MANUFACTURING PARKS/REGIONAL ECONOMIC DEVELOPMENT
By Manuel Cereijo
I. Manufacturing Parks
Hand with hand with incubation centers and industrial development is the manufacturing connection: a manufacturing park. To assist in the economic reconstruction of Cuba, the government will have to promote the creation of manufacturing technology parks.
These parks will be composed of clusters of small, medium, and large manufacturing companies, located through out the country, and built by the private sector. A typical manufacturing Center should consist of approximately 300 acres (150 Hectareas). Some of the components of the parks must be: manufacturing companies, a hotel, a conference center, and amenities such as restaurants, lounges, meeting rooms, etc.
The facilities in the park are not mutually exclusive rather they should be interdependent, with a common focus of improving manufacturing companies'access to new and improved technologies. The parks will serve groups of heterogeneous manufacturing companies, depending on their geographical situation within the Island.
The type of information and assistance that these companies will need is likely to vary significantly, but will become homogeneous and generic, as mentioned earlier, since the new technologies are computer based.
Wherever the computer is applied, increased structured, discipline, and standardization result, as we also noted before, for that industry. The Centers will provide an integrated approach to technology, with the result of a tremendous increase in productivity and efficient at all levels.
Some of the Centers should provide space for companies to display and market the newest innovations and products to attract visitors from the United States, Latin America, and the Caribbean.
It will be critical in each Center to have a commitment from a manufacturer who will be interested in purchasing 50 acres or more for development of a manufacturing plant. Some concessions regarding the selling price of land will be necessary at the early stages, to secure a commitment. The medium size or large manufacturer will be like a magnet attracting smaller companies to the Centers. These smaller companies will come from either the incubator centers or from their own formation.
The ideal situation will be that the smaller companies located in the park will act as suppliers of the larger ones. This way, the large ones will operate under "zero inventory", reducing production costs and making their products more competitive in the international markets.
The smaller companies will have a large portion of their production secure by the needs of the larger companies, facilitating their expansion and growth. All of these new concepts will make Cuba's industrial products real competitive in the world market. They will be explained further in Section C of the report.
In summary, manufacturing parks or centers will be an important part of the economic reconstruction of Cuba. They will offer not only an opportunity to assist in the revitalization of the existing industries, but, will provide a stimulus for the industrial expansion and the development of new industries in Cuba. Industrial parks will constitute the core of "regional development", a necessary concept to implement in Cuba and that will be discussed next.
II. REGIONAL ECONOMIC DEVELOPMENT
Our competitive advantage in Cuba will be our capacity to innovate. This is embodied in our history, traditions, and people. What the country will need is to rediscover how and why the innovative spirit worked for us so well in the pre-Castro era and in the exile community, and what changes will be required to keep it working in the future.
It will require the collective genius of business, labor, education, and government exercised in a setting that supports and encourages it. One of our objectives as a nation will be to make a top national priority the business of innovation, in both old and new firms, in universities, schools, and government institutions.
Our country will undergo a major transition from a socialist economy, natural resource economy, to one built on technology-based manufacturing, skilled human resources, and an incredible variety of services-some labor intensive, some automated. The driving force for change will come from new technologies. If properly done, we will achieve a major economic development.
The rising wave of technology will provide new tools to extend the life of old industries as well as to foster the beginning of new ones. The new Cuba will be characterized by a labor shortage, not measured in numbers of workers but in terms of skilled, qualified, educated, and productive workers. Retraining and education will be at a premiun. There will be a new role emerging for institutions of higher education not only as partners in future economic growth but as leaders in a new generation of life.
After a period of dormancy, innovation will reassert itself as a vital force in old industries and new, in manufacturing and services, and in diverse province economies. The competitive challenge before us will be to lead in the process of renewal- in knowledge, in technology, in capital stock, and in management.
Regional development is where much of the action will be in Cuba. The inmediate objectives of public authorities should be (1) jobs for the residents of the region or province and (2) tax revenues from industry and commerce operating within the province.
Regional authorities everywhere will understand that "high-tech" industries represent growth opportunities. They will initiate many programs designed to attract such activities and expand those already located in the province.
Actions must be based on an understanding of how the system works. Every region will try to improve its attractiveness for business and for people. This translates into concern for taxes, services, transportation, education, and cultural institutions. We will have to look more carefully at features which are of particular relevance to technically based industry, assuming that all other economic and personal amenities will also be pursued.
One important element will be a "critical mass" - the grouping of facilities with interests in technical change. Accumulating this mass will take time. Much of the activity for a technically based economic development will be associated with the universities in each region or province. The more and better the educational institutions, the greater the attraction for residents. Let me summarize several categories of benefits for a region based on a technical based economic development associated with universities in the region.
1. Convenient and lower cost education for students in the province.
2. Opportunity to obtain technical and scientific degrees on a part time basis
3. Specialized training tailored to local industry needs.
4. Faculty competence in technical areas relevant to local industry.
5. Specialized technical facilities and library to support technical based firms.
The role of universities in entrepreneurial activity will be very real and positive in Cuba. However, a province can not expect that the simple presence of a university will insure the blossoming of new high-technology companies. Entrepreneurial activity will be influenced considerably by the philosophy of the university, its administration, and the peer pressure of faculty.
The business climate in Cuba will be fierce both domestically and internationally. The competition will be between countries, provinces, and communities, as well as between large and small firms and among industrial sectors.
The ability to introduce new technologies or services to the market place poses several unique competitive problems everywhere and so will be in Cuba. There will be a gap between a firm and its potential markets. That is why the promotion of new industry growth should become an important facet of economic policy. Building indigeneous companies will become an essential element in regional economic development.
Indigeneous company growth will be a very beneficial and necessary long term economic development strategy for Cuba. It will harness local entrepreneurial talent. It will build companies which in turn will create jobs and add value to our communities.
It will keep home-grown talent within the community. Finally, it will encourage economic diversification and technological innovation by creating a climate that rewards productivity and innovation.
The entrepreneurial process, and the growth of indigeneous companies should be stimulated by each local authority in Cuba. Specially with mechanisms such as emphasizing quality education programs, tax incentives, establishment of development and industrial parks, etc. Local governments must provide facilities, resources, and expertise to promote new business activity in their cities.
Regional economic development will be at the forefront of technical enterprise in Cuba. Because it will involve the average citizen and the responsible political leaders, it will probably be the most effective activity for integrating the technical enterprise into Cuba's society.
Financial support for new firms, both venture capital and loans, will be the quintessential element of the free enterprise in Cuba, yet, here also, regional activity will play a major role in the proper economic development.
One final comment may be appropriate on technically based regional economic development. Emphasis should be placed on the economic opportunities associated with technical advances. Since new products, processes, and services will result, there will be economic activity and employment.
Regional programs to facilitate the absorption of new technologies and development of specialized support services will be perfectly valid tools for economic growth in Cuba.