THE COMPETITIVE ADVANTAGE OF MARITIME CLUSTERS

Peter J. StavroulakisPhD Student, Department of Maritime Studies, University of Piraeus

Stratos PapadimitriouProfessor, Department of Maritime Studies, University of Piraeus

Yannis KoliousisPhD Student, Department of Maritime Studies, University of Piraeus

5th International Symposium on Ship Operations, Management and Economics 28-29 May 2015, Eugenides Foundation

Introduction

Mapping of factors that formulate competitive advantage within maritime clusters1. Clusters directly influence policy through their

weight upon the economic cycle2. Interesting construct for strategic management

topics

Methodology• Literature review• Critical analysis

Bi-fold situation today

Instruments and empirical benchmarks from a range of:

1. process applications2. dynamics3. mathematical modeling4. strategic management5. management6. policy drafting 7. cultural characteristics

But clusters have proven elusive for reasons of natural compliance

Compliance to Natural Paradox

Natural compliance with exact reference to:1. natural circumstances 2. natural governing parameters

In nature we find instances of clusters or indeed of manifestations of abundance through one too many paradoxes

All clusters have one very mesmerizing thing in common

Whether we are referring to natural clusters of insects, or industrial trans-national clusters, there are governing paradoxes in the brew

Scarcity within Clusters

Through the ever-constraining scarcity principle we witness the paradoxical abundant if not saturated presence of entities that are there for the kill

Paradoxically said principle makes them all healthier, more dynamic and stronger, simultaneously

But within systems on the ‘edge of chaos’ (Macintosh et alli, 2007) there is wisdom

Cluster Theory Origin

Though von Thünen’s (1826) work Der isolierte Staat has been given credit (Andersson et alli, 2004)

Alfred Marshall (1890/1920) is widely accepted as the forefather of industrial cluster theory:1. better access to skilled labor2. specialized suppliers3. knowledge spillovers

In addition to physical conditions they are considered as the drivers of industrial clusters’ competitiveness

Could Marshall Signify More?

‘Creating new wants’: network that facilitates the constant germination of new ideas

What today we coin as the ‘system of innovation’ ‘Character of people’ and to the institutions that

formulate the cultural milieu Stochastic paradox “are as it were in the air...”

mention referring to trade skill-set acquisition deriving from localization

Wealth of Nations, 1776

Adam Smith’s ‘invisible hand’ has come to be a distinct economics’ benchmark

Could his ‘domestic industry’ be a component of a clustered industry?

Reconciliation of individual interest with collective prosperity (a central cluster paradox as well)

The good of the part is directly linked to the good of the whole, even if the whole is responsible for the framework of adversaries and finite resources that situates the part

Michael Porter’s The Competitive Advantage of Nations (1990)

The ‘diamond model’ is widely accepted and utilized today

‘Location paradox’ that is present whence globalization can co-exist with locational complementarities

“Paradoxically, the most enduring competitive advantages in a global economy seem to be local”

Competition that drives cooperation and vice versa

Industrial Cluster Dimensions

Knowledge Management (Pinch et alli, 2003; Carpinetti, 2012; Lai et alli, 2014)

Industrial clusters do facilitate knowledge creation that in turn drives innovation

Jing (2011) extracts six factors upon which the competitive advantage of a maritime cluster is founded:

1. external scale and scope economy2. regional resources3. government function4. reduction of transaction costs5. effect of learning and innovation6. coordination mechanism of the cluster

Innovation

Lin and Sun (2010): correlation of competitive advantage along with industrial cluster manifestation and the importance of

1. ‘innovation culture’2. ‘self-reinforcing’ factors3. ‘factor conditions’

Internationalization can be inversely correlated with culture as a driving force

This could be perceived as an instance of Porter’s ‘location paradox’

Culture

Akoorie and Ding (2009) study the culture of 1. entrepreneurship 2. networks3. government support

