Bringing Competitors Together

Do you want to help your competition succeed? Do you want to task the best minds in your company with helping to resolve a tolerance issue or make a decision about materials for the shop across town? The natural reaction to these questions is typically an emphatic “no!” However, what if the reward is that 150 of your closest competitors do the same for you? And, by joining forces with hundreds of researchers from engineering colleges and training centers, each partnering company continues to become better at what they do and develops a stronger reputation for quality products and services and better prices. Therefore, business tends to be drawn to these companies, reducing the amount of work lost to overseas competition and paving the way to continued growth. As a result, increased work in the area leads to greater success for all.

A group of organizations in the Haute-Savoie Department and Arve Valley region of France has assembled such a force. In the eastern part of the country, near the border of Switzerland, a lineup of about 150 screw machine shops (and growing) has teamed with the Chamber of Commerce, the General Council of Haute-Savoie and 250 researchers belonging to university labs, engineering schools and training centers to form what they term a “Competitiveness Cluster.”

The idea for the Cluster was a natural fit for this area because of the large number of screw machine shops that exist there. Known as “Technic Valley,” this region, which is roughly only half the size of Rhode Island, is home to almost 500 companies focused on the production of precision turned parts. This is the greatest concentration of bar turning companies in the world, and as word of the Cluster’s success spreads, more and more of these shops are joining forces to resist price pressures, increase technical advantages and guarantee to their clients ongoing progress in innovation. Their teamwork has resulted in faster resolution to machining issues, more resources for business development and better education and training programs that lead to larger numbers of skilled shop personnel available for the entire Cluster. Knowing that so many nearby organizations doing similar work have formed an alliance such as this, how can a company afford not to get involved?

Watch It Happen

As in most parts of the world, early in the 18th century, the main trade of the Arve Valley was agricultural. To make up for seasonal shortages, individuals brought in new sources of income by developing skills in the watch-making industry and supplying parts to the watch-making businesses of Geneva, Switzerland (only about 30 miles away). By the mid-1800s, the valley held more than 115 watchmakers. By the end of the 19th century, the valley was taking full advantage of the Industrial Revolution, applying the area’s vast hydraulic power sources to early Swiss lathes. With the outbreak of World War I, the watch-making industry of the valley changed direction to defense priorities and accelerated the development of bar turning. By this time, the turning industry had become the dominant source of income for the region.

Today, companies of the Arve Valley are responsible for 65 percent of French production in turning. The sector is made up almost entirely of small shops, of which 88 percent have fewer than 50 employees. Only 20 shops employ more than 100 people. Yet, the total employee population of shops in the area is more than 15,000, operating more than 25,000 turning machines. Each year, 275,000 tons of materials are processed for a range of applications from automotive to aerospace to defense to medical. A lot of parts are produced there.

Where It’s Headed

As it is in the United States, the machine tool industry in France faces constant pressure from countries with low labor costs. To sustain the effectiveness of this industry and its impact on the country’s economy, France has put in place a broad industrial policy that aims to stimulate the capacity for innovation in business. This policy is the origin of the Competitiveness Cluster.

Early in 2006, a framework contract was signed between the chairman of the Cluster and the State, and the Arve Industrie Haute-Savoie Mont Blanc Competitiveness Cluster was born. The objective of the organization is to create and promote synergy between businesses, public laboratories and training centers in matters of research and development to keep business in the area and remain internationally competitive.

Organizers of the Cluster use three main principles to guide the member organizations: Innovation by process, innovation through organization and industrial performance, and innovation by product. Much the same way trade associations in the United States, such as the Precision Machined Products Association (PMPA), promote industrial interests for member companies through education, strategic planning and information sharing, the Competitiveness Cluster will help secure continued success for those organizations interested in taking advantage of the opportunity.