Cluster Development Approach Research Articles

Business Analytics in Steel Product Fabrication Cluster

Forty micro and small steel products manufacturing enterprises in Salem District of Tamil Nadu, South India faced problems in value addition of the steel products like windows, grill gates, truss work and panel boards manufactured by them. They formed M/s Salem Steel Cluster Pvt Ltd; Salem, a special purpose vehicle, in 2012 by getting funds from the Government of Tamil Nadu and the Government of India through the Tamil Nadu Small Industries Development Corporation under Micro Small Enterprises Cluster Development Programme of Ministry of Micro, Small and Medium Enterprises, Government of India. The objective is to find the physical and financial performance of the Steel Product Fabrication Cluster (SPFC) before and after Cluster Development Approach (CDA) to find the productivity of the cluster by taking independent variables like number of units, employment and production and dependent variable like turnover, and to find the performance of SPFC before and after CDA. To find business analytics models like Diagnostic Analytics, Descriptive Analytics, Inferential Analytics, Predictive Analytics, Prescriptive Analytics and Decision Analytics. The methodology adopted is by collecting primary data like number of units, employment in numbers, production in crores and turnover in crores before and after CDA and analysing using Compound Annual Growth Rate, Descriptive Analysis, Correlation Analysis, Trend Analysis, Regression Analysis, Structural Equation Modelling and T-Test. There is a Difference in Difference between controlled units which have not adopted CDA and experimental units which have adopted CDA, where there is an increase in number of units, employment, profit and turnover. To conclude, there is an increase in number of units, employment, production and turnover after CDA when compared to before CDA, which leads to an increase in productivity thereby Sustainable Development Goals of 1, 4, 5, 8 and 9 are achieved.

Sustainable and Smart Manufacturing in Paramakudi Engineering Cluster

The Paramakudi Engineering Cluster which is an induced cluster was formed during 2018 at Small Industries Development Corporation (SIDCO) Industrial Estate, Ramanathapuram District, Tamil Nadu with 32 Micro- and Small-Enterprises has got old machineries like lathe, drilling machine, welding machine, 40 T power press. Due to the non-availability of the latest machinery, they approached the Ministry of Micro-, Small- and Medium-Enterprises (MSME), Government of India (GOI) and got grant from GOI, Government of Tamil Nadu (GOTN), then they put special purpose vehicle (SPV) contribution, got Term loan from Canara Bank and got latest machinery like shearing machine, laser cutting machine, compressor with drier, Computerised Numerical Control (CNC) press brake, Power Press, Electric Overhead Travelling (EOT) crane etc and put-up Common Facility Centre (CFC). The objective is to study the capacity utilisation (CU) of machineries and service charges (SC) collected and to study on the financial performance of enterprises on revenue generated ( Rg) and gross profit ( Pg) before and after Cluster Development Approach (CDA) in CFC. The methodology was adopted by collecting the above primary data and analysing using Compound Annual Growth Rate (CAGR), descriptive analysis, correlation analysis, trend analysis, regression analysis, structural equation modelling and t-test. The annual average increase in CU of machineries during various time period T from t = 1 to 4 i.e., from 2017-18 to 2021-22 (Tt) is 14.93 % [CU = 9.08 + 14.93 Tt, p = 0.23, R2 = 0.59] and an annual average decrease in service charge collected is ₹107.5 [SC = 1100–107.5 Tt, p = 0.002, R2 = 0.99]. One unit increase in CU leads to 4.4 unit decrease in service charge collected [SC = 1036.29–4.41 CU, p = 0.20, R2 = 0.63]. There is an increase in the mean value of Rg and Pg. By adopting a CDA productivity of Paramakudi Engineering Cluster is increased and also competitiveness of the enterprises in the cluster is increased to move up in the value chain. Due to CDA, MSEs in Paramakudi Engineering Cluster have adopted smart and sustainable manufacturing to reduce cost and increase profit.

