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RFCD 2011: Dr. Tamal Sarkar:Foundation for MSME Clusters: Cluster Business Case

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RFCD Conference @ Arthur Lok Jack GSB - November 2011

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RFCD 2011: Dr. Tamal Sarkar:Foundation for MSME Clusters: Cluster Business Case

  1. 1. Cluster Development Approach – A Business Case
  2. 2. Clusters & How can clusters benefit? <ul><li>Joint Action that converts investment into riskable steps </li></ul><ul><li>Promotion of passive cooperation that creates enabling condition </li></ul><ul><li>Appropriate value chain linkage </li></ul><ul><li>Cluster to cluster linkage </li></ul>
  3. 3. Some of the critical working conditions <ul><li>Start through pain points and issues of immediate benefits – create trust </li></ul><ul><li>Create trust and go to complex issues </li></ul><ul><li>Work with homogenous groups </li></ul><ul><li>Create flow of strategic service providers and products </li></ul><ul><li>Empower local interest groups </li></ul><ul><li>Trained handholding organizations that spend the necessary time </li></ul><ul><li>A strong policy/schematic support </li></ul>
  4. 4. Types of Benefits that a CDP can generate without hampering individual business goal <ul><li>Very low cost skill development </li></ul><ul><li>Creation of employment </li></ul><ul><li>Increased turnover </li></ul><ul><li>Low cost financing and its monitoring </li></ul><ul><li>Very low cost quality up-gradation </li></ul><ul><li>Value chain up-gradation </li></ul><ul><li>Poverty alleviation </li></ul><ul><li>Mass reduction in energy and pollution </li></ul><ul><li>Empowerment </li></ul>
  5. 5. Some countries where it has been tested successfully <ul><li>Italy – Manzano Chair Cluster (natural – no programmes) </li></ul><ul><li>San Daniele Ham – Self Regulation </li></ul><ul><li>Pakistan – Challenges of USFDA to Sialkot </li></ul><ul><li>India – Tirupur Knitwear Cluster - infrastructure </li></ul><ul><li>India – In the handloom (handicraft) cluster of Chanderi, wages increased by 50 to 100 per cent through creation of appropriate value chain linkage (2005) </li></ul><ul><li>India – In the cashew cluster of Ganjam, technology change led to 12% increase in number of units, 24% increase in turnover and 7% increase in employment (2010) </li></ul>
  6. 6. Case Study of 7 Clusters for a 3 Year Intervention by UNIDO Additional Domestic Sales Additional Exports Additional Savings Generated Additional Quality Accreditation New Interna-tional market create Infrastructure creation (C)/ Revival (R) Cluster USD Million No. of firms USD Million No. of firms USD Million No. of firms No. of firms Jaipur (artisanal) 0.12 75 1.00 14 2 Show Room Ludhiana (Textiles) 10.00 25 1.20 55 Apparel Park (Planning) Pune (Food) 0.02 20 9 Food Laboratory Tirupur (Textiles) 10.00 15 0.80 45 16 (24) Ahmedabad (Pharma) 2.00 21 1.50 9 0.10 70 32 (60) 1 Pharma Park (Planning) Ambur (Leather) 0.03 30 0.13 5 0.09 25 6 1 Infrastructure Bangalore (M. Tools) 1.10 50 0.17 40 1 Total 3.25 174 22.63 68 2.34 235 63 (99) 4 3 plus 3 planned

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