Industrial Strategy in Practice: Innovation and Management Best Practices in the Automobile, Energy and Aerospace Clusters in Bizkaia

May 2017

Industrial Strategy in Practice

This paper presents research undertaken in Bizkaia in the Basque region that ‘peels the organisational layers’ to assess the management practices of 10 firms. These firms are drawn from the automotive, energy and aerospace clusters that have achieved international recognition, positioning Bizkaia as a prominent region for innovation and production. Firms were assessed using leading methodology developed by LSE with McKinsey and Co that quantifies management practices and provides a comparison with comparable firms globally.

This paper commences with a review of the socio-economic environment in the Basque Country and Bizkaia, to provide the socio-economic backdrop in which firms operate and draw their resources from. This is followed by a review of the facilitators to innovation and social development including the role of the Administration, technology hubs and other factors.

The next sections of this paper introduce the three clusters in the Basque Country, providing an overview of their operations, size, economic contribution, employment and other attributes. This is followed by the presentation of the anonymised consolidated results for the assessment of management practices for the 10 participating firms.

This paper concludes with two short case studies encompassing both a private firm and a firm belonging to the world’s largest cooperative, that is worker-owned and controlled. This model epitomises the socially-driven ethos prevalent in both this type of firm and non-cooperative firms in Bizkaia and the Basque Country, that seeks to foster social ‘well-being’ with commercial success.