Innovation Clusters

National Innovation Council

Clusters in IndiaMSMEs represent 45% of

manufactured output and 40% of exports

Engines for new job creation in both organized and unorganized

sectors

Need support to innovate, grow and stay relevant in globalization world

today

Estimated 6,000 MSME clusters in the country

Challenges facing MSMEs

MSME’sLow Access to Credit

Lack of Skilled Manpower

Inadequate Infrastructure

Low Access to national and global

markets

Low Levels of Innovation and little R&D

High Cost of Raw Materials

Our Approach - Innovation Clusters• Organize MSMEs in cluster to act as

one – create association

• Link them to national resources like R&D labs

• Connect to local Universities

• Connect to banks & financiers

• Connect to Govt. programs & schemes

Create local innovation ecosystem as a platform for development

Established as a PPP model from Day-1 with contributions from all players

Cluster Association

R&DTech

SkillsMentors

Industry Knowledge

Government Programs

Financing

Local Association Takes Responsibility

• Brings economies of scale and collective bargaining power into play

• Represents interests of all members of cluster

Create the Cluster Innovation Center (CIC)

CIC will spearhead collaborative / partnering initiatives

Cluster Association

R&DTech

SkillsMentors

Industry Knowledge

Government Programs

Financing

CIC

Pilot - Industry Clusters

Agartala, Tripura

Bamboo

Moradabad, Uttar Pradesh

Brassware

Faridabad, Haryana

Auto Components

Ernakulam, Kerala

Furniture

Krishnagiri, Tamilnadu

Agriculture

Thrissur, Kerala

Ayurveda

Ahmedabad, Gujarat

Life Sciences

1,000,000 people employed85,000 companies$4 Billion Revenue

4 corners of IndiaHandicraft to High-TechLow-skilled to skilled

Ecosystem Building

Total of 39 partners joined handsCentral and State Government bodiesNational and Regional R&D institutionsNational and Local Industry/Professional bodiesFinancial institutionsLocal educational institutions

9 partners

2 partners 4 partners

7 partners

17 partners

National Innovation Council Confidential

Innovations in the past 1 year

6-8 new products

10-12 new processes

2 new centers

As examples

Efficient Coal FurnaceBrassware Cluster

Before After

Item Pre-innovation Post-innovation(a) Brass melt (in kgs) 80 96(b) Coal consumption (in kgs) 25 20(c) Gross Revenue (in Rs.): (a) * 25 2,000 2,400(d) Cost of coal (in Rs.): (b) * 28 700 560(e) Estimated loss of brass during melting 600 600(f) Average daily income per furnace: (c) – (d) – (e) 700 1,240

Field Estimations by CSIR-NML

Improved Product QualityBrassware Cluster

Before After

50x more storage time (1/2 weeks to 2years)25-30% reduction in cost of lacquer

Enhanced product quality and better market acceptability

Were possible because of the

After 3monthsUncoated

Coated

Moradabad Ecosystem Created

Cluster Association

R&DTech

SkillsMentors

Industry Knowledge

Government Programs

Financing

CIC

MCIDS

CSIR-NMLCSIR-CECRI

CSIRILFS

FICCIMHSC

NInCDSIR

MCIDS

CIC

Local Innovation EcosystemPlan

Actual Ecosystem created at Brassware Cluster

Our Process

Innovation Needs Assessment

Partner Engagement

Prototype Co-development

Market Validation

Commercialization

Step 1

Step 2

Step 4

Step 3

Step 5

Innovation-Needs Assessment

• Cluster identifies– Market demand, known gaps, market opportunities

and market trends

• Cluster prioritizes– Areas with potential for max impact– Low hanging fruit– Willingness of cluster to invest– Needs cluster to partner– Inclusive in nature: M -> S -> M Es

4-6 weeks

Partner Engagement

• Talk to multiple potential partners

• Agree on activities and deliverables

• Create action plans

• Scope out resources needed

• Enter into formal PPP partnerships for collaboration

4-8 weeks

Prototype Co-development

• Partner visits cluster, gathers specs and creates prototype

• Cluster members visit partner facility if needed, validate, provide feedback and help refine the prototype

• Partner refines prototype

• Cluster members validate the prototype at their locations and provide feedback

• Partner creates final version

• Partner and cluster co-invest resources needed

12-24 weeks

Market Validation

• Final prototype embedded in the cluster for a few months

• Cluster conducts demonstrations, road shows, etc.

• Feedback from potential customers

• Confirm acceptability

• Cluster invests in the validation

8-12 weeks

Commercialization

• Open invitation to cluster members

• Interested parties create business proposals and vetted by partner, cluster

• Best party recommended by cluster

• Transfer from or formal collaboration with partner established

• Innovation made commercially available to the cluster

8-12 weeks

Value from Mango WasteAgriculture Cluster

Before After

Item Calorific Value Cost per tonne

Consumption Expenditure/day Selling price per tonne

Firewood 2400 kcal Rs 5,000 10 tonnes Rs 50,000 -Briquettes 3800-4400 kcal Rs 1,000* 6 tonnes Rs 6,000 Rs 4,000-5,000Savings   Rs 4,000   Rs 44,000  

Estimated by Cluster

Storage & Export of Fresh FruitAgriculture Cluster

Before After

Increase shelf life of fresh fruit from 7 days to 35 daysOpen new markets : EU, North America and Japan

Estimated by CSIR-CFTRI

Product DiversificationAgriculture Cluster

Before After

Additional income of around Rs. 150/- per day for women at SHGsPotential reduction of 50% in processed pulp inventory

Estimated by Cluster

Improved Wood Seasoning Furniture Cluster

Before AfterItem Cost at Micro Unit in Rs Cost at CFC in Rs

Raw material 910 805Seasoning (optional) 155 115.5Labour 351 145Electricity  Manual cutting 40*Polishing Materials** 198.75 265***Packing 32.34 26.60Total Cost of Production with seasoning 1,647.49 1,397.10

Selling Price 2,000.00 2,280.00

Estimated by Cluster

Contemporary & New DesignsFurniture Cluster

Before After

Expand Domestic and Export Market

Semi-mechanizationBamboo Cluster

Before After

Estimated 70% reduction in wastageEstimated increase of artisan income from Rs. 150 to Rs. 250

Estimated 50% increase in yield from same resources

Estimated by TBM

Mechanization of Stick MakingBamboo Cluster

Before Under Development

Low-cost automation of Agarbatti manufacturingPotential 2-3x increase in artisan income

Estimated by NIT-A

Industry-University Linkages

Apply academic expertise to industry (SME) problemsIndustry focused projects and innovation

Auto Component Cluster

Standardized Production ProcessesAyurveda Cluster

Quality control (Anti-Diabetes formulation) and requisite certifications

Potential access to export market

Before After

Commercialization of R&D for EntrepreneursBiotech & Pharma Cluster

Transfer of technology from public R&D labsHandholding and incubation of entrepreneurs

National Innovation Council Confidential

How can you engage

• Central Ministries and State Governments being asked to replicate and adapt the model in more clusters

• NInC will work with interested parties and provide– Knowledge, training and handholding support– Manuals and workbooks

Visit: www.innovationcluster.gov.in