Work Force Efficiency in the Safety Match Clusters

India, one of the largest manufacturers of matchboxes, produces about 4 crore boxes per day. There is a need to study the technical efficiency of the workforce of the Safety Match Clusters (SMC) in Tamil Nadu. The objective is to study the physical and financial performance, and technical efficiency of four SMCs in Tamil Nadu. The methodology consists of collection of primary data for various periods from 2016-17 to 2020-21 and secondary data from SMC officials. The input variables are Units, Employment and Investment, whereas the output variables are Production and Turnover. Data was analysed for ascertaining the technical efficiency of 4 SMCs before and after the implementation of the Cluster Development Approach (CDA), using the output-oriented Banker, Charnes, and Cooper (BCC) model of DEA, output-orientated Malmquist DEA, and stochastic frontier analysis. The study concluded that three clusters are highly efficient, but one needs improvement in workforce and investment to increase turnover. The Malmquist Index Summary of Firm Means indicates an efficiency change of 22% and pure efficiency change of 26%. As per the stochastic frontier equation To=-10.51-0.90En+4.34 In, with a unit increase in employment, the turnover decreases by 0.9 units which is insignificant, and for every unit increase in investment on machinery, the turnover increases by 4.4 units which is significant. The workforce needs further improvement for one firm, whereas the other three are highly efficient.

Impact of cluster-based technology transfer on profitability of ginger cultivation by small hill farmers of Shivalik region of Haryana

Ginger (Zingiber officinale) is an important commercial crop of Morni hills of Haryana Shivaliks. There was considerable gap between the actual yield and income than the potential indicated by successful growers. In an attempt to bridge this gap by adopting a cluster development approach, 32 ginger growers of a hill village were formed as a common group to implement the recommended package of practices based on soil test analysis and adopted over one bigha (1/12th of hectare) of 32 demonstration plots and one bigha was kept as untreated control with farmers’ normal practice. The beneficiary farmers were provided trainings, exposure visits and interaction with agricultural experts. The average fresh ginger rhizome production in treated plots was 11.19 t ha-1 as against 6.97 t ha-1 in control plots. While 84 percent farmers obtained an yield of 11 to 12 t ha-1, yield recorded by remaining farmers ranged from 7.44 to 9.63 t ha-1 thus indicating scope of further increase in production. The ratio between seed used and rhizome yield was taken as an indicator of yield potential and this was 4.04 in case of treated plots and 2.65 in case of control thus registering overall increase of 52.4 percent. The total gross and net returns were Rs 996678 and 395925 ha-1 and the average cost of cultivation was Rs 600753 ha-1. The overall benefit cost ratio was 1.66. However, in case of control plots, the average gross and net returns were Rs 532800 and Rs 106972 with a benefit cost ratio of 1.22. In the cluster based approach, reduction in input costs and collective marketing resulted in better dividends.

Updating the Open Innovation Concept Based on Ecosystem Approach: Regional Aspects

The intensification of innovation processes in Russia is a challenging task that requires a continuous search for solutions to make possible the many required changes in economics. We consider the major factors needed to advance an innovative activity at all levels in the national economy to have a freely exchanged flow of innovative ideas between all actors involved. As practice shows, the currently existing models in the country to deal with open innovations are mostly based on a cluster development approach, which is still limited. The authors propose synergizing the cluster approach with an ecosystem innovation model, which should ensure an effective collaboration and an accelerated rate for the diffusion of innovations between various actors while involving various regions. The purpose of the study was to develop a conceptual model for implementing open proposals from participants in the innovation economy. The research methodology is based on numerous works in the field of open innovation theory, cluster and ecosystem approaches. The study utilizes empirical and dialectical methods of scientific knowledge. The methodological toolkit covers information processing with historical analysis, a literature review using the Russian Citation Index and Scopus databases, analysis and diagnostics of innovative activity in domestic regions, the comparison method, modeling and correlation analysis. We concluded that the interaction of participants in the Russian regions through implementing the cluster model is not sufficiently effective and requires the development of new methodological approaches. Therefore, we propose combining the cluster approach with the ecosystem innovation model, which should ensure an effective cooperation and accelerate the rate of innovation dissemination among various subjects involving several regions. To determine the approach’s efficiency, the proposed concept should be tested in one or more regions.

Sequential studies on soil physical properties by application of hydrogel in groundnut (ArachishypogaeaL.) under Central dry zone of Karnataka.

