South-East Europe Programme Watermode Project

Romania: Study case on the transferability of the clustering experiences

Written by: NC MPA CONSTANTZA 2011

In Romania, the planned and autarchic economy before 1989 was leading towards a certain type of clusters, namely the former "industrial centres". The period after the Revolution was marked by a huge decrease of the industrial activity, by a relocation of resources and a repositioning of the economy. It is only after 2001, when the economical growth has finally started, that a discussion about industrial concentrations makes sense. A number of studies identified industrial concentrations similar to clusters in Romania. The first one was coordinated by the International Centre for Entrepreneurial Studies (CISA) in Bucharest in 1998. This research was commissioned by the World Banks Institute for Economical Development and it focused on the competitiveness of the Romanian entrepreneurs. The analysis identified the existence of three incipient cluster forms for software manufacturing, naval engineering and wood industry. Another major reference of the cluster research field in Romania is the analysis by Marco Riccardo FERRARI, research assistant of Economical Department of the University of Milano. The study was based on the Italian methodology of industrial districts identification. The survey identified also three "proto-districts", for the wood, textile and ceramics industry. A third relevant research study was developed by Valentin IONESCU, whose analysis was based on the previous studies. In his study, Valentin Ionescu observes the difference between applied methodological criteria by other studies and underlines the uncertainty of a cluster definition. The researcher agrees that there are no functional clusters in Romania, regardless of the definition used. Nevertheless, Valentin Ionescu gives evidence of the presence of the "proto-clusters" or "emergent clusters". The analysis questionnaire was applied only to two possible clusters, one in the ceramics industry (Alba) and the other one in the software industry (Bucharest). The fourth relevant source for the situation of the Romanian clusters is the VICLI project, developed within the European Program INTERREG II C - CADSES. The project began in 1999 and lasted until 2001 and tried to identify and to support the cluster development by means of regional know-how transfer. Romania was a partner country in the project and the Transnational Expert Group designated Harghita County as an eligible pilot area for the implementation of the project methodology. The VICLI final report for Romania identified four potential clusters that emerged in the Harghita County (Region Centre): wood processing, pottery, printing and equipment. A fifth important project of cluster studying in Romania was the INCLUD project, financed by Interreg III B CADSES Programme. The project run during 2003 2004 and its objective was the study of potential clusters in the partner states from Central and Eastern Europe as well as their support based on the Austrian and Italian experience. Thus, some potential clusters were identified in the textile sector (North-East Region, Bacau County and Region West, Timis County), software (Timis, Cluj and Bucharest), wood processing, steel components and metal products (Region Centre). Moreover, the Brasov County had concentrations of companies in the area of chemical industry, machinery and engines. Another reference for research in Romania was the WEID project, which investigated, through case studies, the relations between clusters, at European level. The project ran for three years, during September 2001 and end of 2004. The project gathered seven partners from Western Europe (Germany, Italy and Great Britain) and Central and Eastern Europe (Czech Republic, Poland, Slovenia and Romania). From a total of 15 case

studies, two referred to Romania and the existence of potential clusters in two areas Banat and Crisana - in the footwear industry and sportswear. The last, but not least, reference for the analysis of the potential cluster development in Romania is the CURAS Programme, which was financed within the Cooperation Agreement between the Romanian and the Flemish Governments. The project aimed at improving the quality level and the efficient use of SME resources in the automotive components sector. The result of the program would have been the implementation of an NGO as a first step towards the institutionalization of a functional cluster within the automotive sector, located near the Dacia-Renault plant, nearby Pitesti, Arges. Unfortunately, the results of these studies, as good as they might have been both form a scientific as well as from the point of view of the application methodology were not followed by a coherent supportive action on the side of the Romanian authorities and their conclusions barely withstand the 2011 actuality test. Some of the more recent initiatives aiming at developing innovative clusters in Romania, turned out to be more relevant and should thus be mentioned here as well: The FP6 Project "Romanian Days of Innovation", run between 2004 2005 having as an objective to develop innovative networks at national level in the fields of ICT and biotechnologies. The ICT network was later enhanced also by means of a national CEEX project "PROM IST PC7" (2006-2007). Another initiative, this time in support of the automotive suppliers, was the FP6 project "SPRINT" (2005-2007) which had as an objective the development of an innovative network of automotive suppliers in Romania. The novelty of this project consists in the interest conferred to the research-development activities by creating joint industrial research nuclei in regard to specific topics of research. Twelve such research nuclei have been identified, still working today. Concerning the wood and furniture industry we can mention the FP7 Project "Pro Wood" (2008-2010) and it aims at establishing an innovative cluster in the Region of Brasov Covasna (see box 1). Finally, in 2008 the Ministry of Economy launched a new campaign of identifying existing emerging clusters in Romania. One of the actions undertaken was a national project aiming at elaborating a handbook for cluster development (Innov Cluster). Compared to many other European Countries, Romania's tradition for general cooperative structures, for deliberate public-private cooperation and for industryuniversity collaboration suffers from the distortions of the socialist system. Cooperative activities particularly in a public-private context often lack trust. Consequently, the three natural partners of the "Triple helix" model hardly cooperate. It seems, there is gap between the world of those three actors, which is difficult to overcome. Voluntary cooperation thus is the exception. To this end, for the Romanian reality the triple helix way of thinking needs to be modified to a "Four clover" model, where the fourth actor is being represented by catalyst institutions: service providers in the field of innovation and technological transfer, centres for technological transfers, chambers of commerce etc. Amongst these we can further differentiate between specialised service providers (experts in the industrial field of the clusters) and generalist consultants dealing with management, communication, project

