By Hákon Gunnarsson, Iceland Geothermal Cluster Initiative, Iceland, presented at the 16th TCI Global Conference, Kolding 2013.

1. Different Approach in Cluster Strategy in Iceland
Hákon Gunnarsson
Breakout Session: Strategic desing thinking – cluster strategy
5 September 2013

2. Hákon Gunnarsson
Education
1996 Cand.merc. (M.Sc.), Copenhagen Business School
1986 Cand.oecon, University of Iceland
Career
2000-2008 Capacent – Head of Strategy
1997-1999 Iceland Alloys – CFO
1996-1998 Samsölubakarí – Managing director
1995-1997 Aflvaki hf., Investment Development Agency
1993-1995 World Championship Handball 1995
1987-1990 Icelandic Soccer Pools Managing director

3. Can Iceland be the Houston of
Geothermal?

4. ddddddddddddddddddddd
SCANDINAVIA – Total population 26 million
Iceland is 1,3 % of the whole area
Iceland geothermal
Iceland: 0,3 m
Norway: 5,0 m
Denmark 5,6 m
Sweden: 9,5 m
Finland 5,4 m

5. February 2nd 2013
“Politicians from both right and
left could learn from the Nordic
countries”

6. Iceland is not invited to the party anymore
World Economic Forum Competitiveness Ranking 2012
-3 -4
-12 -14
-32
Finland Sweden Denmark Norway Iceland

7. Michael Porter and Christian Ketels in Iceland
2 October 2006
Drivers of Iceland’s Competitiveness
- Key strengths in
infrastructure, basic
skills, administrative
capacity, and openness to
competition.
- Key weaknesses in the
innovation
environment, depth of
clusters, and demand
conditions
Overheating
economy
• Iceland’s
prosperity is
ahead of its
competitiveness

8. Key Clusters in Iceland
Established ones Emerging ones
Specialty food
Specialty apparel
Tourism
Creative
industries (rock
music, video
games etc. )
Life Science
Fishing Products
Energy intensive
Metal Production

9. Key Clusters in Iceland
Established ones Emerging ones
Geothermal
Specialty food
Specialty apparel
Tourism
Creative
industries (rock
music, video
games etc. )
Life Science
Fishing Products
Energy intensive
Metal Production

10. How did this initiative started?
Net Primary Energy Use in Iceland, 1940-2011
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1940 1950 1960 1970 1980 1990 2000
Coal
Oil
Geothermal
Hydropower
Peat
Source: Natural Energy Authority of Iceland

11. Total current installed capacity: 10.954 MWe
Total potential capacity: 193.500 MWe
12
Indirect Geothermal Use: Current and Potential Capacity
• Only about 5% of potential capacity has been exploited
• About 40% of unexploited global capacity is in Asia, and 20% in North America
4,100
43,000
0
16,100
174
14,000 3,900
74,300
640
9,000
1,060 4,200
575 4,300
Current installed capacity in region
Potential capacity in region
510
28,600
Source: Islandsbanki, 2008
North America
Central America
South America
Iceland
Europe
Africa
Oceania
Asia

12. Iceland Geothermal 2010 – 1 Nov 2010

13. Mobilizing the Icelandic Geothermal Cluster
Mapping and
Profiling
• October 2009 – June 2011
• Mapping and analysing of the
Icelandic Geothermal Cluster
Joint Efforts
• July 2011 – December 2012
• Joint efforts of the cluster initiative

14. Joint Efforts - July 2011 – Dec 2012
Source: Greenbook. Ketels, Lindquist, Sölvell 2003
Cluster
Expansion
Innovation
and
Technology
Eductation
and Training
Commercial
Cooperation
Policy Action
Research
and
Networking
Iceland Geothermal
Conference 2013
Dialogue with
government on
licencing processes
Innovation -
Maintainenance
Startup Geothermal
Energy Fund
Innovation – Project
Management
State of the art project
management program
Data collection on the
impact of geothermal energy
Fund for education on
renewable energy
Seminars on bottom-up cluster
strategy and management

15. Members of Iceland Geothermal

16. Iceland Geothermal Initiative 2013
Service agreement
BOARD
General Assembly
Cluster Management
11 members
• All major Energy companies
• All major engineering companies
• High level academians
• CEO´s of Direct usage companies
Cluster
Expansion
Innovation
and
Technology
Eductation
and
Training
Commercial
Cooperation
Policy
Action
Research
and
Networking

17. Iceland Geothermal at Cross Roads
Mobilize the
cluster
Define a strategy
Execute priority
actions
2009 – 2012 2013 2014 - 2019
Mapping and
Analyzing
2009-2011
Joint Efforts
2011-2012
Cluster Organisation
founded
15 Feb 2013
IGC 2013
March 2013
Strategy Meeting
June 2013
Bottom - Up Top - Down

18. Iceland Geothermal – Define a strategy
Mission
Knowledge
Vision
Communication Innovation

19. Houston of geothermal
Export products
Export servicesExport knowledge
Investment to leverage
expertise
Education and patents Technical services
Operational
management
• Equipment production is currently
not significant
• Lack of capital is a key
constraint
• Could provide
expertise in evaluating
projects to others
• Educational offers exist
but are so far not
commercially viable
• Iceland subscale in
scientific research
• Available knowledge is
not codified
• Solid capabilities and
strong global network
• Currently also low
price level
• Companies tend to
lack size and capital to
lead large projects
• Solid practical
experience
• Relevant companies
largely publicly-owned
• Skills more technical
than commercial
Source: Michael Porter and Christian Ketels 2010

20. Funding of Clusters in Iceland
Iceland Geothermal cluster
[PERCENTA
GE]
8%
Industry Government
Traditional „cluster“ in Iceland
[PERCENTA
GE]
100%
Industry Government

21. CASE – IESE Barcelona

22. Beinir hagsmunaaðilar Opinberir aðilar og
stoðþjónusta
Óbeinir hagsmunaaðilar
Ferðaþjónustan
Mjóeyri
AUSTFAR

23. Thank you
Iceland Geothermal
Welcomes you to IGC 2016