SME DEVELOPMENT- CLUSTERS AND INITIATIVES

Background

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 2012-2016

Can have direct impact on poverty reduction, generating employment

Can increase productivity and competitiveness of SMEs

What is a Cluster

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.

Characteristics of Cluster

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

Benefits of Having Clusters

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

Common Sectors in Clusters in Zimbabwe

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

Approach to cluster development

Methodology Selection of a cluster based on importance,

viability and sustainability Diagnostic study Trust building Action plan Implementation Monitoring and Evaluation

Challenges hindering cluster development in Zim

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)

Other Initiatives For SME development

• Formulating and implementing MSME development policies.

• Developing legal and regulatory framework for SMEs development

• Promoting, coordinating and monitoring innovative financing schemes for SMEs.

Cont’n

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