Small And Medium Enterprises Clusters Research Articles

Unlocking Innovation and Sustainability in Communities of Practice: Exploring Duality in SME Clusters

The significance of industrial clusters in the development of small and medium enterprises (SMEs) in remote areas has long been acknowledged. However, there is a lack of research examining innovation and sustainability within these clusters through the lens of Communities of Practice (CoPs). Thus, this study was carried out to specifically investigate the concept of Duality in SME clusters in remote regions of Taiwan to comprehend how Duality contributes to innovation and sustainability in these clusters. To gather data, a combination of purposive and snowball sampling methods was used. We visited a total of 12 SME clusters and interviewed the cluster leader and a senior member within each cluster, resulting in 24 respondents in total. The findings indicated that innovation within SME industrial clusters in remote areas of Taiwan is spurred by the concept of Duality, which is deeply rooted in shared practices and collaborative tasks. These collaborative tasks and shared practices facilitate continuous cycles of mutual engagement, joint enterprise, and shared repertoire, ultimately nurturing creativity. It was confirmed that the concept of Duality allows for clarifying how SME clusters establish their learning mechanisms, not only enhancing creativity but also reinforcing sustainability.

Clustering the agricultural SME sector in Eastern Highlands, Zimbabwe

Purpose: The clustering concept focuses on agricultural SME development. It is a strategy seeking to stimulate entrepreneurship growth and integrating broad SME structures that help to create value and competitiveness to enhance food security and community development in less developed countries. Research Methodology: This study investigated the impact of clustering the agricultural SME sector in Zimbabwe and it was restricted to the Eastern Highlands. The population consists of agricultural SMEs in Eastern Highlands. A methodological design survey on agricultural SME clusters was carried out using a purposive sampling technique, which selected a sample size with a total of 60 agricultural SMEs.An explanatory correlation analysis was used to analyze the data. Results: The study showed that clusters have a significant effect on agriculture SME the development in Zimbabwe. The study results indicated that clustering SMEs improve their competitiveness and market share growth, which is a rationale for economic growth. Findings also showed that clustering SMEs restructure their radical growth. These results further indicated that most agricultural SMEs are crippled due to a lack of cluster centers in their areas to enable them to compete and expand their market share Limitations: A solitary research tool seems to have weakened the study. Contribution: Clustering the agricultural Small and Medium Enterprises (SMEs) is very important because it promotes their competitiveness, productivity, market share, success, as well as community development and industrialization. Therefore this study contributed largely to the literature. Keywords: Clustering,  Agricultural, SMEs, Community development, Food security

DO MANUFACTURING SMALL AND MEDIUM ENTERPRISES CLUSTER GEOGRAPHICALLY IN KHULNA CITY? – A SPATIAL ANALYSIS

DO MANUFACTURING SMALL AND MEDIUM ENTERPRISES CLUSTER GEOGRAPHICALLY IN KHULNA CITY? – A SPATIAL ANALYSIS

Why do Indian SMEs fail and succeed?: insights from auto-component industry

A cursory look at data on small and medium enterprises (SME) in India shows that large numbers of SMEs are failing. This study found fundamental reasons behind this failure besides providing insights into what makes few SMEs successfully manage competition. The data was collected from 517 auto-component manufacturing units in large automotive SME clusters of India. The research highlighted the key role of business planning in Indian SMEs. The SMEs need to proactively manage innovation and quality, improve financial agility, navigate change process and assess global impact. The study also looks at the role of benchmarking, negative attribution and buyer-supplier relationship in sustaining competitiveness by SMEs in post-WTO (World Trade Organization) era.

Adoption of B2C E-commerce by Manufacturing SMEs in Chennai District, Tamil Nadu: An Emprical Study

Small and medium enterprises (SMEs) are the backbone of the manufacturing sector in India. They have great advantages in terms of providing employment and promoting exports. To help them with greater visibility and also sell themselves better it is important for them to adopt B2C technologies and systems. Recognising the importance of B2C adoption by SMEs this empirical study was undertaken in the SME cluster in Chennai, Tamil Nadu. A total of 300 manufacturing firms were surveyed by administering a questionnaire with the objectives of examining the determining factors, the benefits of B2C adoption as also the challenges faced in the process. Simple percentages have been used. The study is the first of its kind in India and Asia. The major finding was that the SMEs that adopted ecommerce solutions could clearly see the benefits, whereas those that did not faced many challenges and could not see the importance of adopting B2C e-commerce. Some policy recommendations have been prescribed. The research study was limited to industrial clusters. Further, only manufacturing SMEs were considered. The findings of the study provide areas of policy initiatives for the government as also for private and public organisations in the promotion of SMEs.

