Industrial Clusters

Topics: Business cluster, India, Cluster analysis Pages: 5 (1767 words) Published: April 25, 2013
1. Definition of industrial clusters....?
2. Objectives
3. Features
4. Advantages
5. Disadvantages
6. In which area which clusters are used.....?

A geographical concentration of interconnected companies with close supply links, specialist suppliers, service providers, and related industries and institutions; for example, Birmingham-Aston-Wolverhampton-Walsall in the British West Midlands, or the UK met cluster, which extends from Lancashire and Yorkshire to London and south-east Britain.

Industrial clusters arise because of clustering and external agglomeration economies; supportive local social structures and networks of exchange; institutional embeddness; and lowered transaction costs of transport and communications, all interacting with the benefits of existing supply locations in close proximity. Existing business clustering strongly encourages further concentration. Clustered concentrations have significant competitive advantages in global markets.

Clusters are geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions in a particular field that are present in a nation or region. Clusters arise because they increase the productivity with which companies can compete. The development and upgrading of clusters is an important agenda for governments, companies, and other institutions. Cluster development initiatives are an important new direction in economic policy, building on earlier efforts in macroeconomic stabilization, privatization, market opening, and reducing the costs of doing business. Two cluster-related projects are currently underway at the Institute: the Cluster Mapping Project and the International Cluster Competitiveness Project. The Cluster Mapping Project has assembled a detailed picture of the location and performance of industries in the United States, with a special focus on the linkages or externalities across industries that give rise to clusters. Extensive data from the project is now available. The International Cluster Competitiveness Projectextends this approach internationally, examining the patterns of international trade through the lens of clusters.

Definition of Clusters
A cluster is defined as a concentration of enterprises producing same or similar products or strategic services and is situated within a contiguous geographical area spanning over a few villages, a town or a city and its surrounding areas in a district and face common opportunities and threats. Accordingly, we have not considered activities which are of daily use services and/or where scope for joint action or passive cooperation is minimal or where the product grouping is too wide for common threats/opportunities to emerge. Clusters may be broadly divided into the following broad categories: Industrial cluster: Having at least 100 enterprises and/or a minimum turnover of Rs.100 million. Units in these clusters are functioning from factory premises with hired workers. Such clusters have a mix of micro, small, medium, few large and at times all micro units.  Micro-enterprise clusters: Such clusters are all micro units and are mostly done by household based units by mostly utilising home based workers. These include artisanal (handicrafts and handloom) and other micro enterprise clusters. A handloom cluster has a minimum of about 500 looms and that of handicrafts and other microenterprise clusters is estimated to have around 50 units.  Methodology and Evolution for Identification of Clusters

Methodology: Globally there are two methods of cluster identification viz. statistical method and primary method. Literature on cluster identification methodology also supports the combination of both methods because of the limitation of both the methods. Most industrially developed countries, particularly USA, UK and Italy have used statistical methods that tend to measure the sectoral and geographical intensity of enterprises drawn from...
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