What is Cluster Development ?
A cluster refers to a geographic area where numerous economic enterprises are concentrated, specializing in producing a particular product or offering a complementary range of products and services. Clusters of micro and small enterprises are typically located across multiple villages, towns, or cities, and their surrounding areas. These clusters are identified based on the specific ‘product/service’ offered by the enterprises and the ‘place’ where they are situated.
In a cluster, the economic enterprises responsible for producing the primary product or service are not the only key players. Raw material providers, sub-contractors, buyers, exporters, machinery suppliers, support institutions, regulatory agencies, consultants, common facilities, transporters, and other service providers play a vital role in facilitating both direct and indirect production within the cluster. Additionally, various interest groups such as business associations, self-help groups, cooperatives, and NGOs may promote the business interests of different enterprise groups within the cluster. Collectively, these entities are known as cluster stakeholders.
The Cluster Development Approach has a collaborative alignment with:-
Selection of Cluster: To secure an efficient and comprehensive cluster development program, it’s critical to implement adiscerning selection framework. This framework should be based on factors such as the cluster’s significance, potential for growth, feasibility, and sustainability.
Diagnostic Study: It is imperative to conduct a participatory study to gather dispersed knowledge, which offers insights into potentials and constraints faced by a cluster, as well as the presence of linkages and support mechanisms. Through this approach, trust is fostered with local actors, securing their positive involvement in the cluster development program.
Trust Building: Creating an environment of trust is vital to develop a feasible action plan that garners support from businesses, service providers, and support agencies within a group.
Action Plan: An effective action plan for a cluster comprises more than merely addressing the specific demands of the various cluster actors. It serves as a roadmap for the development and nurturing of enduring relationships among the actors within a particular cluster. Moreover, it plays a vital role in achieving tangible outcomes.
Implementation: The execution of the action plan encompasses more than just achieving the targets established within it. It presents an opportunity for a fundamental shift in the manner in which cluster stakeholders engage with one another.
Monitoring and Evaluation: Incorporating quantitative measurements of the outcomes of implemented activities is essential in promoting best practices and building trust. This task is particularly challenging in SSI programs, as it requires the identification of subtle and gradual changes in the relationships among cluster stakeholders.
1. Identifying Opportunities: Understand the local resources, skills, and potential economic activities in the rural area. Identify sectors where clustering could lead to synergies and increased competitiveness, such as agriculture, agribusiness, or artisanal crafts.
2. Community Engagement: Involve local communities in the cluster development process. Understand their needs, aspirations, and available resources. Community participation fosters a sense of ownership and ensures that the cluster aligns with the local context.
3. Value Chain Integration: Encourage the integration of various stages of the value chain within the cluster. This can lead to increased efficiency, reduced costs, and improved market access for rural producers.
4. Infrastructure Development: Address infrastructure gaps that may hinder cluster development, such as transportation, energy, and communication facilities. Improved infrastructure can enhance connectivity and accessibility for businesses in rural clusters.
5. Skills Development: Invest in training and skill development programs for the local workforce. Building human capital ensures that the cluster’s businesses have the necessary expertise to thrive and innovate. Lot of Government organizations is initiating skill development programs for the clusters.
6. Technology Adoption: Integrate technology to enhance productivity and competitiveness. This could include adopting modern farming techniques, implementing e-commerce platforms for local products, or leveraging digital communication for business networking.
7. Access to Finance: Facilitate access to financial resources for small businesses within the cluster. This might involve establishing local financial mechanisms, microfinance initiatives, or connecting businesses with funding opportunities.
8. Marketing and Branding: Develop strategies for marketing and branding the cluster’s products or services. Highlighting the uniqueness and quality of rural products can attract a wider market and increase demand.
9. Sustainability Practices: Emphasize sustainable and environmentally friendly practices within the cluster. This not only aligns with global trends but also ensures the long-term viability of rural businesses.
Different organization who are initiate cluster development programme in the North East States are Inidan Institute of Entreprenurship, NABARD, Entreprenurship Development Institute of India, United Nations Industrial Development Organization, SFURTI etc.
Some Examples of Clusters implement by the organization are:
- Payranga Eri Cluster, Boko. Assam
- Bogulamari Jute Cluster, Dhubri,Assam
- Umden Eri Cluster,Meghalaya
- Aizwal Bamboo Cluster
- Kauna Cluster, Manipur etc
Cluster development in rural areas requires a holistic approach, addressing economic, social, and environmental aspects. Collaboration among local stakeholders, including government agencies, businesses, and communities, is crucial for the success of rural cluster initiatives.