Micro, Small and Medium Enterprise (MSME) sector has been undergoing a metamorphosis in the era of globalisation for over two decades. Many developments of relevance to SMEs (Small and Medium Enterprises) have taken place within the country and internationally. Globalisation resulting in fierce competition in various product lines has forced the SME sector to adopt strategies in tune with the global trends. A number of programmes of cluster–specific and firm-specific approaches are being pursued by all India organisations with a wide network of institutions associated with various functions supporting the SME sector at different levels. The paper reviews the progress of MSME sector from 2000-01 in particular, and discusses a few key approaches adopted in the sector. These include the following: Eleventh and Twelfth Plan approaches for inclusive growth, MSMED Act 2006, cluster development approach (CDA), National Manufacturing Competitiveness Programme (NMCP), Central Public Procurement Policy (CPPP) and Defence Production Policy. Conclusion and Suggestions are offered towards the end of the paper. Appendix I presents the websites of MSME and related organisations.

Entrepreneurship Development in Saitual Sericulture Cluster in Mizoram

Sericulture in India has existed since time immemorial. India is the second largest producer of silk in the world and has 15.49 per cent share in global raw silk production. Mizoram is one of the most promising states for developing sericulture in Northeast India where all the four varieties of silk producing food plants are grown and silkworms are reared for silk production. Cluster development approach has emerged as an important tool for development of land-based enterprises in the developing countries in recent times. The present study attempts to understand the role of cluster in the emergence of entrepreneurship in the Saitual cluster in the northeastern state of Mizoram. The article relies mainly on primary data collected from all the agripreneurs (180) engaged in sericulture activities in Saitual cluster, which is comprised of seven villages. Agripreneurship is thriving in Saitual cluster on the key factors of availability of land and family labour, complemented by suitable climate for sericulture along with assistance from the government.

The Technical Efficiency of Engineering Industry Cluster at Hosur

For inclusive growth and sustainable development Engineering Industries (EIs) in Hosur have adopted the Cluster Development Approach (CDA). The objective is to study the value chain analysis, correlation analysis and data envelopment analysis by finding Technical Efficiency (Ø), Peer Weights (li), Input Slacks (S-) and Output Slacks (S+) of 50 EIs. The methodology adopted is data envelopment analysis of output-oriented Banker–Charnes–Cooper Model by taking the number of employment, plant and machinery as input and Gross Value Added (GVA) as output. The non-zero li’s represents the weights for efficient clusters. The S > 0 obtained reveals the excess machinery or number of employment (S-) and shortage in GVA (S+). To conclude, the variables are highly correlated, and for inclusive growth and sustainable development, the inefficient EI should increase their GVA or decrease the employment or machinery. Moreover, for sustainable development, the EI should strengthen infrastructure interrelationships, technology interrelationships, procurement interrelationships, production interrelationships and marketing interrelationships to decrease costs and to increase productivity and efficiency to compete in the indigenous and export market.

Qualitative Analysis and Impact Assessment of Chennai Automotive Industry Cluster

The Chennai is one of India’s largest auto hubs due to its Automotive Industry presence producing India’s Vehicle and Components. The Chennai Automotive Industry Cluster(CAIC) faced problems on infrastructure, technology, procurement, production and marketing. During diagnostic study it if found that there is need for Cluster Development Approach(CDA) for these Industries. The objective is to study on the qualitative analysis and impact assessment of CAIC before and after the CDA and develop a CAIC Model. The methodology adopted is collection of primary qualitative data from 100 Industries using questionnaire and analyzing using Reliability Analysis(RA), Test for Proportion(TFP), Chi-Square Test(CST), Kolmogorov–Smirnov(KS) one-sample Test and Impact assessment is carried out to find the performance of the cluster after intervention at three level viz., Firm level, Association level and Cluster level The RA proves the data are reliable. It is found using TFP that the proportion of sampled industrial units agreeing for better Infrastructure, Technological, Procurement, Production and Marketing Interrelationships. The CST reveals that there is no association between locations with respect to variables and the fact states that location of the industrial units plays a major role in establishing related vital intervention strategies. The KS Test reveals that there is significant difference in each of the variables under study after CDA. In Firm Level Impact Assessment, the level of impact in respect of technology interrelationships, Production interrelationships and Marketing interrelationships seems to have High Impact. The level of impact in respect of Infrastructure Interrelationships and Procurement Interrelationships seem to be having moderate impact. In Association / Network Level Impact Assessment the three individual Associations / Network level impact seems to be high. The Cluster Level Impact assessment is also high when all the three locations are taken into account. The CAIC Model, demonstrates the fact that industrial units have utilized the Physical Infrastructure and Centralized Facilities by adopting the CDA.

