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Clusters And Ecuador Essay

1651 words - 7 pages

3.3 Clusters in Ecuador
The business structure of Ecuador is composed mostly of micro, small and medium sized enterprises (see Figure 3.1), and so the creation of competitive advantage, unlike the large firms, is limited by the lack of economic and technological capacity. In this context SMEs depend on the close relationship with their immediate environment, i.e. its articulation with other companies and institutions with which they can create productive and competitive synergies.

Figure 3.1:Business Structure of Ecuador

Source: Survey of Manufacturing and Minery, 2007

According to the indicators of the World Economic Forum in the last four years, Ecuador has been located in the last ...view middle of the document...

Nevertheless, it is not possible to assure if this information of business relationships show an explicit form of associations between firms that could be classified as proper clusters. However, it is possible to determinate that in Ecuador there is a type of business relationship in the processes of production chains, either firms outsourcing part of the production, the sale of the production to another company or the production of a certain amount of products to third enterprises, all of these implies that there is some degree of associativity. These behavior between companies is evidenced especially in the fields of food and beverages, rubber and plastic products, manufacture of metal products and manufacture of equipment and machinery.

3.3.1 Clustering initiatives in Ecuador
From the year 2002 some initiatives have been arising in the country. The Ministry of Agriculture and Livestock (MAG) (currently called Ministry of Agriculture, Livestock and Fishery) created talking spaces, called advisory councils. In these spaces the private and public sector are invited to establish proper dialogues. The objective of these spaces are to solve the conflicts that can arise in the different sectors, that are competence of the ministry, and also to advice on one hand, the Minister of the MAG and on the other hand, the agriculture and livestock private sector. In the dialogues both sides work together in order to establish strategic policies to strengthen the competitiveness of the sector.
In one of the meetings, the Ministry of Industry External Commerce and Integration (MICIP) (currently named the Ministry of Industries and Productivity) promoted the creation of clusters as an instrument to generate competitive advantages focusing on the participation and innovation of existing SMEs. Consequently, a pilot project was developed and implemented for the creation of textile clusters in Atuntaqui and the footwear cluster in Ambato. Alongside the Corporation of Promotion of Exports and Investments (CORPEI) fosters the diversification of the exportable offer and development of added value chains, pursuing the elaboration of not traditional products and promote the concept of clustering in order to support the development of each productive sector (Hernandez, Davila, 2003)
On the other hand, the Agency for Development and Regional Integration of Cuenca (ACUDIR) was founded in 1998 in order to promote clustering among companies in the south of the country. Since then, they have been working with small leather businesses that currently are exporting their products to foreign markets. In this region of the country, other experiences have been gathered from other sectors, for example woodworking, metalworking, and straw shawl and recently with software and jewelry. This agency provides the necessary financing of the projects with the help of third entities interested in investing in the potential sector. These entities include some institutions of the public...

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