Clusters in India Institute for Competitiveness (IFC)

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1 Clusters in India Institute for Competitiveness (IFC), India is an independent, international initiative centred in India, dedicated to enlarging and disseminating the body of research and knowledge on competition and strategy, pioneered over the last 25 years by Professor M.E. Porter of the Institute for Strategy and Competitiveness, Harvard Business School (ISC, HBS), USA. IFC, India works in affiliation with ISC, HBS, USA to offer academic & executive courses, conduct indigenous research and provide advisory services to corporate and Government within the country. The institute studies competition and its implications for company strategy; the competitiveness of nations, regions & cities; suggests and provides solutions for social problems. IFC, India brings out India City Competitiveness Report, India State Competitiveness Report, India Economic Quarterly, Journal of Competitiveness and funds academic research in the area of strategy & competitiveness. To know more about the institute write to us at 1

2 Macro Economic Trends in India The Big Idea Factor Conditions Demand Conditions Base of the Pyramid The Indian Middle Class The rural and the urban India The Big Idea Opportunities in India India versus Bharat

3 Income Distribution Rich Destitutes Consumers Aspirants Climbers

4 Indian Auto Cluster

5 Indian Auto Cluster What is expected

6 Indian Auto Cluster Driven by Auto Component Outsourcing

7 Indian Life Science Clusters PERD, NIPER NIPER PGI Chandigarh IMTECH IISER Proposed Agri Biotech Park Savli Biotech Park Proposed Biotech Park in Ahmedabad MS Univ Baroda TIFR IIT Bombay, Univ of Mumbai National Chemical Laboratory National Centre for Cell Sciences Pune University, IISER International Biotech Park Indian Institute of Science National Centre for Biological Sciences Jawaharlal Nehru Centre for Advanced Scientific Research University of Agricultural Sciences Stem Cell Institute IBAB, ABLE DBT, DST, CSIR, DP, ICMR, ICAR Translational Health Sciences Cluster National Institute of Immunology ICGEB Institute of Genomics & Integrative Biology National Brain Research Centre JNU, Delhi University CDRI, IITR, CIMAP, NBRI Lucknow Biotech Park Indian Inst of Chemical Biology IIT Kharagpur Bose Institute Dept. of Biotechnology, CU IISER, DBT Institute, Haringhata Indian Institute of Chemical Technology Centre for Cellular & Molecular Biology Centre for DNA Fingerprinting & Diag National Institute of Nutrition, ICRISAT University of Hyd, Osmania Univ IKP Knowledge Park, SP Biotech Park Anna University IIT Madras TICEL Biotech Park Women s Biotech Park

8 Typology of Clusters S.No Name of the cluster No. of firms Employment Turnover (Rs. in crores) Large Clusters 1 Tirupur Cotton Knitwear Cluster Delhi Ready Made Cluster Chennai Leather Cluster Panipat Made ups Cluster Ludhiana Knitwear Cluster Rajkot Engineering Cluster Surat Diamond Cluster Ahmedabad Pharmaceuticals Cluster Small Clusters 1 Kaithun Handloom Cluster Baruipur Surgical Instruments Gurera Beads cluster Madhepura Jaggery Cluster Lonavala Chikki Cluster Pareo Brassware Cluster Parwanoo Light Engineering Cluster Roorkee Survey Instruments

9 Cluster Development in India: MSME s CDP in India The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India has adopted the cluster development approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country. Objectives of the Scheme: To support the sustainability and growth of MSEs by addressing common issues such as improvement of technology, skills and quality, market access, access to capital, etc. To build capacity of MSEs for common supportive action through formation of self help groups, consortia, upgradation of associations, etc. To create/upgrade infrastructural facilities in the new/existing industrial areas/ clusters of MSEs. To set up common facility centres (for testing, training centre, raw material depot, effluent treatment, complementing production processes, etc).

