I first came across the phrase ‘Industrial Clusters’ at a round table discussion hosted by Eurochambres about ten years ago. There I met a fascinating man, someone I later became very proud to be acquainted with, who had been the EESC Rapporteur for a study of Europe’s ship-building industry. Joost Van Iersel’s report ‘Leadership 2015’ studied the impacts on communities which centred on the ship-building industry, and after recommending an appropriate structure for the most internationally competitive yards, he went on to recommend what public support should be given to those less competitive areas. Of course it wasn’t just the yards themselves, and their direct workforce, which needed to be helped. The supply chain companies in the hinterland of the major centres would also require re-structuring once their main customer was gone. And let’s not forget the university faculties and training colleges which had increasingly specialised to support their principal local industry.
Leadership 2015 was a ‘must-read’ for policy-makers in many other sectors, and in the discussion on Industrial Clusters – the mutually-supportive eco-system of large companies, and smaller suppliers, and customers, and all their associated skills and service providers – I learned that policy-makers really did need to think about the social as well as economic impact of either pre-emptive, or reactive, re-structuring of Europe’s industrial base.
So I was interested to meet recently an agency whose purpose is to support the regeneration of an Industry Cluster in the UK, following some dramatic industry re-structuring. I heard that in previous decades, many of the UK’s larger companies had extensive and well recognised programmes to develop their leadership talent. As massive single-company integrated sites have given way to smaller specialised businesses, and single-company sites have fragmented into many smaller operating companies or subsidiaries of foreign-owned enterprises, the critical mass for such in-house training has disappeared.
The consequent decline in skill and talent development has, to some extent, been mitigated with public funding to establish apprenticeship schemes and technical training, recognising the need to improve the competitiveness of the labour force.
But direction, management and motivation of this labour force to realise its full potential will require industrial leadership of the highest capability, and in the area of management and leadership development there has been little public support at a time when in-company programmes have declined dramatically. The legacy of managers who historically benefited from professional development is aging, will eventually disappear and new managers must be developed. In the past it was usual for a management and professional graduate to receive on average at least 20 days per year of formal training, development and coaching. Today, in the companies we surveyed, this average figure is below ten days per year.
The problem is well recognised, but there are few initiatives to address it. In a European survey of Industry Leaders in 2008, more than half of the participants acknowledged that they did less for their own young talents than had been done for them at a similar age. In the past it was usual for a management and professional graduate to receive on average at least 20 days per year of formal training, development and coaching. Today, in the companies we surveyed, this average figure is below ten days per year. Leaders of these companies had themselves benefitted from in-house programmes designed, and often led, by practical and experienced industry experts, to ensure formal learning of essential skills. This was usually supplemented by coaching and mentoring by seniors all in their own company.
So how can leaders in today’s fragmented landscape develop their talent when critical mass is not available for their own in-company programmes? Greater cooperation between companies at ‘Cluster’ level (or even ‘industry’ level) would seem like an appropriate place to start.