Environmental Management, Climate Change, CSR, and Governance in Clusters of Small Firms in Developing Countries

One of the key debates in the literature on small and medium enterprises (SMEs) and corporate social responsibility (CSR) in developing countries has to do with the role that local industrial districts, or so-called industrial clusters, play in the promotion of CSR in those countries. While there is now an embryonic literature on this subject, we lack systematic, integrated analytical frameworks that can improve our understanding of the role that governance of clusters play in addressing CSR concerns in SMEs in developing countries. This article develops such a conceptual framework drawing on the literatures on cluster governance, CSR, SMEs, and environmental management (EM) as they relate to the developing countries. The authors argue that environmental improvements in SME clusters can be achieved through three basic types of cluster governance: legal enforcement, supply chain pressure, and voluntary engagement in CSR. The proposed framework is an attempt to show how each type of cluster governance is likely to induce different responses in cluster-based SMEs. These responses are related to stages of CSR in which SMEs engage, the barriers to EM they face, the types of EM practices they use, the climate change strategy types they use, and the kinds of benefits that accrue to SMEs from engagement in CSR. The authors put foward a framework that can be useful for both academics and practitioners as they seek to reflect on the interconnectedness of these themes from a research, policy, and practice perspective.

SMEs and ICT: Empirical Study of Manufacturing Industries in the Industrial Estates of Chennai

Small and Medium Enterprises (SMEs) form a very important component in the industrial fabric of India. Their advantage in terms of providing employment and promoting exports is well proven. The need for the adoption of Information Communication Technology (ICT) has been widely propagated by The Ministry of Small and medium Enterprises, Government of India . Recognising the importance of ICT adoption by SMEs this empirical study was undertaken in the SME cluster in Chennai, Tamilnadu, India. A total of 300 manufacturing firms were surveyed by the administration of a questionnaire with the objectives of examining the factors affecting intensity of use of ICT, the benefits of ICT use and the benefits and challenges faced in the use of higher end ICT tools like ERP. Statistical tools of analysis like Discriminant Analysis, Factor Analysis and Multiple Regressions have been used. The study is the first of its kind in India and Asia. The major finding was that operating in industrial clusters supported adoption of basic ICT tools. But firms were wanting in terms of higher end tools. Some policy recommendations have been prescribed. The research study was limited on to the industrial clusters. Further only manufacturing SMEs were considered The findings of the study provide a areas of policy initiatives for the government as also private and public organizations in the promotion of SMEs SPSS software was used for the analysis of data.

Symbiotic Innovative Relationships of Small and Medium Enterprises

Majority of literature and scholarly research on innovation focus on developed countries, while there exists very little research on Small and Medium Enterprises (SMEs) in developing nations. SMEs innovative styles are peculiar to their environment like the biological amoeba and home-grown within the confines of limited resources and myriad of problems. This paper aims to explore the nature of homegrown innovation among SMEs arising from their symbiotic relationships with Multinational companies and strategic alliances with Asia. Evidences indicate the prevalence of process innovation in SMEs clusters and external linkages with Multinational corporations and Asian market has a positive impact on their performances, survival and growth. The paper employed a qualitative approach and attempts to contribute to the literature on innovation in developing countries and provide strategic and practical policy and business recommendations beneficial to SMEs stakeholders and Multinational giants. SMEs in developing can use group borrowing to access bank loans easily, nurture their outward strategic linkages and pursue innovation practices suitable to their context. 

