Cluster Development Approach in India: An Antidote for Micro, Small and Medium Enterprises

Dinesh Rawat ., R.K. Mittal ., Vijita Singh Aggarwal .

Abstract


This paper focuses on two main aspects of the clusters, namely, which factors gives rise to development of clusters and what benefits are acquired by firms from participating in clusters of India. The methodology used for this article is a literature review of published materials. A broad search strategy was used using key terms like industrial clusters, evolution of clusters, and advantages of clusters from electronic databases. Among the factors that give rise to clusters in India, the more important ones are historical background, easy availability of raw materials, existence of one or few large enterprises, pooled labour market of skilled workers, regional government policy, and presence of entrepreneurial spirit. The important benefits reported by enterprises through their presence in clusters are formation of new business, network formation with supporting institutions, women empowerment, market development, product development, easy availability of finance, increased trust and collaboration among members, increase in sales, skills up gradation of workers and employment opportunities. We expect that the findings from this study will assist firms and policy makers in making more informed decisions regarding the adoption of a cluster approach and start new initiatives for promoting inter-firm relations within MSME clusters. The major contribution of this paper is that it attempts to justify the positive impact of cluster approach and describe the status of clusters in India.


Keywords


Clusters, Industrial clusters, Small and medium enterprises (SMEs), MSMEs, SME clusters

Full Text:

PDF

References


Ali, F. H. (2014). MSMEs in India: Problems, Prospects and Solutions in present scenario. Internationa Journal of Engineering and Management studies, 5(2), 109-115.

Asra, S., & Prasad, K. (2011). Impact of Economic Reforms on Small Scale Industries in India. International Journal of Business Management, Economics and Information Technology, 3(2), 317-321.

Baptista, R., & Swann, P. (1998). Do firms in clusters innovate more? Research Policy, 27(5), 525–540.

Barkley, D. L., & Henry, M. S. (1997). Rural Industrial Development : To Cluster or Not to Cluster ? Review of Agricultural Economics, 19(2), 308–325.

Beaudry, C., & Swann, G. M. (2009). Firm growth in industrial clusters of the United Kingdom. Small Business Economics, 32(4), 409–424.

Bell, G. G. (2005). Clusters, networks, and firm innovativeness. Strategic Management Journal, 26(3), 287–295.

Boari, C. (2001). Industrial Clusters , Focal Firms , and Economic Dynamism : A Perspective from Italy. Perspective, 24.

Consulting, E. R. (2001). A practical guide to to cluster development.

Das, K. (2008). Fostering Competitive Clusters in Asia: Towards an Inclusive Policy Perspective.

Das, K., Gulati, M., & Sarkar, T. (2007). Policy and status paper on cluster development in India.

Das, R., & Das, A. K. (2011). Industrial Cluster : An Approach for Rural Development in North East India. Journal of Trade, Economics and Finance, 2(2), 161–165.

Felzensztein, C., Gimmon, E., & Aqueveque, C. (2012). Clusters or un-clustered industries? Where inter-firm marketing cooperation matters. Journal of Business & Industrial Marketing, 27(5), 392–402.

FICCI. (2013). Integrating MSMEs with the Global Value Chain. FICCI.

FMC. (2006). Working together works: cluster case studies.

Fundeanu, D. D., & Badele, C. S. (2014). The impact of regional innovative clusters on competitiveness. Procedia - Social and Behavioral Sciences, 124, 405–414.

Giuliani, E. (2013). Clusters, networks and firms’ product success: an empirical study. Management Decision, 51(6), 1135–1160.

Gulati, M., & Sarkar, T. (2006). GETTING TO KNOW CLUSTERS Frequently Asked Questions.

He, Z., & Rayman-Bacchus, L. (2010). Cluster network and innovation under transitional economies: An empirical study of the Shaxi garment cluster. Chinese Management Studies, 4(4), 360–384.

Hoffmann, V. E., Lopes, G. S., & Medeiros, J. J. (2014). Knowledge transfer among the small businesses of a Brazilian cluster. Journal of Business Research, 67(5), 856–864.

Hsu, M.-S., Lai, Y.-L., & Lin, F.-J. (2014). The impact of industrial clusters on human resource and firms performance. Journal of Modelling in Management, 9(2), 141.

IBEF. (2013). MSMEs and The Growing Role of Industrial Clusters. Indian Brand Equity Foundation.

John, H. S., & Pouder, R. W. (2006). Technology Clusters versus Industry Clusters: Resources, Networks, and Regional Advantages. Growth and Change, 37(2), 141–171.

Karaev, A., Koh, S. C., & Szamosi, L. T. (2007). Journal of Manufacturing, Technology Management, 18(7), 818–835.

Khomiakova, T. (2007). Information technology clusters in India. Transition Studies Review, 14(2), 355–378.

Lai, Y., Hsu, M., Lin, F., Chen, Y., & Lin, Y. (2014). The effects of industry cluster knowledge management on innovation performance. Journal of Business Research, 67(5), 734–739.

Lamprinopoulou, C., & Tregear, A. (2011). Inter-firm relations in SME clusters and the link to marketing performance. Journal of Business & Industrial Marketing, 26(6), 421–429.

