National cluster support program to encourage cooperation between businesses, R&D and other institutions, thus contributing to increase of competitiveness.
The Program supports the creation of tourism clusters which is rather unique in national cluster programs in EU. It’s a successful form of tourism destination management and contributes to the growth of the competitiveness of destination and the tourism entrepreneurs operating there. The Program contains special conditions for development of tourism clusters. Main cluster activities supported by the program are promotion of export and innovation, creation of new products, cluster internationalization, integration of RIS3, cluster excellency, etc.
Cluster development strategy for tourist destinations is a prerequisite to enter in the project competition for cluster program support.
Project applicant (association or foundation) must meet a number of criteria: network should include at least 20 cluster members –SMEs. For critical mass of development, the turnover of these members should be over 10 million EUR in a year and export volume at least 2 million EUR. Cluster network should ensure growing number of cluster participants in the following years. The cluster members must ensure compliance with volume of exports. Also, at least two R&D organizations must be involved in the project as partners. Clusters may be formed also as Interdisciplinary cooperation networks. Funding available for one cluster: € 415,000, project implementation lasts for 4 years. The funding intensity is 85%.
Cluster program is financed by the ERDF fund, total budget is 6,2 mil. EUR. It is as an open call during which associations or other legal entities submit their cluster project proposals. According to the criteria and priorities put up by the Ministry of Economics most relevant projects are selected
Evidence of success
All activities together resulted in guest increase of 33,18% in 2018 compared to 2012 of which 38.32% are foreign tourist increase. The ratio of domestic and foreign tourists is currently 60/40, contrary to the situation in 2012 with ratio 63/37. The number of application users increased by 112% in 2019 compared to 2018.
Since the Cluster support program is aimed at clusters with large total turnover of cluster companies, high export numbers, thus favouring large industry associations, program support for SMEs is difficult to access, especially in tourism where the sector is dominated by a large number of SMEs.
Potential for learning or transfer
Cluster initiatives are a new measure among the SME support instruments in Latvia and are eager to find out the best practices to achieve the best results and highest impact on the economy through smart investment.
Supporting cluster initiatives is an important tool to boost the cooperation between different actors.
Cluster development and smart specialization are closely related notions, since successful cluster emergence and growth constitute regional specialization. Consequently, cluster policy today more and more follows a systematic approach. It shall be understood as an important element of regional development policy.
Furthermore, when turning cluster policies into practice it has to be taken into account that each region has its unique set of economic opportunities and challenges. Thus, cluster policies need to be aligned with the local conditions, and support programmes have to be implemented in ways that are consistent with the realities of the location.
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