Factors Influencing Innovation in Small and Medium Enterprises in the Czech Republic

Our paper is focused on the factors that influence innovation in small and medium enterprises (SMEs) in the Czech Republic. The country that went through long economic transformation that resulted in the set-up of the new improved standards for entrepreneurship activities is currently dealing with the aftermath of world’s economic and financial crisis. With regard to all that, Czech SMEs are facing tough competition on domestic and EU markets. This is when innovations might become one of the key factors of success that can help to differentiate the product, beat the competition and attract more customers. Our study is based on the empirical model that employs the data from the survey questionnaire with 1144 Czech SMEs. We find several forms of innovations (e.g. own R&D, investment into technology, improvement of quality of a product or service, or presence on foreign (EU and world) markets) can become very significant in enhancing the growth and success of Czech SMEs, while the bureaucratic barriers for innovations and external factors with negative impact did not come through as obstacles. Based on our results, one can state thatthe most important policy implications are for the relevant stakeholders would be the support of investment activities of SMEs, creation of SMEs clusters within business parks, education of employees, expansions of Czech exports to the new markets, and intensive support of R&D. It would also make sense to increase the number of small SMEs (sole-traders and micro-enterprises) by making the registration process easier, or by offering subsidies or government support to the new companies and start-ups.

CLUSTER IMPACT ON COMPANY CREDITWORTHINESS: CASE OF LATVIA

One of the leading driving forces of every state economy is small and medium enterprises (SME). In Latvia, SME accounts for 99.7% of the national industrial system, creating 70% of the national’ value added. The lack of sufficient capital and credit is often a major problem for the development of SME, particularly in their early growth stages. The main criterion and quality indicator of credit risk assessment is the borrower’s creditworthiness. Before issuing a loan, the checking of the borrower’s credibility and solvency is carried out. The assessment of the borrowers’ ability to pay, their creditworthiness at a definite moment must be connected with the ability to meet their liabilities in the future. The objective of the paper is to provide analysis on the development of Latvian government supported SME clusters and test the author’s hypothesis about the dependence of a company creditworthiness on its membership in a SME cluster. Persistent market fragmentation, weak industry-research linkages and insufficient cooperation indicate that clusters in Latvia do not always have the necessary critical mass and innovation capacity to face global competition sustainably and to be world-class. The creditworthiness measurement methodology applied by these the authors did not prove any correlation between the membership of a firm in a cluster and its credit risk decrease, apparently other financial indicators (value of assets, capital etc.) are more significant. Improvement of these indicators will decrease the credit risk of a firm more considerably than membership in cluster organizations.DOI: http://dx.doi.org/10.5755/j01.em.18.1.3668

Innovation, cooperation and business performance

PurposeThe purpose of this paper is threefold: to understand the cooperation activities of small and medium enterprises (SMEs) in food processing industry clusters; to understand the role of cooperation in improving innovation; and to understand the relationship between cooperation, innovation, and business performance of SMEs in food processing industry clusters in rural areas of Indonesia.Design/methodology/approachAn empirical survey was conducted on SMEs in food processing industry clusters. Primary data collected in five SMEs clusters were analyzed by regression and correlation analyses using the path‐analytic approach. In this study, the following two hypotheses were examined: cooperation is positively related to innovation; and innovation of SMEs is positively related to business performance.FindingsUsing the path analytical method, this paper provides evidence that cooperation is significantly related to innovation of SMEs in food processing industry clusters. Moreover, business performance is a function of innovation, in which research results show that innovation significantly affects the business performance of SMEs.Originality/valueThis paper contributes to the extant literature by providing empirical evidence that the cooperation of SMEs with universities and other firms, which are activities more likely to occur within clusters, is positively associated with innovation. Such a contribution is very important for completing the explanation of innovation phenomena that exists in the clusters, since empirical research exploring the role of cooperation in the innovation of SMEs in food processing industry clusters is still rare.

