Cluster Approach for Efficient Industrialization

Abstract

Experts in many countries and development agencies have defined cluster-based on respective reality of economy and industrialization. In Bangladesh, the SME Foundation has for the first time defined cluster in Bangladesh as a geographical location (five square km) having 50 or more manufacturing or service-providing units producing similar goods or services along with its backward and forward linkage industries. All the units share common strengths, weaknesses, opportunities and threats. Internationally, Professor Michael E Porter of Harvard Business School has defined a cluster as a 'geographically proximate group of interconnected companies, suppliers, service-providers and associated institutions in a particular field, linked by externalities of various types'. The United Nations Industrial Development Organization (UNIDO) has defined industrial cluster as 'geographic and economic concentration of manufacturing activities which produce and sell a domain of interrelated and complementary products and have common problems and opportunities'. Currently, a few experts consider that a cluster shall be a concentration of similar manufacturing units located at a particular place at the same time. They shall be horizontally or vertically linked to each other. Networking, agglomeration, and geographic proximity are considered to define a cluster.