generation etc. It is obvious that the actors within this model have different contributions and interests, which have to be harmonised. After 1989, the Romanian State tried to encourage territorial economic concetrations throughout public policies. More instruments were used as a part of the regional and industrial policy in order to create or facilitate what we so call public clusters. Among these we may mention the following instruments: 1. industrial parks 2. scientific and technological parks 3. free zones 4. deprived areas 5. industrial reconstructing areas with potential for economic growth 6. assisted areas 7. business incubators. One of the tools designed to promote economic competitivity by getting more companies into one location was the establishment of business and technological incubators . At national level, the National Agency for SMEs and Cooperatives (NASMEC) has initiated a programme for creation and development of technological and business incubators. The main purpose of the programme is to stimulate the innovative business development initiatives, SME development and creating new jobs. Although there are no specific regulations that cover the creation and existence of incubators, in Romania there were registered 19 incubators at the end of 2003. Indicators of bussines incubators, on regions: Region Number of functional Number of incubators incubated companies North East 3 118 South East 2 65 South 2 37 South West 5 56 West 0 Nord West 1 64 Centre 4 19 Bucharest 2 41
Source: NASMEC, 2004

Number of employees
270

603 80 266 200 255 228

Overall, an assessment of public cluster (industrial, scientific and technological parks, etc) tends to suggest that the structures are artificial, although supported by specific regulations and few of them are actually operative. There is no evidence of connection or synergy between the companies acting in these structures. In the context in which competitivity is the main objective of both industrial policy and regional policy, it is expected and suggested that the public authorities take

into consideration the alternative of (re)allocating the funds to natural clusters, rather than to insist on spending money on public parks, most often for social and not economic reasons. Many difficulties have an effect on the clusters, or directly affect them , Romanian economy still faces a set of problems that can be addressed more easily outside the cluster , but whose solution would have a remarkably positive impact on the functioning mechanism of clusters (potential). The short list below details the major concerns of the business community: 1. Legal system and legal instability The courts are inefficient and the enforcement of the contractual obligations is long lasting.The frequent modifications of the legislative framework involving long term planning inefficiency. 2. Infrastructure While the urban and the intraurban has improved, there is still a big difference between urban and rural areas in terms of adequate roads and access to public services. 3. Absence of information related to environmental and quality standards They feared the future implementation of the communitary aquis will increase considerably costs of the companies. 4. Bureaucracy The entrepreneurs complain of bureaucracy and corresponding costs incidence(both financial and time spent by managers). 5. Excessive levels of taxation Although it is somewhat natural that entrepreneurs always criticize duties, however it seems that the burden of taxation in general and especially social insurance has been an obstacle.