Export‐oriented small and medium industry clusters in Indonesia

PurposeThe Indonesian government has been trying to support the development of small and medium enterprises (SMEs) in the country, as these enterprises are expected to play a crucial role not only for employment creation but also for GDP formation and export development. The paper aims to address the following three questions. First, are networks important for the development of SME clusters, especially for those involved in export activities? Second, in what type of clusters are networks well developed? Third, what is the role of government; does it also play as an important network for SME cluster development?Design/methodology/approachThis paper is based on an ongoing research on the importance of networks in the development of export‐oriented SME clusters in Indonesia. Although the paper also discusses other important issues related to the development of SMEs in the country, i.e. constraints facing the enterprises and women entrepreneurs, the paper focuses on the importance of networks.FindingsFirst, SMEs are of overwhelming importance to Indonesia because they account for more than 90 percent of all firms outside of the agricultural sector. Second, the main constraints faced by small entrepreneurs are, lack of finance and difficulties in marketing. Third, the representation of women entrepreneurs in Indonesia is still relatively low which can be attributed to various factors, e.g. low level of education and lack of training opportunities that make Indonesian women severely disadvantaged in both the economy and society. Finally, although in general Indonesia is not well represented with small and medium industrial clusters that feed into global commodity chains, some clusters have gradually become export‐oriented. Among many factors, well developed networks especially with traders, trading houses, and foreign tourists are indeed an important factor for their increasingly export activities. Even these agents have played more important role than supports from government for their successful export.Originality/valueThe paper examines the importance of networks for the export‐oriented SME clusters in Indonesia.

Factors affecting business success of Small and Medium Enterprises (SMEs) in Bangladesh

The concepts of cluster and networking emerged in 1960s in Small and Medium Scale Enterprises (SMEs) literature but the formation of SME clusters and networking is a very new strategy for Sri Lanka started in 2001 and Pakistan started in 2003. But it shows some positive sign of growth by increasing competitiveness of SMEs by opening-up new opportunities due to good innovative networking, common facility usage and collective efficiency of economies of scale, scopes and synergies, etc. The problem of many SMEs in both countries is not their size, but being isolated and working in enclave nature, therefore SMEs individually have little capacity to respond to competitive pressure and to generate factors for expansion and innovation. Especially, SME Apex bodies and Authorities see the formation of clusters and networking as the way to reduce transaction cost of facility provision by creating new form of co-operation for sharing resources, information, technical expertise and knowledge, etc. But in turn, this can strengthen the competitiveness as well as facilitating learning and technical innovation and ultimately it helps SMEs to mobilize human, financial and other resources to one place by opening avenue for long lasting networking. Many successful empirical stories available regarding the effectiveness of SME cluster and networking formation around the world but Sri Lankan and Pakistan cases may be too early to judge the exact relationship between SME’s success and cluster and networking formation as they recently started these concepts. But available evidences in some clusters and networking in both countries show that due to this SMEs growth and competitiveness have been increasing during the last few years in terms of various indicators. Therefore, this paper ascertains the implications of cluster and networking formation on growth and competitiveness of Sri Lankan and Pakistan’s SMEs. This paper concludes by emphasizing that formation of clusters and promotion of networking is a very good start to develop and increase competitiveness of SMEs but at the same time many other right policy initiatives, incentives, business development services and infrastructure facilities must be in place to better perform these clusters and networking relations to address SMEs complex and diverse problems. Especially, clusters and networking alone cannot be solved the complex problems and constraints encountered by SMEs in Sri Lanka and Pakistan to break the vicious cycle of SMEs.

An appraisal of CSR in SMEs in a globalised context: an empirical study of a ceramic cluster in Morbi, India

Globalisation has led to radical changes in the dynamics of business environment. Increase in geographical market access, better logistics and competitive forces have led to better efficiencies and sustainable operations within businesses. The emergence of numerous codes; standards and frameworks have also been facilitating factors. This has compelled the small and medium enterprises (SMEs) to become efficient in their areas of operations. However, many SMEs are finding this a significant challenge. This paper attempts to study the unfolding state of SMEs in this context given the impact of globalisation on sustainable business practices. Taking a case study of an export oriented SME cluster in Gujarat, India, the study strives to determine the importance of Corporate Social Responsibility (CSR) as a strategic tool for enhancing the efficiencies of SMEs and their social contributions and their key characteristics and attributes in the wake of globalisation.

