Author

Shona Clive, Project Lead for Rail Cluster Builder & Forth and Tay Offshore Cluster

5 minute read

What are industry clusters actually for?

Telling a small business that tens of billions of pounds will be invested in an industry over the next decade might sound impressive. But what does that actually mean for a company employing 20 people in Ayrshire, Fife or Dundee?

Telling that same business there’s a £100,000 contract coming up, what’s required, who’s buying and how to compete for it is considerably more useful.

That’s the difference between knowing about investment and helping businesses benefit from it. And in my view, it’s what industry clusters should be for.

You don’t know what you don’t know

SMEs make up more than 99% of Scotland’s private sector businesses and provide around 1.2 million jobs. Across the country, outstanding engineering, manufacturing and technology companies have exceptional skills, but they aren’t always good at promoting themselves. In a small business, one person might handle operations, finance, recruitment and customers. There’s little time left to research new markets or navigate procurement.

Meanwhile, major contractors and infrastructure owners understandably rely on suppliers they already know and trust. They can’t possibly know every capable Scottish supplier.

Neither side is doing anything wrong. But capable businesses get overlooked simply because potential customers don’t know they exist.

Much more than networking

Clusters are sometimes mistaken for networking groups. Relationships matter, but a good cluster goes much further.

The question I’m asked most often by SMEs is simple. Where are the opportunities? What are they, what are the timescales, and how can I get involved?

Industry can help enormously here. Clear, visible pipelines of upcoming work give businesses the confidence to invest in people, accreditations and equipment. Clusters then help SMEs understand those opportunities, signposting the right ones and arranging one-to-ones, meet-the-buyer sessions and events that give them direct contact with the people buying.

To do that well, a cluster needs to understand its businesses: what they make, what expertise they have and where else their capabilities could be applied. That knowledge doesn’t come from the occasional event. It comes from visiting businesses and staying close to the industries they serve.

Removing barriers, not adding them

Once a business sees a viable opportunity, the next question is what it will take to compete. Entering rail, offshore wind or electricity transmission can mean investing in accreditations, training and equipment before winning a single contract.

If clusters exist to help businesses overcome barriers like these, they shouldn’t add another one. That’s why I believe cluster participation should be free at the point of entry for SMEs.

That doesn’t mean clusters cost nothing to run. I’ve worked with clusters funded by enterprise agencies, Government and Skills Development Scotland, by industry alone, and by a mix of both. All of these models can work, as long as they deliver value. But the cost shouldn’t fall on the small businesses a cluster exists to support. This isn’t about preferential treatment or lowering standards. Scottish businesses must still meet industry requirements and compete commercially. It’s about giving them a genuine opportunity to do so. When they succeed, the benefits reach well beyond the contract: new jobs, apprenticeships, investment and spending with other local businesses.

Innovation, skills and resilience

Clusters work across sectors, so they can spot where an idea can travel. A solution developed for rail might work in offshore wind. Through links with universities and innovation centres, clusters can connect real industry challenges with the expertise to solve them.

Skills need the same detail. It’s not enough to say an industry needs thousands more workers. Which competencies? Where are the shortages? What training already exists? Working with Skills Development Scotland, colleges and training providers, clusters can help training match real demand. They can also spot shared needs. One business can’t justify a specialist course for two employees, but five businesses with the same need can.

And economic development isn’t only about attracting new businesses. It’s about keeping the ones we have. Clusters should know where supply chains are vulnerable, whether through reliance on one customer, skills shortages, rising costs or specialist capabilities at risk. When a specialist business closes, skilled jobs and years of experience go with it, and that capability may take years to rebuild, if it can be rebuilt at all.

Turning commitments into outcomes

In rail and offshore wind, supply chain commitments place a welcome focus on Scottish participation. But commitments alone don’t create opportunities, and social value shouldn’t simply be about recording activity in a report. It should be about lasting difference. Has a Scottish business won new work, taken on apprentices or invested in capabilities that will help it win the next contract?

The same test should apply to clusters. Whoever funds them is entitled to ask what difference they make.

Events, newsletters and membership numbers are easy to count, but they don’t measure impact. The better questions are these. How many new suppliers are active in an industry? How many contracts have been won? Which supply chain risks have been addressed? How many apprenticeships have been created?

Not every outcome can be attributed to a cluster, and not every introduction leads to a contract. But clusters should be able to show where they’ve made a difference. Activity alone is not evidence of impact.

The value is in the detail

Clusters need to understand the big picture, but their real value lies in the smallest details. The business that could supply a component. The missing competency. The technology from another industry that solves a problem. The supplier at risk of disappearing.

The headlines will always be about billions. But the real measure of a cluster is whether a small Scottish business hears about the £100,000 contract, and wins it.