Making Micro, Small and Medium Enterprises Competitive: Cluster Development Methodology

Abstract

Micro, Small and Medium Enterprises (MSMEs) account for the majority of firms in most countries and prominently figure in their economic and social policies. With an objective to encourage inclusive/sustainable growth, UN Sustainable Development Goals promote/encourage the support to SMEs; that also addresses their concern of productive employment and decent work for all. As per the World Trade Report 2016 (‘SMEs in international trade: Stylized facts.’ World Trade Report 2016, Levelling the trading field of SMEs), in majority of countries, SMEs play a significant role in terms of providing employment, especially in developing/transitional economies.

Annexure

Development Organizations in India for CDM

Name of the Development Organization	Interventions	Verticals
Foundation for MSME Clusters	Soft	Innovation, Energy
IL&FS—Cluster Development Initiative	Soft & Hard	Infrastructure, Skill Development
Cluster Pulse	Soft	IT, BDS
Clusterkraft	Soft	IT, BDS
SIDBI-PMD	Soft	Technology, BDS
The Energy Resource Institute—TERI	Soft & Hard	Energy
Entrepreneurship Development Institute—EDI	Soft	BDS
Andhra Pradesh Industrial and Technical Consultancy Organization Ltd. (APITCO)	Soft	BDS

The development agencies have been instrumental in setting up industrial parks (textiles, leather, food processing) and implementing various programs in collaboration with national (DC MSME, DST, Government of India) and multilateral agencies (DFID—UK, GTZ—Germany) during last decade. Gradually, transition happened and new interventions took place in new verticals (innovation, energy, IT implications, etc.) in industrial clusters after initial emphasis on poverty alleviation during implementation of UNIDO project in different artisanal and handicraft clusters. Following few programs have been the highlights of a large number of interventions undertaken in different clusters by various agencies in these industrial clusters:

• i. ‘Promoting Innovative Clusters’ program funded by DST and implemented by FMC (2008–11) and skill up-gradation of various cluster development agents nationally and internationally (Pharmaceutical, Foundry, IT clusters, skill up-gradations in Iran and Africa).

• ii. SIDBI-BDS program funded by DFID (2009–12) in 23 clusters in four different zones of the country (Pharmaceuticals, Leather, Carpet, Pumps, Foundry clusters).

• iii. IL&FS-CDI set up various industrial parks (textile, leather clusters) and skill development programs in collaboration with various ministries in government (MOT/MOFPI/MOHRM & NSDC).

• iv. Clusterkraft’s work in the area of promoting IT in MSMEs (2008–11) and similar interventions by Clusterpulse (textiles, machinery, and other clusters).

• v. DSC MSME has set up 150 common facility centers (CFCs) in different clusters across the country.

• vi. Ministry of Food Processing has been implementing programs in 22 clusters.

• vii. DST has various schemes under PRISM (earlier TePP).

TERI & GIZ have collaborated with the Ministry and FMC for programs in the Energy Sector (Foundries clusters across the country) to source technology.