Establishing SME Clusters for Sustainable Development

Abstract

There is no universally accepted definition of a cluster. Experts in different regions of the world, however, have defined cluster as per respective national economies. Porter (2003) defines a cluster as a 'geographically proximate group of interconnected companies, suppliers, service providers and associated institutions in a particular field, linked by externalities of various types'. Clusters contain a mix of industries related to by knowledge, skills, inputs, demand, and other linkages. The United Nations Industrial Development Organisation (UNIDO) defines industrial cluster as 'geographic and economic concentration of manufacturing activities which produce and sell a domain of interrelated and complementary products and having common problems and opportunities'. Cluster could be defined on the basis of different parameters like activities, origin, size, technology, linkage, market, state of development and based on entrepreneurship etc. For example, parameters like manufacturing cluster or service-providing cluster, naturally-grown cluster or man-made cluster, growing cluster or declining cluster, export- oriented cluster or domestic market-based cluster etc. could be used to define nature of a cluster.

Keywords: SME Cluster Development, Cluster Based SME Development, SME Clusters in Bangladesh

JEL Classification: R11, C38, C31, O21, O41