A Horticultural Cluster – Solution for Sectoral Growth and Food Security

Functioning on own merits and philosophies have never brought around powerful outcomes – not in politics, not in economies and neither in horticulture. The answer lies in grouping together experience, capabilities and resources in what one would call ‘clusters’. In the Netherlands a successful program was established and mirrored in Ethiopia to prove it is not only possible in a particular country.

The competitive strength of nations is determined by four interrelated determinants that shape the national environment. Factors of production can be categorized into several groups: Human resources: the quantity, skills and cost of personnel for a certain sector. Physical resources: the abundance, quality, accessibility and cost of the nation’s physical resources, such as climate, land, water and power. Knowledge resources: the nation’s stock of scientific, technical and market knowledge on goods and services. Infrastructure: the type, quality and user cost of infrastructure that affects competition. This includes the transportation system, the communication system, etc. as well as less obvious infrastructure that affects the quality of life and the attractiveness of a nation as a place to live and work. The structure of a company is determined by the style of management in a company, or in a country as a whole. Possible differences in management styles can, for example, result in more hierarchical company structures or in more flattened company structures. Rivalry between companies in a country spurs innovation. Domestic rivalry is more intense and motivating than international competition, because within a domestic rivalry all companies are on a level playing field. Good cooperation between producers can, however, also form a competitive advantage if producers help each other to attain a higher qualitative or quantitative level of production. Clusters are geographic concentrations of interconnected companies and institutions in a particular field. As such, they must combine all the best of the determinants mentioned above. In general, clusters encompass arrays of linked industries and other entities that are important to competition. This implies that, besides regular competitors, clusters can also include manufacturers of complementary products and companies

The structure of a company is determined by the style of management in a company, or in a country as a whole.

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in industries that are related by skills, technologies or common inputs. Upstream, suppliers of specialized inputs and providers of specialized infrastructure can be included. Downstream, the cluster can extend to channels of customers. Finally, governmental and other institutions (universities, think tanks, trade associations) can also be included. Developing countries are facing tough new challenges. Their competitive environment is characterized by globalization, liberalization and extensive organizational, institutional and technological change. In order to survive in these circumstances, companies in developing countries must be able to face increasing competition. Since many enterprises in developing countries are small or medium sized enterprises (SMEs), an industrial strategy much referred to is clustering. This holds especially for the agro sectors, because in developing countries especially these sectors are characterized by the presence of SMEs. Two of the challenges of cluster development in Africa are the lack of critical mass of skills and talent, and the weak links between b Companies are becoming more knowledge and technology intensive and knowledge based. Another challenge is the weak government and institutional support and also resource depletion and failure to meet international standards. The following are possible policy implications to tackle these challenges: Encourage further knowledge acquisition, adaptation and dissemination, strengthen educational institutions and technology institutes and their links with the business sector, establish and enforce a business conducive institutional plan, including clear regulations, standards and quality assurance mechanisms, strengthen and upgrade skill training, provide infrastructure and, in the long run, promote greater consumer purchasing power. Thus, governments can play a very important role in cluster creation. Some of the most important challenges that a horticultural cluster must overcome are: Meeting the high quality standards of foreign consumers, production, post-harvest and logistical arrangements and facilities in the flori- and horticultural business have ample scope to improve performance and product quality. This is also very much

Two of the challenges of needed and should be given high priority cluster development in Africa in order to meet consumer demand, are the lack of critical mass of to seize market opportunities and to skills and talent, and the weak improve the competitive position. links between businesses and From a discussion around the effect of knowledge institutions. clusters in an African country, by the economist Michael Porter(EU).