Holger Schach: “The situation is positive” – clusters strengthen the Northern Hessen business region

The competitiveness of companies depends on their being embedded in interlinked structures. In Hessen, networks are gaining increasing importance as growth poles of economic development. They bring together innovative companies, scientific institutions and public organizations so that these latter benefit from the resulting synergy effects.

Following German reunification, Northern Hessen developed to an inordinately positive extent compared to neighbouring regions. Northern Hessen has the largest growth rates and the largest pro-rata decrease in unemployment. A process developed in the region has made a crucial contribution to the reinforcement of regional economic growth potential.
In order to develop Northern Hessen as a strategic economic region and to expand these strengths, the organization Regionalmanagement Nordhessen GmbH was formed in 2002. Partners are the city of Kassel, the five counties in Northern Hessen and member organ­izations in the regional economy (Chamber of Industry and Commerce, trades chambers and the Förderverein Pro Nordhessen e.V. business development organization). Since their formation, these organizations have been developing core competencies in order to clearly position the region in international location competition. At the same time, efforts have been focussed not only on getting companies to locate to the region but also to deliberately link up companies, research centres, in­­dustry organizations and associations and political decision makers. For this purpose, the term “cluster” has become estab­­lished as a concept in regional politics.

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These clusters link up all companies involved in manufacturing and services, public organizations and business-related institutions from a sector in a region. The mutual relationships promote more com­­­­petition between individual member com­­panies or organizations and the entire system. The cluster mem­­bers may be – alternatively – suppliers, customers, competitors or partners. The members see cooperation along the added value chain as a success factor in their development.
The actual use or benefit is commercially measurable according to parameters such as cost reduction, careful use of resources, increased flexibility and additional business contacts. If the companies in a cluster develop positively, the region benefits as a whole.

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the decision to concentrate on three clusters in Northern Hessen was a landmark. These clusters include the transport industry, tourism/wellness/health and de-centralized energy technologies/energy efficiency. The deciding factor in selecting them was the region’s economic leverage as defined by turnover, gross added value, the number of jobs and growth potential. This focus on core issues helps define a clear priority for political decision makers in municipalities, the region and the state and helps support corresponding projects in the clusters on a priority basis. Of course, the prerequisite for success was the establishment of profes­­sional cluster management, which, due to the large number of partners and interests, proved to be a complex and time-consuming task. Firstly, an analysis was carried out: Where are we? Where are our strengths? Where do we want to go? What do we have to do to get there? Firstly, it was important to convince opinion-making companies of the benefits of regional cooperation. This succeeded because it was possible to put across the commercial vision at the starting phase of reducing production costs through targeted exploitation of the German loca­­tion advantage (motto: “Northern Hessen – a Good Location”). In the initial stages of the Transport Industry Cluster alone, events, forums and project groups led to the gene­ration of new cooperative efforts between companies, and hence orders.

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The Transport Industry Cluster platform MoWiN.net e.V. (Transport Industry in Northern Hessen) bundles the interests of companies and also supports regional management in implementing supporting projects, including the establishment of the Logistics Training Academy and the Centre for Applied Metal-Forming Tech­­nologies (METAKUS). Essentially, visions must be defined and made measurable by concrete aims.
Thus, through targeted company relocation management, the intention is to create more than 10,000 new jobs over the next ten years in the logistics competence field. This growing logistics com­­petence is, in turn, the lever for getting more companies who would benefit from the cost advantages in Northern Hessen to locate here. The two other clusters are also managed according to this principle – finding partners, bringing them together, developing joint strategies and projects in workshops and then implementing them. Thus, innovative projects are also being developed in the tourism/wellness/health cluster with some 100,000 jobs, nine billion euros in turnover, eleven health spas, 100 clinics and numerous tourism service companies. Both in tourism (walking, cycling, golf) as in health (medical wellness, health at the workplace R&D projects), new products and long-term cooperation projects have been developed, which considerably improve the region’s position in both very competitive markets. Approval of the umbrella brand “Grimm­Heimat NordHessen” (“Northern Hessen – the Home of the Brothers Grimm”) set a milestone for successful tourism marketing.

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As a third future-oriented issue in Northern Hessen, Regionalmanagement Nordhessen GmbH is coordinating the de-centralized energy technologies and energy efficiency cluster, which is considered to have the greatest growth potential in Northern Hessen. The partners have combined to form the Competence Network Distributed Energy Technologies deENet, whose aim is to successfully participate in the global growth market for de-centralized energy supply systems in order to create future-proof employment. The plan is to increase the 3,000 or so jobs to a total of 20,000 by 2020. To achieve this, marketing of the existing companies is to be coordinated, new processes and products are to be developed on a joint basis and the de-cen­­tralized energy R&D location in Northern Hessen is to be reinforced.

This has given rise to the development of informal, inter-institutional business development structures aimed at rapid, success-oriented action by network partners. In Northern Hessen, the principle of “reinforcing strengths” is no longer an empty phrase, it has become a strategy for this location.

CH1_0853The author was born in 1962 and has been managing director of Regional­­manage­­ment Nordhessen GmbH since 2002. He stu­died economic geography and social sciences and initially started his career as a research assistant in the urban development department in Cologne. From 1993, he worked for the Thuringian state development company, most recently as a director of urban and regional development.