with still some room for improvement in knowledge infrastructure.

In terms of firm strategy and rivalry, on the other hand, it was particularly difficult to develop a conclusive judgement. The Cluster certainly enjoys some advantages as a result of being home to global players, which value R&D and innovation. However it would be hard to argue that OEMs’ dedication to R&D and innovation has diffused to the Cluster. Most of the suppliers have not embraced R&D and innovation, due to the reasons detailed in this report.

The related and supporting industries are strong and considered competitive. However Cluster companies reported that Cluster would benefit from entities providing services in design, innovation, technology transfer etc. The absence of financial intermediaries that offer specialised services for this particular industry has also been cited as a weakness by the Cluster companies.

Although the main focus of the Cluster companies (especially the OEMs) is on export markets, home demand is still considered important. Turkey’s young and growing population, changing social habits, relatively fast take up of new technologies are among the factors that make the home demand important for the Cluster.

Unfortunately; the field studies and the working group meetings in this particular Cluster have been affected by the lack of “civic” ownership, which has been sometimes a serious debate in other clusters, on which the DCP Project worked. The OIZ Management and the Chamber of Commerce and Industry were distracted. This situation is also an indication of the Cluster’s ability to leverage on the institutions for collaboration. This said, it should be noted that Manisa OIZ is one of the most active and “wealthy” OIZs in Turkey. As indicated before, lack of effective working relations between the academia and the business community is a frequently observed problem in Turkey; however the situation in Manisa is extreme and needs to be ratified as soon as possible.

The vision of the Manisa EEA Cluster is to “become one of the world’s largest producers of premium high value-added household appliances, known for its world-class research and innovation environment.”

The Cluster actors recognise the importance of attracting higher portions of the R&D activities of the presently existing multinational OEMs (i.e. Indesit and Vestel) to the Cluster. Furthermore it is also important to attract other multinationals as well, which would also eventually move much of their R&D to the region. Thirdly, to create and sustain competitive advantage, the Manisa EEA Cluster should have a critical mass of innovative SMEs among suppliers and supporting industries. Accordingly, the strategy of the Cluster Initiative should be “to create a favourable environment in Manisa for attraction of R&D functions and specialised services from advanced regions to the Cluster with the goal to create for its members a competitive advantage in the global value chain.”

Implementation of this strategy requires (a) strong cluster leadership; (b) creation and expansion of applied R&D in the Cluster; (c) a diversified portfolio of cluster members with specialized services; (d) an environment that supports and encourages entrepreneurship and enterprise development; (e) differentiation through environmental policies; and (f) world-class logistics and transportation infrastructure (i.e. the Key Success Factors).

The Roadmap for the Manisa EEA Cluster is composed six cluster actions, each of which correspond to the above-mentioned six key success factors, and each complement one another, all focusing on the main goal of bringing more R&D to the region.