Culture and innovation are interconnected Kuo (2013) analyzes the dimensions of

1. market orientation 2. performance3. commitment

Importance of human factor’s commitment to organizational culture

Substantiated Observation

All dimensions are discrete but at the same time interconnected

Industrial clusters are a function of: 1. innovation2. culture3. trust and communication4. competition/cooperation5. oversight6. linkages and/to physical conditions7. intrinsic paradox

Factors that interlock to lead to cluster opulence

Maritime Clusters

Zhang and Lam (2013) provide a ‘predator-prey’ model; their correlation of maritime clusters with a natural systems’ model

Jin and Zhen (2013) similarly investigate maritime cluster dynamics utilizing ecological models to extract and compare competitive advantages

It seems that clusters of any kind find themselves composed of nature, or at least centrally infused with natural elements and functions

Maritime Policy and Innovation Othman et alli (2011) provide an overview of

competitive advantage and its implications with regard to policy

Oversight is an important aspect of the health of a maritime cluster

Pinto and De Andrade (2013) study maritime clusters’ innovation drivers to return the notion that maritime clusters have similar innovation capability

The competitive advantage within industrial clusters could lead to the formulation of different typologies of the innovation system

Maritime Competitiveness and Culture

Laaksonen and Mäkinen (2013) reference the holistic environment that the clusters’ health is dependent upon

Conflicting stakes all materializing within a cluster perspective as a symbiotic manifestation

Doloreux and Shearmur (2009) stress the importance of a culture of entrepreneurship and collaboration that will serve as a base of effective cluster policy

Pattern (differences that seem to share common values) guiding cluster dynamics

Maritime Clusters’ Corollaries

The factors formulating competitive advantage within a maritime cluster are of the same stock as generic industrial clusters

Provide more insight as to the horizontal differences of different cluster formations

Maritime clusters seem to be yet another instance of industrial clusters that includes a streamlined dynamic crystallization of competitive advantage

Paradox Revisited

It’s within paradox that competitive advantages reside and flower

The days of the survival of the fittest have long come to pass

The not so fit have managed to survive through adaptation and the creation of new needs, markets and values

Cluster theory may hold the potential to transform firms, industries, nations and above all, people through mutual benefit and competitive symbiosis

Nature’s Paradigm

Evolution is nature’s intrinsic application of innovation, for innovation and evolution share the same vision:

Convenient survival through contesting the old and adapting to perpetual change

Culture provides the fuel for innovation Within the intricate network of the cluster’s entities:

1. trust2. knowledge sharing3. diverse modes of population interaction 4. complementary and constructive oversight

Clusters’ Essentials

The manifestation of a culture of mutualism Fertile operations through the acceptance of

the operations of the environment The cluster’s competitive advantage is the

necessity that environmental components choose their destiny for themselves

Our stake is not at what they choose, but in the fact that they are there to make an unbiased choice in the first place

Clusters’ Caveats

In no way provides a deterministic stylobate for success

There are no absolute certainties for any members of a cluster, or the cluster itself

Intrinsic danger of hinting to universal applicability whence viability is nothing but local

Attempts to duplicate location-specific competitive advantage may face catastrophic failure

Conclusions

Literature though abundant has plenty of future qualitative and quantitative potential

The competitive advantage of the firms that are active within an industrial cluster setting1. generation of new knowledge, that exactly because of

a 2. culture that fosters prosperity of ideas and mutualism

(culture does remind us of a catalyst’s features), leads to distinctive blossoming of

3. parallel innovation

Limitations and Future Directions Conclusions, extracts and analyses are destined to

be restricted Theoretical analysis that should be contested and

put to the test in order to investigate its reliability and validity

Future research can focus on1. typologies extraction2. instrument formulation3. theoretical cultivation of dimensions4. practical experimentations 5. meta-analysis to further explore the instruments of

competitive advantage from an empirical standpoint

Thank you for your attention!

Peter J. Stavroulakis (pjstav@gmail.com)

Prof. Stratos Papadimitriou (stratos.papadimitriou@gmail.com)

Yannis Koliousis (kolious@gmail.com)

Department of Maritime Studies, University of Piraeus

Acknowledgement

The publication of this paper has been partly supported by the University of Piraeus Research Center