Study of CNSL Processing Plants Located in Cuddalore District of Tamil Nadu, India

Basic chemicals and their related products like petrochemicals, fertilisers, paints, varnishes, glass, perfumes, toiletries, pharmaceuticals, etc. form a very significant part of the Indian economy and account for about 3% of India’s GDP. Among the most diversified industrial sectors, it covers an array of more than 70,000 commercial products. The chemicals sector accounts for about 14% in overall index of industrial production, 11% of total exports and about 7.2% of total imports. The total Foreign Direct Investment in Chemicals (excluding fertilizers) was US$ 7252 million from April 2011 to March 2012. For inclusive growth and sustainable development most of the Chemical manufacturers should adopt the Cluster Development Approach. The objective is to Study the Occupational Hazards in Cashew Nut Shell Liquid (CNSL) Oil Processing Industries in Panruti Block of Cuddalore District. The methodology adopted is collection of primary processing data during November 2012 from 14 CNSL Processing Industries in Panruti Block of Cuddalore District. Majority of Industries has not processed the CNSL oil as per standards and there is much scope for occupational hazards. In two processes the CNSL oil is let out in the tank constructed equal to ground height where there is possibility of workers getting trapped inside the high temperature CNSL oil. The electric motor is also placed in the ground so that there is possibility of current passing in the ground which leads to occupational hazards for the workers. To conclude, Cashew Shell Oil Processing Industries in Panruti Block of Cuddalore District needs is re-engineering in design and operation starting from Cashew Shell storage, extraction of shell oil from expeller, processing and packaging of CNSL in barrels for better safety from occupational hazards and Cyclones. Moreover for sustainable development, they should adopt cluster development approach, so that infrastructure interrelationships, technology interrelationships, procurement interrelationships, production interrelationships and marketing interrelationships will take place among CNSL manufacturers to decrease cost, increase quality, productivity and efficiency to compete in the world market.

Industrial Location Policy in India

The article provides a broad overview of the industrial location policy in India since Independence. In India, the glaring regional imbalances and inequalities have arisen through a complex set of historical, socio-economic, demographic and cultural factors. The pre-reform approach to industrial location policy involved top-down identification of lagging areas and targeting them with interventionist and regulatory measures. In the post-reform period, the process of liberalisation has curtailed the role of government as industrial owner and location regulator, and restricted policy space. Thus, the focus shifted to a targeted approach and subnational strategies. Package for industrial development are in operation for the special category states, namely northeastern states, Jammu and Kashmir (J&K), Himachal Pradesh and Uttarakhand. In other regions, the development of industries adopted a cluster development approach. However, the peripheral lagging regions continue to stagnate despite the industrial location policy having tried virtually everything. The persistently growing regional disparity in post-reform period is a matter of grave concern. JEL Classification: R3, L5

Analysis of cluster development approach in India

This paper focuses on two main aspects of the clusters, namely, which factors gives rise to development of clusters and what benefits are acquired by firms from participating in clusters of India. The methodology used for this article is a literature review of published materials. A broad search strategy was used using key terms like industrial clusters, evolution of clusters, and advantages of clusters from electronic databases. Among the factors that give rise to clusters in India, the more important ones are historical background, easy availability of raw materials, existence of one or few large enterprises, pooled labour market of skilled workers, regional government policy, and presence of entrepreneurial spirit. The important benefits reported by enterprises through their presence in clusters are formation of new business, network formation with supporting institutions, women empowerment, market development, product development, easy availability of finance, increased trust and collaboration among members, increase in sales, skills up gradation of workers and employment opportunities. We expect that the findings from this study will assist firms and policy makers in making more informed decisions regarding the adoption of a cluster approach and start new initiatives for promoting inter-firm relations within MSME clusters. The major contribution of this paper is that it attempts to justify the positive impact of cluster approach and describe the status of clusters in India.

