WELCOME TO A PRESENTATION ON CLUSTER DEVELOPMENT

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WELCOME TOA PRESENTATION ON CLUSTER
DEVELOPMENT
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ROADMAP FOR THE PRESENTATION

• Section I Concept of Industrial Clusters the
  perspective for their development
• Section II Achievements and new initiatives
  in Cluster Development by the Ministry of SSI
  
• Section III Emerging issues

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SECTION- IINDUSTRIAL CLUSTERS THE PERSPECTIVE
FOR THEIR DEVELOPMENT
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WHAT IS A CLUSTER?
Cluster An agglomeration of SSI Units?
Unit
Unit
Unit
Unit
Unit
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Cluster A FORWARD AND BACKWARD LINKED
Production System?
Unit
Unit
Backward linkages
Forward linkages
Raw Material Suppliers
Selling Agent
Unit
Unit
Machinery Suppliers
Unit
Direct Customers
Unit
Unit
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Or does a Cluster have more to it..?
POLICY ENVIRONMENT
Commercial Service Providers (Designer, Testing
Laboratory, Transporter, Financier, Import Agents
etc.)
Production System
Forward linkages
Backward linkages
Unit
Unit
Raw Material Suppliers
Selling Agents
Unit
Unit
Direct Consumers
Machinery Suppliers
Unit
Unit
Unit
(Public Private) Support and Service Institution
INTERNATIONAL ENVIRONMENT
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DEFINITION OF A CLUSTER

• A Cluster is a geographic concentration of firms
  and their various service providers
• A Cluster is defined by
• a product/product range (same or similar)
• and a place (name of a city, town, village)
• A Cluster
• does not involve a complete industry or a sector
• must not be equated to an industrial park
  development concept

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THE INDIAN SSI CLUSTERS SCENARIO

• 3.57 million SSIs, across 7,500 products spread
  over the country
• 350 SSI and 2000 artisans clusters contribute to
  60 of exports
• Clusters provide natural agglomeration for
  wholesaling of support in the diversified
  panorama of individual needs, individual market
  pools and specific socio-economic context for the
  SSIs

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WHY CLUSTER DEVELOPMENT?

• Enables to reach out to many units at a time
• Provides environment for mutual learning
• Emerging from the felt-needs of the beneficiaries
• Self-sustainability for continuous support
• Clusters provide unique opportunity to address
  specific needs with specific solutions
• Clusters provide economies of operation of scale
• Increased impact and widening support from other
  support institutions
• Satisfies the needs of foreign buyers

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WHY CLUSTER DEVELOPMENT REQUIRES STATE
INTERVENTION?

• Cluster development is a long-term phenomenon
  with lower gains visible in short to medium term
• Common facilities and programmes need States
  effort
• Gains when they occur, are for sharing across the
  cluster

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METHODOLOGY OF CLUSTER DEVELOPMENT

• Selection of a Cluster
• Selection of a Cluster Development Agent
• Diagnostic study
• Trust building
• Preparation of action plan for intervention
• Approval of budget and further leveraging funds
• Implementation by trust building between Cluster
  Actors and CDA Between Actor and other Actors
• Monitoring and evaluation
• Handing over and exit

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SECTION-IIAchievements and new initiatives in
cluster development by the Ministry of SSI
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UPTECH SCHEME THE EARLY INITIATIVE

• Launched in 1998
• Aimed at development of selected clusters
• Initially, emphasis on Technology Upgradation
• Early interventions in Clusters of Ceramic Tiles,
  Bulk Drugs and Formulations, Foundry and Forging,
  Food Processing, Potteries etc.

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ASSOCIATION WITH UNIDO FOCAL POINT

• Ministry of SSI the official counterpart agency
  in India
• To provide a platform for sharing mutual learning
  best practices
• To design SME Cluster Development policies
  Tools
• National Level Steering Committee headed by
  ASDC(SSI)
• Interventions Direct as well as through State
  Govts. national institutions.
• Intervention in 4 Clusters completed, 3 nearing
  completion and 17 under implementation
• Assisting Ministry of SSI to set up a
  comprehensive CDP

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SECTORAL NATIONAL PROGRAMMES IN
COLLABORATION WITH UNIDO

• Industry demand driven programmes
• Cover Stone, Machine Tools, Toys and Lock
  Industry Clusters
• Active contribution in financing and
  implementation by UNIDO, State Govts, FIs,
  Industry Associations.
• Comprehensive support services in technology
  upgradation, market development, capacity
  building sustainability
• Visible Impact, leading to demand from new
  sectors
• New interventions planned for knitwear, bicycle
  parts

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SMALL INDUSTRY CLUSTERDEVELOPMENT PROGRAMME
(SSI-CDP)

• Ministrys own programme
• Envisages comprehensive coverage of the whole
  country
• Adopts a holistic approach
• Capable partner institutions welcome to join
• Leveraging of funds aimed at
• Stakeholders contribution participation
  encouraged

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ELEMENTS OF THE MINISTRY OF SSIs HOLISTIC
APPROACH

• Focus on building overall competitiveness of the
  clusters (rather than intervention on individual
  themes like credit/technology / export promotion
• Intermediaries also covered e.g. Business
  Development Services providers, raw material
  suppliers, machinery suppliers, selling agents
• Flexible covering wide variety of themes,
  actors/ideas as per cluster profile
• Dynamic responsive to changing needs