Lei, H.-S., & Huang, C.-H. (2014). Geographic clustering , network relationships and competitive Two industrial clusters in Taiwan. Management Decision, 52(5), 852–871.

Markusen, A. (1996). Sticky Places in Slippery Space : A Typology of Industrial Districts. Economic Geography, 72(3), 293–313.

Marshall, A. (1920). Principles of Economics (8th ed.). London: MacMillan.

Martinez, A., Belso-Martínez, J. A., & Más-Verdú, F. (2012). Industrial clusters in Mexico and Spain: Comparing inter-organizational structures within context of change. Journal of Organizational Change Management, 25(5), 657–681.

Maskell, P. (2001). Towards a Knowledge-based theory of the Geographical Cluster. Industrial and Corporate Change, 10(4), 921–944.

Morosini, P. (2004). Industrial clusters, knowledge integration and performance. World Development, 32(2), 305–326.

Morrison, A., & Rabellotti, R. (2009). Knowledge and Information Networks in an Italian Wine Cluster. S, 17(7), 983–1006.

MSME, M. O. (2016). Annual Report 2015-16. New Delhi: Government of India.

Narayana, M. R. (2007). Economic size and performance of dispersed and clustered small scale enterprises in India: Recent evidence and implications. International Journal of Social Economics, 34(9), 599–611.

Niu, K.-H., Miles, G., & Lee, C.-S. (2008). Strategic development of network clusters: A study of high technology regional development and global competitiveness. Competitiveness Review, 18(3), 176–191.

Niu, K.-H., Miles, G., Bach, S., & Chinen, K. (2012). Trust, learning and a firm’s involvement in industrial clusters: a conceptual framework. Competitiveness Review, 22(2), 133–146.

Oprime, P. C., Tristão, H. M., & Pimenta, M. L. (2011). Relationships, cooperation and development in a Brazilian industrial cluster. International Journal of Productivity and Performance Management, 60(2), 115–131.

Perry, M., & Tambunan, T. T. (2009). Re-visiting Indonesian cases for cluster realism. Journal of Enterprising Communities: People and Places in the Global Economy, 3(3), 269–290.

Planning Commission, G. O. (2012). Report of the Steering Committee on Handicrafts and Handlooms. New Delhi: Government of India.

Porter, M. E. (1998). Clusters and the New Economics of Competition Harvard Business Review. Harvard Business Review, 77-90.

Porter, M. E. (2000). Location, Competition, and Economic Development: Local Clusters in a Global Economy. Economic Development Quarterly, 14(1), 15–34.

Porter, M. E. (2007). Clusters and economic policy: Aligning Public Policy With the New Economics of Competition. Harvard Business Review, 1-10.

Pouder, R., & St. John, C. H. (1996). Hot Spots and Blind Spots : Geographical Clusters of Firms and Innovation. The Academy of Management Review, 21(4), 1192–1225.

Rocha, H. (2015). Do clusters matter to firm and regional development and growth? Evidence from Latin America. Journal of the Iberoamerican Academy of Management, 13(1), 83–123. Retrieved from https://doi.org/10.1108/MRJIAM-12-2013-0534

Russo, F., Clara, M., & Gulati, M. (2000). Cluster Development and Promotion of Business Development Services ( BDS ): UNIDO ’ s Experience in India.

Schiele, H. (2008). Location, location: the geography of industry clusters. The Journal of Business Strategy, 29(3), 29–36.

Singh, A. (2010). Clusters in India. New Delhi: Foundation for MSME Clusters.

Singh, A. K., & Shrivastava, R. L. (2013). Critical success factors of rice mills located in a cluster. International Journal of Productivity and Performance Management, 62(6), 616–633.

Solvell, O. (2008). CLUSTERS Balancing Evolutionary and Constructive Forces. Stockholm: Ivory Tower Publishing.

UNIDO. (2006). Making Clusters Work: UNIDO Methodology.

Varman, R., & Chakrabarti, M. (2011). Notes from small industry clusters: Making sense of knowledge and barriers to innovation. AI and Society, 26(4), 393–415.

Vasu, K. J. (MAY, 2014). Growth and Development of MSMEs in India: Prospects and Problems. Indian Journal of Applied Research, 125-128.

Wennberg, K., & Lindqvist, G. (2010). The effect of clusters on the survival and performance of new firms. Small Business Economics, 34(3), 221–241.

Yamawaki, H. (2002). The evolution and structure of industrial clusters in Japan. Small Business Economics, 18(1-3), 121–140.

Zhao, Y., Zhou, W., Hüsig, S., & Vanhaverbeke, W. (2010). Environment, network interactions and innovation performance of industrial clusters: Evidences from Germany, The Netherlands and China. Journal of Science and Technology Policy in China, 1(3), 210–233.


Refbacks

  • There are currently no refbacks.




Editorial Office:

Educational Research Multimedia & Publications,
S.N. 21, Plot No 24, Mirza Ghalib Road Malegaon Nasik,
Maharashtra India - 423203.
+919764558895 (whatsapp),
editor@scholarshub.net, www.scholarshub.net

Copyrights © 2010-2020 - ERM Publications, India     

This work is licensed under https://creativecommons.org/licenses/by-sa/4.0/