Early stage cluster development: a manufacturers-led approach in the aircraft industry

Purpose – The purpose of this study is to explore the early stage of development of a cluster. The literature on early stage of cluster development shows that there are often random effects such as an entrepreneur and spin-off companies, and in this study, a coordinated approach for cluster development is described. Design/methodology/approach – A single exploratory case study approach is followed. The aerospace cluster in the Spokane region, State of Washington, is described. Data from a variety of sources are triangulated to enhance the credibility of the case study findings. Findings – It was found that although there are many types of collaborations occurring in the region, which involve policy and government organizations, the main driver of the early-stage cluster development is manufacturers-led coordinating mechanism. Individual manufacturers are too small to be successful in the aerospace industry, and they are collaborating to present a united “front” to out-of-the-region customers. Once customers place an order, then within this coordinating mechanism, the work is divided among different manufacturers. Research limitations/implications – The research has two main limitations. First, it is a single case study, and therefore, the results may not be generalizable. Second, the cluster is in an early stage of development, so it is not (yet) clear whether this manufacturers-led coordinated approach will have long-term success. Practical implications – The studies offer potential for cluster development that go beyond relying on a single entrepreneur or on mostly government- or policy-driven initiatives. Instead, this is an approach that can be used by industry to lift the overall competitiveness of their region. Social implications – This cluster development approach offers potential for economic development of smaller regions which mainly consist of small- and medium-sized companies without endowment benefits or a large local customer base. Originality/value – This study adds to the existing knowledge on clusters and cluster types. The identified cluster approach does not fit with the main types of clusters that have been identified in the literature. The companies involved are mainly small- to medium-sized companies, but by coordinating their capabilities, they are able to present core capabilities in a much more attractive manner to customers. This cluster development approach is not driven by or achieved through advantages in innovation, vertical or horizontal supply chain competition and advantages, creation of spin-off firms, or a regional demand base as customers are located outside the region. It deviates in terms of the types of companies involved and, mostly, in a sense that it acts as one unit to customers who are located outside the region.

The Productivity Analysis of Chennai Automotive Industry Cluster

Chennai, also called the Detroit of India, is India’s second fastest growing auto market and exports auto components and vehicles to US, Germany, Japan and Brazil. For inclusive growth and sustainable development, 250 auto component industries in Ambattur, Thirumalisai and Thirumudivakkam Industrial Estates located in Chennai have adopted the Cluster Development Approach called Automotive Component Cluster. The objective is to study the Value Chain, Correlation and Data Envelopment Analysis by determining technical efficiency, peer weights, input and output slacks of 100 auto component industries in three estates. The methodology adopted is using Data Envelopment Analysis of Output Oriented Banker Charnes Cooper model by taking net worth, fixed assets, employment as inputs and gross output as outputs. The non-zero represents the weights for efficient clusters. The higher slack obtained reveals the excess net worth, fixed assets, employment and shortage in gross output. To conclude, the variables are highly correlated and the inefficient industries should increase their gross output or decrease the fixed assets or employment. Moreover for sustainable development, the cluster should strengthen infrastructure, technology, procurement, production and marketing interrelationships to decrease costs and to increase productivity and efficiency to compete in the indigenous and export market.

Establish the Regional Excellence through the Cluster Development of Small and Medium Manufacturing Industry Center with Effective and Dynamic

