MANAGEMENT THROUGH CLUSTER DEVELOPMENT APPROACH

Guided By:
Prof.A.S.Mutrak

Group Details:
Damini Dube
 Introduction
In the UNIDO context, a cluster is understood to refer to a sectoral and geographical concentration
of enterprises and/or individual producers that produce a similar range of goods or services and
face similar threats and opportunities. A cluster encompasses enterprises (MSMEs, but also
larger firms) as well as their support institutions from the public and private sectors as well as
civil society. CLUSTER = FIRMS (PRODUCT + PLACE) + SUPPORT INSTITUTIONS The definition
thus highlights two essential features: Clusters consist of a critical mass of enterprises located in
geographical proximity to each other; and Enterprises in a cluster share a number of common
features as shown in figure 1.  
 Aims/Benefits of the Project
• As part of the “Consolidated Project for SME Development in India – Twinning and Related
Components”, which was initiated in 2006 and funded by the Italian Development
Cooperation.
• A component focused on “Cluster Twinning” was implemented that aimed at optimal
process for the linking two clusters across different countries at different levels of
development, i.e. a developed or mature and a developing or emerging cluster that were
nevertheless producing similar products.
• More specifically, cluster twinning was meant to enhance the competitiveness and
sustainability of existing but currently underachieving and not yet fully developed SME
clusters.
• This objective was to be achieved by forging twinning arrangements between Indian and
foreign clusters, by strengthening the capacities of firms within clusters through linkages among
the internal cluster firms and between the firms and their support institutions.
• This paper describes the overall project set-up and the component objectives.
Conclusion
Cluster Twinning – Key Issues and Methodological Implications Barring the SPX
activities of interaction with visiting delegations, “twinning” did not have any
significant impact in the cluster activities per se, although various suggestions
for the  methodological  approach  emerged  during  interaction. 
 It  was  felt  that  a  cluster  is  a complex identity consisting of various types of
firms and more often than not it is difficult to have the best of expertise in all
fields in a superior cluster to twin with an upcoming cluster. Thus twinning need
not  be considered as a process  between two clusters only. Hence the sources
of twinning, rather than coming fully from the supply side, may start with a
supply side intervention and then need  to  diversify. 
Thus while the Italian cluster  can be  a leading country in the twinning process,
one needs to go beyond  in the light of the demand side agenda. The twinning
needs may vary. Going by the cluster philosophy, here one needs to