We talked to Michael about one of his great passions, cluster competitiveness, and why this concept, paradoxically, is more important than ever in an increasingly connected world.
- What is the thing about cluster competitiveness? “Decades ago, Michael Porter developed what proved to be a cornerstone in management literature – his theories on competitive advantage. Later on, he turned towards the related concept of cluster competitiveness – the idea that the choice of location might be a source of competitive advantage, as indicated by the unusual competitive success of tech companies in Silicon Valley, Life Sciences companies in Southeast England, or film studios in Hollywood, to mention a few. Understanding why some regions flourish while others don’t, as well as how to develop strategies for leveraging cluster strengths thus become key to enhancing innovation, productivity and ultimately competitiveness at an industry, regional, and national level.”
- Why should clients care about location in a global economy? “Now, in theory, the importance of location should diminish as markets become increasingly connected, since capital, goods, people, information, etc. can be sourced from anywhere. In practice, however, superior competitiveness in a global economy is closely tied to access to location-specific things, e.g. knowledge, relationships, and capabilities, that distant competitors cannot match. This means that international networks are key to leveraging local strengths for global competitiveness. On top of that, you can add the volatility, uncertainty, and ambiguity of market dynamics and macroeconomic policies that global companies are facing today, which makes understanding the role of location as important as ever to strategic management.”
- How have you made an impact with this? “Most recently, I worked on an engagement where we helped the client identify the global forces that are changing the dynamics of the global Life Sciences industry. Being a highly R&D-intensive industry challenged by dwindling productivity, Life Sciences are at the edge of a paradigm shift – one that will make access to collaborative networks paramount to competitiveness. On this backdrop, we helped the client think strategically about how a broad range of players can shape Life Sciences clusters in the future. This was a cool project, which gave us the opportunity to leverage Monitor Deloitte’s strong legacy in competitiveness to make an impact that matters for the client.”