1. What is a cluster?

A cluster is a sectorial and geographical concentration of micro or small & medium enterprises (SMEs), faced with common opportunities and threats. Such a configuration can:

·  Give rise to collective benefits, for example through the spontaneous inflow of suppliers of raw materials, components and machinery or the availability of workers with sector specific skills.

·  Favor the creation of providers of specialized technical, administrative and financial services;

·  Create a conducive environment for the development of inter-firm co-operation as well as of co-operation among public and private institutions to promote local production, innovation and collective learning.

2.     How many clusters are there in India?

India has largely two types of clusters, Industrial (SME) Clusters and Artisanal Clusters. There are around 400 SME clusters and 3500 Artisan Clusters in India.

3.     Why are Clusters Important in India?

Clusters have been found to be important in any economy, all over the world. In India alone they contribute up to 60% of India’s manufactured exports. They also have a significant workforce and have a high share in employment generation. 

4.     What are the advantages of clusters?

Clustering leads to an environment of positive competition in the industry. There is an enhanced co-operation between the industry members and a common shared knowledge base. It thus helps in building the competencies of all the people involved in the process. It generally leads to technical up gradation and improved quality of products. There is also better market management from the industry members.  

5.     What is the need for clustering in India?

India is a developing economy which is moving in a positive direction of economic growth. But many small industries are lagging behind in this scenario of growth. Networking such industries into competitive clusters would lead to :

·      Overcoming weak capital base and low scale potential.

·      Faster decision making among industry members.

·      Higher responsiveness to industry demands.

·      Faster information diffusion.

·      A more flexible structure.

·      A cost effective team.