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What ails clusters in theory as well as in practice?
11
May '11
Michael Porter propounded the 'cluster' theory leading to competitive advantage of geospatial hubs that produce low cost similar products and offer a degree of differentiation with a competitive edge to its members and all concerned.

Over the years and even today, clusters though having been approached in systematic manner with lot of interventions in order to raise their stature and ultimately make them independent profit centres of productive excellence, have ultimately failed to deliver in economic terms.

Be it Italy, France or here in India where we have seen several governmental and quasi agencies intervening thru design, product development, skill development and marketing supports. Cluster interventions have really failed to deliver those perceived benefits that have not really trickled down to the first members of the value chain - say a weaver or artisan creating a handloom or a piece of handicraft.

Rodolfo Helg, an economics professor at the university in Castellanza clearly believes that successful clusters of today will have to dump their past and move forward through innovation and out of the box thinking.

Major issues that emerge is that most of the interventions have been to the level of upgrading or introducing new designs and patterns like in the case of handloom or handicrafts clusters finally to raise the economic and social status of the weavers, craftsmen and those involved in the first link of the value chain. But, the end result for which all the interventions that were carefully executed were never truly realized at all!

If at all such results come to light they touch the periphery and not even scratch the top layer of the problem pile of enhancing and enriching the livelihoods of the lowest strata of society.

Overseas, say in Italy, the famous Porter theory of 'firms' geographical proximity, their close competition with each other and the growth of specialised suppliers and production networks around them make a winning combination' is taking also severe beating.

The fact that globalization has dawned a new phase altering their very foundations of businesses today to negate all that is said above. Earlier, it was 'united they stand' would rule the competitive daylights, but today it is alas but redundant. Individually, they (cluster members) break the competition in its back and successfully steer themselves to virgin territories and greener pastures abroad, all by themselves, and not united.

While global competition seems to shake and disturb the very foundations of established clusters, their survival will depend on how innovative and competitive they turn standing on their own rather than fighting united for common goals and aspirations.

How does all this bode for a weaver in Bargarh or a craftman in Poochampalli who are already taking a severe beating in these taxing times? Will their individuality lead to carve their own survival identity or completely erase his very existence from the cluster manifold to die 'naturally'?

So, what then is the way out?

A new confederate model is emerging in the cluster horizon to beat competition which not only strategises survival but also help clusters prosper through effective use of effective production planning, technology and innovation among clusters. But this we shall delve in later before analyzing further on clusters and their problems in the next installment.

Fibre2fashion News Desk - India

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