Foreword

Dear Readers,

This issue provides useful updates on the cluster development programmes of three Indian States: Andhra Pradesh, Madhya Pradesh and Gujarat. The case study takes us to Tamil Nadu (South India) where the vibrant cluster of Tirupur contributes to one third of the total apparel exports from India. A recent exposure visit organised by UNIDO in collaboration with the Tirupur Exporters Associations and the Textiles Committee, proved the importance of efficient industrial associations and support institutions in responding to the cluster’s changing needs.

Enjoy your reading.

Elisabeth Beer
Editor

Coming up...

INSME-WASME International training on "Management of Innovation and Technology Transfer" - October 2004, New Delhi

The International Network for SMEs (INSME), in partnership with the World Association for SMEs (WASME), has launched an international training course on "Management of Innovation and Technology Transfer" from 12th to 15th October 2004. The new venue is UNAPCTT, New Delhi.

Its aim is fostering Asian intermediaries' capacity to effectively manage the technology transfer process by providing them with theoretical and practical knowledge on issues like the assessment of technology needs, technology search, IPR management and financing tools for innovative companies.

For more information, please contact:
V. N. Prasad (WASME Secretariat) at wasme@vnsl.com
Tel: +91 120 2515241
or visit www.insme.org - www.wasmeinfo.org

News in Brief

Cluster Programme in Andhra Pradesh

The Government of Andhra Pradesh has initiated a cluster development programme for 14 clusters in 14 districts. The production sectors are varied and range from mango jelly in east Godavari District to plastic in Nalgonda; from readymade garments at Rayadurg, Ananthapur to electronics at Kushaiguda, RangaReddy Dist. The Development Commissioner of Small Scale Industry supports this programme under the small industry cluster development programme. Cluster Development Organisations (CDO) have been selected by the State Govt and in turn CDOs have recruited/ identified their Cluster Development Agents (CDA), who will be based in the clusters. The first phase of training of CDAs was conducted by the National Institute for Small Industry Extension Training (NISIET, Hyderabad), with support from UNIDO faculty, in June 2004.

The Andhra Pradesh Govt has nominated two monitoring agencies, one at the state level and one at district level for monitoring and guiding cluster work . The state Govt officers who will be a part of the district level committee were sensitized on cluster approach through a 2-day training programme. Monitoring officers from technical organisations such as APITCO, CIPET AND NSIC also took part in the training.

In the meantime the State Govt is actively considering bringing in a cluster development policy wherein incentives are planned to encourage joint initiatives in the cluster and for strengthening associations and consortia. For the first time Govt is also considering bringing in incentives to support joint national and international marketing efforts including common brand building.

For more information, please contact: Lisa Beer, UNIDO, at unido@del3.vsnl.net.in

Cluster Development Programme Gives New Life to Ceramic Industry in Gujarat State

The Central Glass & Ceramic Research Institute (CGCRI), Naroda Centre, Ahmedabad, acts as the Nodal R&D Institution implementing the Ceramic Clusters Development Programme (CCDP) launched by the Govt. of Gujarat State in 2000. The Programme covers four ceramic clusters namely Morbi-Wankaner, Thangadh, Ahmedabad and Himatnagar where about 480 Small and Medium Enterprises (SMEs) produce crockerywares, sanitarywares and ceramic tiles. On account of the CCDP, the ceramic industries in those four clusters in Gujarat State have witnessed tremendous progress in areas like improvement in productivity and quality, reduction of wastes at different stages of production, cost cutting in production and improvement in export potential as well as effecting environmental protection. The ceramic industries in the clusters have not only been able to reduce their wastes to the tune of 60 to 80% at the different stages of production but also over 60% of the units achieved product quality standard according to the requirements of BIS/EN specifications. About 90 ceramic units in total have also obtained ISO 9000/BIS accreditation.

Being encouraged with the end result, the Govt. of Gujarat and the Naroda Centre of CGCRI have renewed their ties for another two years till 2006 to give the ongoing ceramic cluster development programme a better end by enhancing linkages with UNIDO and business development support (BDS) providers. The CCDP methodology adopted by CGCRI, in Gujarat State can be considered a success story and a model for initiating CDP in Ceramic sector in other States in India.

For more information, please contact: Dr K.N. Maiti (CGCRI) at siccgcrinc@icenet.net

New schemes for handlooms and handicraft clusters in Madhya Pradesh

The Govt of Madhya Pradesh recently approved three schemes for the development of handloom and handicraft clusters. NGOs, Self-Help Groups and Local cluster actors are the beneficiaries of these schemes. Moreover, in order to improve the effectiveness of the program at the grassroots level the Ministry of Rural Industries has devised a system of decentralized planning and monitoring system. District level (in some cases cluster level) plans have been prepared to. Chief Executive officer of the each department will be responsible for the preparation of and monitoring of these plans every year. The implementing officers at the grassroots level will undergo suitable training for the effective implementation of the program.

