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Highlights of 11 cluster studies involving 3,000 SMEs

Dec '08
Hosiery Cluster Funding:
A big 41 percent of the hosiery units have invested funds drawn from their own resources while 32 percent have invested their own funds as well as received funding from banks while only 27 percent of the hosiery units have accessed capital from banks.

Human Resources:
According to the study, 76 % of the firms in the Ludhiana Hosiery cluster reported an attrition rate of over 25%. These numbers were at 34% for the Ludhiana bicycle cluster and only 15% in the auto component cluster. The study infers about the Auto component cluster that “The respondents found shortage of skilled labour to be the root cause for the prevailing labour problems and of it being expensive and difficult to control.” One of the reasons for the high attrition is the fact that skilled labour is constantly on the move from smaller to larger firms.

Contract Labour:
Although most firms reported their labour strength to be less than 200, there were many firms who informally admitted to having more that 8-10 times this number who were fearful of showing these numbers on paper due to issues of compliance with ESI and PF.

The penetration of Quality certification in a cluster is an indicator of its success. In the Ludhiana Auto Component and the Bicycle Clusters, almost all the firms had quality certifications. In the Ludhiana Hosiery cluster and the Firozabad Glass Cluster most of the firms had not acquired any quality certifications. Even in the NCR IT Cluster, 78% of the firms did not have any quality certification. Certification can be a means to increase the competitiveness of the firm.

In the Ludhiana Hosiery Cluster, 83% of the units did not have their own website and hence did not engage in ecommerce. The picture was similar in the Firozabad Glass Cluster where 91% of the units did not have websites and 97% had never used e-commerce.

Sales and Marketing:
Only 35% of the firms in the Auto Component Cluster reported having a sales department while in the bicycle cluster this number was at 25%.


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