 Cluster development as an approach to industrial development has been successful in countries like China, India, South Korea, Malaysia  In at least 50 developed and developing economies clustering phenomenon is visible  It is acknowledged in our Industrial Development Policy  Can have direct impact on poverty reduction, generating employment  Can increase productivity and competitiveness of SMEs

 Geographical proximity  Same line of business or complementary business  active channels of business transactions, communications and dialogue  share specialized infrastructure, labour market and services and  they are faced with common opportunities and threats.

 Geographical proximity  Sectoral specialization  Close inter-firm collaboration  Common infrastructure  Common opportunities  Common threats

 Common procurement of inputs  Greater bargaining power with customers  Greater presence in the market place- critical mass to achieve economies of scale  Enhanced possibility of securing or sharing big contracts  Easy provision of business development support services therefore enhanced effectiveness and collective efficiency  Sharing of risks, and other critical resources e.g manpower, equipment, technology, training facilities

 Leather work  Furniture making  Dairy farming  Metal fabrication  Clothing and textiles  Agro-processing  Retail- flea markets

 Methodology  Selection of a cluster based on importance, viability and sustainability  Diagnostic study  Trust building  Action plan  Implementation  Monitoring and Evaluation

 Lack of dedicated financial support  Limited appropriate infrastructure and work space  Lack of knowledge of cluster concept and benefits by SMEs- unwillingness to collaborate  Lack of technical support(technology, expertise)

Formulating and implementing MSME development policies. Developing legal and regulatory framework for SMEs development Promoting, coordinating and monitoring innovative financing schemes for SMEs.

 Providing technical skills and management training that support entrepreneurship and small business growth  Facilitating linkages between large scale enterprises and SMEs  Business consultancy services to SMEs  Research into investment and marketing opportunities for SMEs  Facilitating provision of appropriate infrastructure to SMEs