Clustering Competitiveness Of Denmark Manufacturing – Coursework Example

Clustering Competitiveness of Denmark Shipbuilding CLUSTERING COMPETITIVENESS OF DENMARK SHIPBUILDING The Danish shipbuilding cluster is entirely dominated by the Odense steel shipyard group that constructs majority of ship hulls at their automated shipyard. The competiveness of the cluster has been gradually eroded over time, particularly as it has attracted incumbent companies that are not competitive internationally, which has made the cluster remain national and become marginalized1. Once one of the most powerful shipbuilding clusters in the world with a market share of 5%, this has dropped to the current 0.5%2. The reasons for this profound decline in competitiveness have been decreasing orders for new ships, while majority of shipyards have had to close down in the last twenty years. In addition, the Danish government subsidies previously offered to B&W shipyard, decreasing the cluster’s overall competitiveness. Shipyards in cities and towns dominated traditionally by shipbuilding like Svendborg, Naksov, and Elsinore that were part of the Danish shipbuilding cluster could not remain competitive without subsidies and closed down3.
This development has continued to plague the Danish shipbuilding cluster in recent years, which has precipitated a drop in the cluster’s share of total deliverables to the world from 5% to 0.5% between 1995 and 20104. This has profoundly affected the standing of the shipbuilding cluster, along with the ship repair cluster, within the larger Danish maritime mega cluster, holding a relatively modest 9% share of value creation5. In addition, it also employs only 10% of all employees working in the Danish maritime mega cluster6. The shipbuilding cluster’s declining competitiveness can best be evidenced by the high level of consolidation, in which Oerskov Christensens Staalskibsvaerft and Odense Staalskibsvaerft account for majority of output in the cluster. Out of this, Odense Staalskibsvaerft, which is owned by A.P. Møller, controls roughly 55% of the clusters value creation, which indicates lack of competitiveness within the cluster itself7.

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