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STRENGTHS OF SSI-CDP

• Large Reservoir of Technical Manpower
• Valuable Experience of Hand Holding and BDS
  Providing
• Network Spread All Over the Country
• Inputs from UNIDO CDP
• Close Co-ordination with Stakeholders,
  State Govts. and Other
  Developmental Organisations

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SSI-CDP SELECTION OF CLUSTERS

• 21 clusters selected recently in consultation
  with State Govts, Industry Associations, etc
• Balanced coverage of sectors/products and
  backward areas
• Based on rating of clusters on essential
  parameters

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PARAMETERS FOR SELECTION OF CLUSTERS UNDER
SSI-CDP

• Distinct Technology product
• Potential for growth
• Contribution to employment
• Local leadership support
• Basic infrastructure
• Presence of capable institutions
• Recommended by other agencies
• Need for socio-environ interventions

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SELECTION OFCLUSTER DEVELOPMENT AGENTS

• Selected from large reservoir of experienced
  technical manpower available within SIDO
• Assessment of personality done on the desirable
  traits
• Ability to work diligently
• A flexible mindset
• Knowledge about the tools
• Experience in functional areas
• Exposure to other clusters
• Ability to be a follower

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TRAINING OFCLUSTER DEVELOPMENT AGENTS

• Training-cum-Resource Centre at NISIET
• In-house expertise being developed
• Other agencies running CDP may also benefit from
  our training facility
• Includes field work for conduct of diagnostic
  study preparation of Action Plan

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CLUSTER BASED CREDIT PLANNINGTHE LATEST
INITIATIVE

• 60 SSI Clusters selected spread all over India
  with regional balance
• Comprehensive Credit Planning
• Monitoring by SLBC
• Ministry of SSI and State Governments involved
  for focused development

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CLUSTER DEVELOPMENTTHE e-APPROACH
www.smallindustryindia.com
www.laghu-udyog.com

• Sub-sites to host
• list of SSI and rural artisan Clusters in the
  country
• comprehensive information on Clusters in India
• Preliminary/Diagnostic Reports and detailed maps
• e-Cluster News to be hosted
• list of reading material
• hyperlinks to other international sites and
  events on Clusters
• Expected to go on-line by the 1st week of Oct.
  2003 at Clusters.smallindustry.com

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PROPOSED BILATERAL PROJECTWITH GOVT OF ITALY
Mutual Credit Guarantee
Cluster Twinning
Investment Technology Promotion

• Pilot project launched on mutual credit
  guarantee by CGTSI

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PROJECT FOR DEVELOPMENT OF DIESEL ENGINES AND
ENGINEERING INDUSTRY CLUSTER

• Objectives Technology upgradation, improvement
  in quality and productivity, developing data base
  on BDS providers, networking and formation of
  consortia, improved marketability
• Activities diagnostic study, awareness seminars,
  developing resource persons, enterprises
  upgradation programmes, technological workshop,
  individual counselling etc.
• Financial support DC(SSI), ICICI, Industry
  Association
• Implementation EDII, Ahmedabad

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PROJECT ON PROMOTING ENERGY EFFICIENCY IN
HAND-TOOLS SSI SECTOR

• Contributing implementing partners Ministry of
  SSI, UNIDO, SIDBI and Industry Associations
• Budget US 7,50,000
• Aims at strengthening the competitiveness of
  energy intensive and export oriented
  forging/hand-tools SSI sector in India
• Strategy
• Adoption and promotion of energy efficiency and
  clean technologies, strengthening policy and
  institutional structure, supporting capacity
  building, developing and international marketing
• Jallandhar and Nagaur to be the key Clusters,
  experiences to be disseminated to Tumkur cluster
  and elsewhere

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PROPOSED PROGRAMME FOR TECHNOLOGY UPGRADATION AND
GHG EMISSION ABATEMENT IN FEROZABAD GLASS
INDUSTRY CLUSTER

• Aims at strengthening technological and
  manufacturing capacity through adaptation and
  demonstration of energy efficient technologies
  for
• reduction of Green
• House Gases Emission
• improvement in working
• environment and health
• of workers
• ensuring sustainability
• in the context of
• globalization

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SECTION-IIIEMERGING ISSUES
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RAPID GROWTH IN THE NUMBER OF AGENCIES WORKING
FOR CLUSTER DEVELOPMENT
Interventions in 162 clusters
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HOLISTIC PERSPECTIVE IS NECESSARY

• Must cover hardware as well as software
• Units as well as groups of SSIs need to be
  vitalized
• Divergent themes (as per need of the cluster)
  must be covered

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STRENGTHENINGINDUSTRY ASSOCIATIONS
LISTING
RATING
ASSOCIATIONS
RECOGNITION
AWARDS
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NEED FOR EXPERIENCE SHARING

• Mutual learning among implementing agencies in
  India
• Learning from clusters outside the country
• Repository of experiences and observation
  necessary at the national level

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NEED FOR DOCUMENTATION OF INFORMATION

• About clusters and status of socio-economic
  environment within clusters
• Highly useful for programme implementing agencies
  as well as BDS providers
• A spin offs possible on credit technology,
  quality, infrastructure etc.by customizing
  services to the cluster need
• e-Management of information

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BDS DEVELOPMENT

• Business Development Services (BDS) providers
  need and deserve recognition, support linkages
• Include private BDS providers also

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THANK YOU