The Cluster Mapping Report was elaborated in the frame of a bi-lateral cooperation agreement between the German Government (represented by the GTZ) and the Romanian Ministry of Economy (ME). The GTZ was asked in 2009 to support the Romanian Government in drafting a comprehensive cluster policy strategy including a mapping of existing clusters in the country. The actual consultancy work was carried out by two consultancy firms: ZENIT GmbH, Germany, and Inno Consult, Romania between June 2009 and January 2010. In total, eight regional peer workshops were organised in order to identify clusters and potential clusters in the development regions in Romania. According to the Cluster Mapping Report results (February 2010), a total number of 55 clusters were identified; i.e. seven clusters per region:

Identified Regional Clusters: Region Bucharest Ilfov Workshop Location Bucharest Identified clusters
Furniture ICT Clothes, shoes and fashion Audiovisual services Construction materials Food industry Logistics Publishing Automotive ICT Construction & Material Printing Tourism Agro Food Machinery Production Textile Wine Automotive Sibiu Automotive Brasov Pharmaceutical Industry Pottery ICT Electro Technology Medical Services Geo Thermal Energy Bio Products Bio Nutrients and Cosmetics Bio Fuels Clothes and Footwear Bio Medicine Tourism Agro Food Wine Pharmacy ICT Wood Automotive ICT Energy Tourism Chemical Industry and Biotechnology Agriculture Automotive Agriculture Petro Chemical Industry Bio Fuels Tourism Glass Industry Electro Technical Industry Metallurgy ICT Agro Food Tourism Ship Building Alternative Energy

West

Timisoara

Centre

Sibiu

North West

Cluj

North East

Piatra Neamt

South West

Craiova

South

Calarasi

South East

Braila

Overview of Mapping Results: Workshop Location Region Number of Clusters identified Average Average labour force number of assessment cooperation projects 11,10 12,75 12,50 11,30 10,30 10,60 10,90 10,80 90,25 11,28 1,0 1,0 1,0 5,5 1,4 2,1 1,5 1,2 14,7 1,84 Average number of Third party service providers 2,25 2,50 1,20 2,50 1,25 3,80 2,75 1,80 18,05 2,26

Bucharest

Bucharest Ilfov Timisoara West Sibiu Centre Cluj North West Piatra Neamt North East Craiova South West Calarasi South Braila South East Total Average

8,0 8,0 5,0 7,0 8,0 6,0 8,0 5,0 55,0 6,9

Out of the 55 clusters identified, only 22 passed the criteria of actual cooperation and availability/usage of innovation services. In the eight regions there have been recognised between two and four clusters.

Region Bucharest Ilfov

Workshop Location Bucharest

Identified clusters
Clothes, shoes and fashion Construction materials Food industry Publishing Automotive ICT Wood Wine Pottery Geo Thermal Energy Tourism Agro Food Automotive Tourism Agriculture Automotive Agriculture Tourism Electro Technical Industry Logistics Tourism Ship Building

West Centre North West North East South West South

Timisoara Sibiu Cluj Piatra Neamt Craiova Calarasi

South East

Braila

Map of Romanian clusters:

According to the Ministry of Economy, Commerce and Bussines, General Directorate of Industrial Policy and Competitiveness ( november 2010), in Romania there are 17 clusters in different industry sectors and by the end of 2010 another 8 clusters were to be created in the following fields of activity: aviation, renewable energies, ship building, logistics, automotive and furniture.

No. Cluster name

Sector

Website

Town Timisoara Timisoara Pitesti

1. AUTOMOTIVEST Automotive www.adrvest.ro Regional cluster 2 ICT Regional ICT www.aries-tm.ro Cluster 3 Dacia Renault Automotive www.acarom.ro Cluster

PRO WOOD Regional Wood Cluster Green energy cluster TURINN Cluster

Silviculture www.kofa.ro and Wood www.prowood.ro industry Renewable www.greenenergy.org.ro energies Sustainable www.aptmh.tk and innovative tourism Agro-food www.expoarad.eu

SfantuGheorghe Sfantu-Gheorghe

Drobeta Turnu Severin

7. Agro-Food Regional Cluster www.electroprecizia.ro 8 Electro-technical ElectroRegional Cluster technics ETREC www.astricone.eu 9. ASTRICO Textiles Textiles Cluster 10 Furniture Cluster Furniture www.mobex.ro 11 Agro-Food Cluster Agro-food www.inma.ro/pactmar/ Bucharest 12 Tourism Regional Tourism www.bucovinaturism.ro Cluster 13 Fashion Clothes TCF sectors www.fepaius.ro Cluster 14 Agro-food Cluster Agro-food www.icc.ro 15 ICT Regional ICT www.ipacv.ro Competitiveness Pole 16 Tourism South East Tourism www.asociatia-litoral.ro 17 Geothermal Energy Geothermal www.nord-vest.ro Cluster energy

Arad Sacele-Brasov

Savinesti Tg.Mures Bucharest Suceava Bucharest Iasi Craiova

Constantza, Mamaia Cluj Napoca