Cluster Based Development Approach Instilling Innovation, Competitiveness among Local Firms and Contributing Towards Local Economic Development

Abstract

The importance of Cluster Based Development Approach (CBDA) in enhancing competitiveness of the Micro, Small and Medium Enterprises is getting increasingly recognised in India. Various State (Provincial) and Union Government and Development Organisations are extending support to further the cause of developing industrial and artisan clusters in the country. However, there are differences in the implementation strategy and attainment of outcome. This paper, without pre-supposing any stylised cluster framework tried to analyse the impact of CBDA in shaping competitiveness and ‘innovation drive’ of clusters. A study was commissioned in two select clusters and based in a completely different socio-economic setting which had witnessed implementation of CBDA. The findings suggest that there are similarities in the attainment of outcome. Upgrading in manufacturing and deepening specialisation propelled the ‘innovation drive’ of the brass parts cluster at Jamnagar. Design development, value addition and market development at Santiniketan improved competitiveness of the leather goods manufacturing units operating here. The collectivisation process and joint action ensured that the development momentum becomes sustainable in the long run. Through carefully nurtured activities and programmes, local firms became increasingly capable to meet accelerated competition in this era of globalisation. Lastly adoption of ‘decent work’ and inclusive growth supported the cause of Local Economic Development (LED).