Frequently Asked Questions (FAQs)
1. What is the Cluster Competitiveness Activity (CCA)?
The Cluster Competitiveness Activity is a USAID funded project which works with industries and institutions in the wood processing and tourism sectors to develop strategies to increase productivity, and thereby increase the ability of these sectors to compete in the global economy.
Increases in a firm’s competitiveness and productivity lead to greater profitability. Greater profitability can lead to more jobs, contributing to the growth of the overall economy.
2. What is competitiveness?
The major premise underlying competitiveness is that individual firms cannot become and stay competitive in an increasingly open and integrated world economy on their own.
Competitiveness is sustainable growth in productivity by meeting market demand in the production of goods and/or services. Growth in productivity is driven by the quality of business strategy and operations, and this quality is affected by both the macroeconomic environment, and the microeconomic environment.
3. Why does CCA work with only the wood processing and tourism sectors?
USAID commissioned an analysis of BiH industries, and the results showed that three industries in BiH - the wood processing industry, tourism and agribusiness - have considerable potential to develop, grow and create new jobs. CCA is working with the wood processing and tourism industry while the agribusiness industry receives support through another USAID project –Linking Agricultural Markets to Producers (LAMP), www.usaidlamp.ba.
4. How does CCA contribute to the further development of the BiH wood processing and tourism industries?
CCA uses the “cluster” approach as a framework within which to bring associated businesses and institutions together to work on issues of common interest. Clusters are groups of interconnected firms, suppliers, related industries and institutions located in a particular geographic area.
5. Why does CCA use the cluster approach to increase competitiveness?
To secure BiH’s position in the global market, government, business, trade associations and educational institutions must work collaboratively on the challenges facing BiH.
Cluster groups operate as networks. Cluster members build buyer-supplier relationships and help each other meet market standards for design, production and delivery. Cluster groups also link economic institutions, such as banks and investors, or schools and regulatory agencies more directly to the firms that are part of the production side of the cluster.
6. How does it work in practice?
CCA has mobilized hundreds of representatives of companies, related institutions and organizations in selected regions of BiH. Tourism industry stakeholders in Krajina and Herzegovina, and wood processing industry representatives in Zenica Canton, Una Sana Canton and Banja Luka have come together in cluster work groups to tackle issues of common interest.
CCA facilitated the process during which stakeholders identified problems in their industries, prioritized those problems, and prepared action plans to overcome them. The groups are now undertaking the necessary steps to implement the plans. Stakeholders actively contribute to this process, giving a significant amount of their time, energy and resources to defining and implement their strategy.
7. How do the CCA stakeholders contribute to the process of increasing BiH tourism and wood processing industries` competitiveness?
Each stakeholder has a key role in this process. Stakeholders include governments and businesses; suppliers, distributors and buyers; educational institutions; development agencies; banks and other financial institutions and supporting services. They cannot work without each other. Neither the tourism nor wood processing sector will develop unless:
• BiH governments help develop a specialized infrastructure and provide world-class education.
• Business associations take a vital role in pushing government toward reform, informing government of reform priorities, and helping to implement those reforms.
• Private sector leaders add unique value to their products and services to meet the demands of sophisticated consumers, who will reward them with higher profit margins.
• Academic institutions take a leadership role in reforms and interact regularly with the business community; they must also contribute to business innovation.
• Labor unions contribute by working with governments, business, and educators to ensure that workers in BH are able to provide world class human resources.
8. What role does CCA play in the process of linking these industries together on their path to development?
In addition to facilitating the process of collaboration, the Cluster Competitiveness Activity provides training, industry and market analysis, and technical assistance in the fields that cluster groups identify as priorities. CCA also facilitates access to USAID-supported loan guarantees through the Development Credit Authority and to the Global Trade Network, a network providing links between producers and buyers, internationally. Technical and financial support is also provided for joint representation of industries at national and international fairs and exhibits, and for various other specific industry-related projects.
9. Does CCA provide grants or financial support to individual projects?
The Cluster Competitiveness Activity is designed to assist the tourism and wood processing sectors to increase capacity, increase jobs and wages. To help meet these objectives, CCA has limited financial resources to fund selected proposals from stakeholders from both sectors. Interested ‘stakeholders’ can contact the CCA project for more information relating to submission of proposals for funding (see below for telephone contact information).
10. How can a company or other organization join one of the cluster work groups?
Anyone who wants to contribute to, or benefit from, cluster activity is welcome to join their regional cluster.
Call the CCA offices in Banja Luka (51 316 441; 316 442) or Sarajevo (33 200 146) to register to participate.
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