For more information, please contact: Lisa Beer, UNIDO, at unido@del3.vsnl.net.in

A team from Bangladesh at the Southern India Review Meeting in Pune

The meeting in July about the clusters projects in Southern India implemented by partner institutions provided an interesting insight into how the various Cluster Development Executives from different organisation have a remarkable work. Five observer participants from the KATALYST team (Bangladesh) were also present to learn and share their experiences. KATALYST is into poverty alleviation through BDS initiatives.

For more information, please contact: Lisa Beer, UNIDO, at unido@del3.vsnl.net.in

Capacity Building initiative for NRC in NISIET

At the request of the office of Development Commissioner Small Scale Industry, 18 Cluster Development Executives from SIDO along with 4 National Resource Centre (NRC) faculty members participated in a 4 days refresher programme coordinated by UNIDO Focal Point in Hyderabad, which was followed by the exposure visit to the cotton hosiery cluster of Tirupur.

For more information, please contact: Lisa Beer, UNIDO, at unido@del3.vsnl.net.in

Clusters at International Level: A difficult game with high stakes

Instances of cooperation between clusters at international level are few, and seldom successful. A series of meetings on this topic organised by the French agency DATAR and the French Club of Industrial Clusters (CDIF) have led to a better understanding of the mechanisms (interests, hindrances, key factors for success) involved in international partnerships between clusters.

The CDIF has set up for its members a contacts file of clusters and local agencies involved in international economic partnerships, with the objective of identifying the technological competence of different countries.

To view the whole article, please visit http://www.districts-industriels.com/newsletter.php or contact
CDIF at xavierroy@wanadoo.fr

A Case Study

Lessons from the exposure visit to Tirupur

Tirupur, a small industrial town situated 60 kms away from Coimbatore in South India is one of the most successful and vibrant clusters in India. It contributes to one third of the total apparel exports from India.

The cluster comprises of very large number of small units, most of which are truly small, compared to national and international standards. There is a high degree of subcontracting relationship among producers due to the nature of the production process that easily blends itself into finely subdivided production stages (e.g. fabrication to wet processing, processing to garmenting, etc). Industry associations are active in supporting firms by acting as for a to settle intra and inter firm disputes, assist them with procedural formalities, provide access to information and liaison with Government institutions.

The key factors behind the development of the cluster have been proactive attitude towards product marketing, adoption of the state-of-the-art technology, inter-firm division of labour and a responsive support framework.

UNIDO implemented a cluster development programme in Tirupur from 1997 to 2001 focusing on two broad types of initiatives. The first kind of initiatives aimed to improve the capabilities of firms themselves, especially in the areas of quality, design, productivity, skills, and waste minimisation, pollution. The other set of initiatives focused on capacity building of industrial associations and support institutions to foster linkages, enhance availability of Business Development Services (BDS), and promote cluster-to-cluster cooperation..

Last July, UNIDO CDP organised together with Tirupur Exporters’ Association (TEA) and the Textiles Committee an exposure visit to Tirupur focusing on the new capacities industrial associations such as TEA, the South India Hosiery Manufacturers Association (SIHMA) and Tirupur Dyers’ Association (DTA), support institutions like the Textiles Committee and BDS had to develop in order to match cluster’s changing needs..

Facing new challenges and becoming internationally competitive has meant developing a new vision for these institutions, which triggered often-painful restructuring processes and led to the development of the necessary skills before reaping the benefits of a more apex positioning in the cluster..

The visit was probably the biggest in the history of any cluster! There were 20 Cluster Development Executives from SIDO, 4 faculty members from National Resource Centre of NISIET, 20 industry association representatives, 6 policy makers and 5 UNIDO personnel, for a total of about 55..

In 2 days exposure visit the participants listened to presentations by TEA, SIHMA Institute and Textiles committee, the participants visited the Textiles committee testing lab, the industrial park, the training institute, the Exhibition center, a common effluent treatment plant and some firms. .

The visits and interactions made it clear that cluster work needs to be taken through association platform whereas implementing agencies play mainly a catalyst role. Therefore, strengthening the association is one of the very important tasks of a Cluster Development Agent or Executive. An efficient association’s leadership is a fundamental: dedication, commitment, trusts are the key characteristics. Discipline and the above characteristics are equally important for secretariat of an association. The secretariat should be reliable and deliver services fast: this is the best guarantee for winning trust of its members. Moreover, performing associations don’t wait for Government support: they start their projects with their own money. However, they need to maintain excellent relationships with institutions. Tirupur experience showed that it is advisable for associations to create separate legal entities for projects they execute. After initial handholding, the legal entity becomes autonomous. A cluster can count many different associations in a cluster; this is all the more useful if firms belong to different parts of the value chain. In the case of Tirupur, the different associations were complementing each other creating synergies..

As per the consortia, its members should not bear conflicting interests. The importance of local availability of BDS for the growth of a cluster was also underlined. Finally, participants were made aware about the role of associations in infrastructure building. .

The exposure visit was very successful in providing practical examples of well-functioning associations and support institution and about their interactions with firms and among themselves. As a follow-up of this event, several industrial associations are now planning further visits so as to spread the inspiring success story of Tirupur among their members.

For more information, please contact: Lisa Beer, UNIDO, at unido@del3.vsnl.net.in