One of the strategies for developing countries is spurring the development of regional excellence through the development of Small and Medium Manufacturing Industries (SMMI) with a clustering approach. With the industry cluster approach to the potential that exists in the region can develop due to be analyzed in a comprehensive and integral. Industrial cluster is to form an organizational structure for economic development and trade in the global context. Industrial cluster as an instrument of industrial policy is an effective platform to respond to economic decentralization and the development of effective SMMI in Indonesia. With industrial clusters, the potential that exists in the region can be developed in accordance with core competencies possessed. Cluster development of SMMI center effective and dynamic can be done with some of the following: (1) Industry cluster development approach needs is grown. The essence of the strategy is the creation of a unified and solid cluster to build a synergy to achieve an economic growth with a wide base. (2) With the passage of local autonomy, the SMMI sector plays an important role in national economic development. Open opportunities for local governments to provide facilities for the development of regional advantages (potential territory), including the development of SMMI. For that we need the synergy between the main activities auxiliary activities, and (3) Development of SMMI focused on driving regional economic groups, among which SMMI supporters, SMMI export-oriented group, and SMMI the new initiative. The motivation and contribution of this research, this research is expected to provide benefits or contribution of in the form of recommendations or fill in cultivate the creation of centers of Small and Medium Industry (SMMI) effective and dynamic, with industrial cluster development approach, in developing areas of excellence in other places. Because with regional autonomy has progressed at this time, it is evident that SMMI sector plays an important role in national economic development. The open opportunities for local governments to provide facilities for the development potential of the region, including the development of SMMI, with clustering approach. Keywords: regional excellence, cluster development, Small and Medium Manufacturing Industry (SMMI).

Small and Medium Enterprises and Inclusive Growth in the Globalisation Era

Micro, Small and Medium Enterprise (MSME) sector has been undergoing a metamorphosis in the era of globalisation for over a decade and a half. Many developments of relevance to SMEs (Small and Medium Enterprises) have taken place within the country and internationally. Globalisation resulting in fierce competition in various product lines has forced the SME sector to adopt strategies in tune with the global trends. A number of programmes of cluster-specific and firm-specific approaches are being pursued by all India organisations with a wide network of institutions associated with various functions supporting the SME sector at different levels. The paper reviews the progress of MSME sector from 2000-01 in particular, and discusses a few key approaches adopted in the sector. These include the following: Eleventh and Twelfth Plan approaches for inclusive growth, MSMED Act 2006, credit flow to MSMEs, policy of de-reservation, greater equity participation, cluster development approach (CDA), National Manufacturing Competitiveness Programme (NMCP), Central Public Procurement Policy (CPPP) and Defence Production Policy, Development of employment-intensive enterprises, employment generation programmes for micro enterprises promotion, and training and entrepreneurship development. Conclusion and Suggestions are offered towards the end of the paper. The four appendices given include websites of MSME and related organisations, and particulars of web portals of National Small Industries Corporation (NSIC), and call centres set up by NSIC and Union Ministry of MSME.

The Productivity and Technical Efficiency of Textile Industry Clusters in India

The Indian textile industry is one the largest and oldest sectors in the country and among the most important in the economy in terms of output, investment and employment (E). The sector employs nearly 35 million people and after agriculture, is the second‐highest employer in the country. Its importance is underlined by the fact that it accounts for around 4 % of Gross Domestic Product, 14 % of industrial production, 9 % of excise collections, 18 % of E in the industrial sector, and 16 % of the country’s total exports (Ex) earnings. For inclusive growth and sustainable development most of the Textile Manufacturers has adopted the Cluster Development Approach. The objective is to study the physical and financial performance, correlation, regression and Data Envelopment Analysis by measuring technical efficiency (O), peer weights (λi), input slacks (S−), output slacks (S+) and return to scale of four textile clusters (TCs) namely IchalKaranji Textile Cluster, Maharashtra; Ludhiana Textile Cluster, Punjab; Tirupur Textile Cluster, Tamilnadu and Panipat Textile Cluster, Haryana in India. The methodology adopted is using Data Envelopment Analysis of Output Oriented Banker Charnes Cooper Model by taking number of units (U) and number of E as inputs and sales (S) and Ex in crores as an outputs. The non-zero λi’s represents the weights for efficient clusters. The S > 0 obtained for one TC reveals the excess U (S−) and E (S−) and shortage in sales (S+) and Ex (S+). To conclude, for inclusive growth and sustainable development, the inefficient TC should increase their S/turnover and Ex, as decrease in number of enterprises and E is practically not possible. Moreover for sustainable development, the TC should strengthen infrastructure interrelationships, technology interrelationships, procurement interrelationships, production interrelationships and marketing interrelationships to decrease cost, increase productivity and efficiency to compete in the world market.