The Role of Government in Technology Transfer to SME Clusters in Indonesia: Micro-level Evidence from the Metalworking Industry Cluster in Tegal (Central Java)

AbstractIt is evident everywhere that levels of productivity are higher in large enterprises (LEs) and foreign-owned enterprises than in small and medium enterprises (SMEs), partly because they have higher levels of technology capacity. Thus increasing the productivity of SMEs might be facilitated through improved knowledge or technology. The literature on the development of SME clusters in developing countries argues that clusters are an effective means for technology transfer to SMEs and that government can play as the main source of technology transfer to the clusters, especially in regions where production linkages between LEs and SMEs are not yet well developed. This study indeed shows that in Indonesia government agencies are currently the largest providers of training and similar assistance. However, these programmes are marred by a low level of coverage, lack of effective evaluation and assessment, and a supply rather than demand orientation. The case study of the Tegal metalworking industry also shows that the most important channels for the transfer of technology to SME clusters are not only government agencies but also sub-contracting arrangements with LEs.

An Analysis of the Dynamics of Information Risk in Supply Chains of Select SME Clusters

Virtual integration of supply chains is on the agenda of most organizations as there is a growing need to reduce inventories at each echelon to maximize the value for the ultimate customer. In this context, information has emerged as the most important asset to create competitive advantage. Thus availability of correct and timely information to all the partners of supply chain is an imperative achieved through the adoption of the latest IT tools. But along with the advantages of IT enablement, there are also risks which, if not tackled properly, can bring the whole supply chain to a halt. The purpose of this paper is to understand various information risks from a supply chain perspective. Case study method is applied to three small and medium enterprises (SMEs) clusters in India to understand how these information risks could impact the supply chain. Further using Interpretive Structural Modelling (ISM,) a hierarchy of enablers for information risks mitigation is developed. This helps focus on those areas that are most effective for minimizing information risks in a supply chain.

Promoting Small and Medium Enterprises with a Clustering Approach: A Policy Experience from Indonesia

Small and medium enterprises (SMEs) in Indonesia are very important for employment creation and are important sources of economic growth and foreign currencies. It is therefore not a surprise that SMEs receive ample attention in Indonesia. In recent years, particular attention has been paid to development of SME clusters. The main aim of this paper is to review government policies on SMEs with a clustering approach, in Indonesia. The paper argues that in many cases, the development policy has not been so successful. In essence, most failures can be attributed to the fact that one or more critical factors for successful SME cluster development were either not existing or not addressed correctly. Neglecting cluster linkage to markets is one main reason for the failure. Prerequisite for successful cluster development is the cluster's potential to access growing markets, either domestic or abroad.

The Development of Small and Medium Entreprises Clusters in Indonesia

Small and Medium Enterprises (SMEs) in Indonesia are very important not only for employment creation, but also as important sources of economic growth and foreign currencies generation through exports. Since the early 1980s, the Indonesian government has adopted SME development policy through a clustering approach. This paper reviews the existing empirical studies on development of SME clusters in Indonesia. This paper deals with two main questions. First, what are the critical success factors of development of an SME cluster. Second to what extent this policy has contributed to the dynamic of SME clusters in the country. The paper argues that in many cases, the development policy has not been so successful. In essence, most failures can be attributed to the fact that one or more critical factors for successful SME cluster development were either not existing or not addressed correctly. Neglecting cluster linkage to markets is one reason of the failure. Prerequisite for successful cluster development is the cluster's potential to access to growing market, either domestic or abroad.

SMALL AND MEDIUM ENTERPRISE DYNAMICS IN INDONESIA

This paper discusses the development of small and medium enterprises (SMEs) in Indonesia before and during the crisis. It argues that SME productivity has risen substantially, at rates not far from those of larger firms. Case studies indicate that various mechanisms are at work, such as technology diffusion through foreign buyers and subcontracting. The prevalence of SME clusters suggests that they benefit small and medium enterprise development. SMEs are found to have been weathering the crisis better than larger companies, though many have been hit hard too. Being less reliant on formal markets and formal credit, SMEs are able to respond more quickly and flexibly than their larger counterparts to sudden shocks. The paper argues that, rather than providing direct assistance to smaller firms, government should concentrate on creating a business environment conducive to small and medium business growth, and promoting provision of business development services by the private sector.