Leveraging business clusters: How value chains are activated

A series of policies and strategies contributing to the exploitation of business clusters to activate Euromed value chains were presented during ANIMA Annual Forum.

Important conclusions obtained through research presented by Dr. Myriam Ramzy, Assistant Professor of Economics, Faculty of Economics and Political Science in Cairo University includes the fact that despite the initiatives undertaken by the MENA countries to promote the development of their clusters, four main pillars present deficiencies and prevent the real success of these clusters. These are the required human capital (especially skilled workers), a specialised and "healthy" legal framework, while significant room for improvement exists in the industrial structure that should promote the interconnection of the involved clusters.

It was also emphasised that government policies should play two roles: Facilitate the situation and be catalysts in enhancing dynamic comparative advantages and extroversion and form the basis for eliminating all market inefficiencies in the cluster network.

The liberalisation of FDI is the key to promoting the development of clusters because it encourages foreign participation, which serves as an export platform for the firm and facilitates its integration into global value chains (GVCs).

According to the professor, the room for improvement includes the need, as in most countries, to develop a transparent policy of state ownership and a governance framework, so that the private sector can make informed investment decisions and reduce uncertainty.

The clusters in Algeria, Jordan, Lebanon, Palestine and Morocco are characterised by undifferentiated structures and lack mainly marketing and communication organizations, as well as financial institutions, it is observed.

Finally, by putting all common macroeconomic, institutional and legal reforms and country-specific reforms into perspective, it will be easier for MENA clusters to contribute to sustainable development, achieving the development of technological and scientific results (sustainable innovation), creating new business activities (high added value) and better connecting their local businesses to global value chains, Ramzy suggested.

ANIMA Investment Network implements cooperation between private sector support ecosystems to promote an attractive, sustainable and inclusive economy.

The Annual Forum is being carried out with the support of Euromed Clusters Forward and EBSOMED (Enhancing Business Support Organisations and Business Networks in the Southern Neighbourhood) in partnership with Invest Cyprus.

The Gold Sponsor is AstroBank, the Silver Sponsor is Bank of Cyprus and the event is coordinated by IMH. InBusiness and GOLD are media sponsors.