Small and Medium Enterprises Inclusive Growth in the Globalisation Era

The micro, Small and medium enterprise (MSME) sector has been undergoing a metamorphosis in the era of globalisation for over a decade and a half. Many developments of relevance to SMEs (small and medium enterprises) have taken place within the country and internationally. Globalisation, resulting in fierce competition in various product lines, has forced the SME sector to adopt strategies in tune with the global trends. A number of programmes of cluster–specific and firm-specific approaches are being pursued by all-India organisations, with a wide network of institutions associated with various functions supporting the SME sector at different levels. The paper reviews the progress of MSME sector from 2000-01 in particular, and discusses a few key approaches adopted in the sector. These include the following: Eleventh and Twelfth Plan approaches to inclusive growth, MSMED Act 2006, credit flow to MSMEs, policy of de-reservation, greater equity participation, cluster development approach (CDA), National Manufacturing Competitiveness Programme (NMCP), Central Public Procurement Policy (CPPP) and Defence Production Policy, Development of employment-intensive enterprises, employment generation programmes for micro enterprises promotion, and training and entrepreneurship development. Conclusion and suggestions are offered towards the end of the paper. The four appendices given include websites of MSME and related organisations, and particulars of web portals of National Small Industries Corporation (NSIC), and call centres set up by NSIC and the Union Ministry of MSME.

Sustainable Development in Indian Automotive Component Clusters

India is the world’s second fastest growing auto market and boasts of the sixth largest automobile industry after China, the US, Germany, Japan and Brazil. The Indian auto component industry recorded its highest year-on-year growth of 34.2 % in 2010–2011, raking in revenue of US$ 39.9 billion; major contribution coming from exports at US$ five billion and fresh investment from the US at around US$ two billion. For inclusive growth and sustainable development most of the auto components manufacturers has adopted the cluster development approach. The objective is to study the technical efficiency (θ), peer weights (λ i ), input slacks (S−) and output slacks (S+) of four Auto Component Clusters (ACC) in India. The methodology adopted is using Data Envelopment Analysis of Input Oriented Banker Charnes Cooper Model by taking number of units and number of employments as inputs and sales and exports in crores as an outputs. The non-zero λ i ’s represents the weights for efficient clusters. The S > 0 obtained for one ACC reveals the excess no. of units (S−) and employment (S−) and shortage in sales (S+) and exports (S+). However the variable returns to scale are increasing for three clusters, constant for one more cluster and with nil decrease. To conclude, for inclusive growth and sustainable development, the inefficient ACC should increase their turnover and exports, as decrease in no. of enterprises and employment is practically not possible. Moreover for sustainable development, the ACC should strengthen infrastructure interrelationships, technology interrelationships, procurement interrelationships, production interrelationships and marketing interrelationships to increase productivity and efficiency to compete in the world market.

Technical Efficiency of Automotive Industry Cluster in Chennai

Chennai is also called as Detroit of India due to its automotive industry presence producing over 40 % of the India’s vehicle and components. During 2001–2002, diagnostic study was conducted on the Automotive Component Industries (ACI) in Ambattur Industrial Estate, Chennai and in SWOT analysis it was found that it had faced problems on infrastructure, technology, procurement, production and marketing. In the year 2004–2005 under the cluster development approach (CDA), they formed Chennai auto cluster, under public private partnership concept, received grant from Government of India, Government of Tamil Nadu, Ambattur Municipality, bank loans and stake holders. This results development in infrastructure, technology, procurement, production and marketing interrelationships among ACI. The objective is to determine the correlation coefficient, regression equation, technical efficiency, peer weights, slack variables and return to scale of cluster before and after the CDA. The methodology adopted is collection of primary data from ACI and analyzing using data envelopment analysis (DEA) of input oriented Banker–Charnes–Cooper model. There is significant increase in correlation coefficient and the regression analysis reveals that for one percent increase in employment and net worth, the gross output increases significantly after the CDA. The DEA solver gives the technical efficiency of ACI by taking shift, employment, net worth as input data and quality, gross output and export ratio as output data. From the technical score and ranking of ACI, it is found that there is significant increase in technical efficiency of ACI when compared to CDA. The slack variables obtained clearly reveals the excess employment and net worth and no shortage of gross output. To conclude there is increase in technical efficiency of not only Chennai auto cluster in general but also Chennai auto components industries in particular.