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14 PD POLICIES THAT MAKE PRODUCTIVE 0 person (US dollars) USE OF AVAILABLE RESOURCES Source: IMF Fiscal AR Monitor, PEOPLEPOWER States contributing to India s GDP growth (GDP growth higher than national average) St ate Chandigarh Delhi Uttarakhand Haryana Gujarat Bihar Chhattisgarh Sikkim Nagaland Himachal Pradesh Andhra Pradesh Orissa Meghalaya Tripura Arunachal Pradesh Kerala GDP (India avg 7.99) Population size vs GDP growth 8 rate TN 6 14 CH 4 DL 12 UK HR GJ 2 10 NL SK CG BR 0 KR AR OR AP HP 8 KA RJ MH WB MG TR GO POLICY population States can harness to their grow TN THE ECONOMIC TIMESON SATURDAYMUMBAI 27 NOVEMBER 2010 * 9 POLICIES THAT MAKE PRODUCTIVE 0 USE OF 500 AVAILABLE 1000 RESOURCES 1500 ARE CRITICAL Population size in lakhs PEOPLEPOWER States contributing to India s GDP growth (GDP growth higher than national average) St ate population 4 to grow 2 GDP (India avg 7.99) Population growth rate (India avg ) Population growth rate (India avg 1.55) DL UK HR GJ SK CG BR NL KR AR OR AP HP MG KA TR RJ MH GO MZ JH TN WB PJ JK AS MP MN AN Comparison of state population growth and GDP growth DEBTBURDE S b O indd THE EXPLOS NL SERIOUS LO Chandigarh 5.05 Delhi 3.11 AP SK Uttarakhand 1.59 KR OR CG Haryana Population P Gujarat 1.64 growth rates TR AR HP 10.8 KR MH GO u l 5.05 are HIGHER Bihar wg than national 3.11 TN MG RJ MZ G Chhattisgarh WB JH average UP AN d Sikkim PJ s f Nagaland AS MN m Himachal Pradesh Population 1.59 JK PD MP t n Andhra Pradesh growth 0.99 rates gate net government deh Orissa 9.37 are 1.07 Population HIGHER trillion 44% of world 1.86 growth rates Meghalaya in Advanced e than national are LOWER Tripura 8.4 Prasad estimates the r than national vanced economies will Arunachal Pradesh 8.79 average 1.27 average ther to 85% in In ARINDAM Kerala R better. The correspondi Population size vs GDP growth rate er chunk of working-age people, who can among several 4.89 Population others, that is dragging growth force, which (%) are also correspondingly far 26% respectively. In 20I 14 contribute to the GDP and generate higher output per capita. affluent states like Maharashtra, Kar- Group 2: States with healthy GDP and debt. By 2015, they are down the economic growth of relatively more productive. gross domestic product CH DL 12 UK HR 1.59 GJ In fact, the International Labour Organization (ILO) has stated that India will such as Bihar, Andhra Pradesh and Gugarh, Delhi, Haryana and Bihar must fo- share in world GDP, thei HP nataka and Tamil Nadu. Yet, a few states population growth rates, such as Chandi- account for just 14% od BR 10 NL SK CG KR DL: Delhi AS: Assam TN: Tamil Nadu UP: Uttar Pradesh AR OR AP 8 MG KA TR RJ MH account for the highest working age population in the next 10 years, in a report reing high GDP growth. competitive because of the presence of nal rather than borrowe jarat with large populations are exhibitcus on sectors where they are inherently To put that more graph GO CH: Chandigarh NL: Nagaland BR: Bihar AP: Andhra Pradesh o 6 MZ JH TN WB 0.99 PJ UP MP 1.07 Population leased KR: recently. Kerala In the document prepared UK: Uttarakhand RJ: Rajasthan natural resources AR: or Arunachal traditional skills Pradesh 4 JK AS and This has two major w MN for the G-20 Summit held earlier this No burden on economic growth knowledge. These states should find ways they will be able to use m 2 TR: Tripura HR: Haryana GO: Goa HP: Himachal Pradesh AN PD growth rates month in Seoul, the ILO says that the G- Sixteen states in India have a GDP growth to turn the availability of a large workforce in their favour JK: Jammu by offering & suitable Kashmir or repayment. Two, the purposes rather than fo nations MG: will Meghalaya see their working age population between 15 and 64 years increase these, ten states show a population education policies and opportunities. Set- GJ: higher Gujarat than the national MZ: average. Mizoram Of g are LOWER Population size in lakhs PD: Puducherry CG: Chattisgarh PJ: Punjab MP: Madhya Pradesh where succeeding gene than national by 212 million in the period growth rate higher than the national average, while six other states have a popuhance competitiveness for this band of Inting the right priorities is critical to en- lier generations will be Comparison of state population growth and GDP growth Over 64% of this increase will occur in India alone! lation growth rate lower than the nationdian states. pendency ratio read 1.27 KA: Karnataka SK: Sikkim MN: Manipur AN: Andaman & Nicobar advanced Islands economies. A 14 average UK HR DL CH 0.77 This WB: month s West IFCIndia Bengal StateDevelopment JH: al Jharkhand average. OR: Orissa Group 3: A number MH: of Maharashtra s 12 states such as Karnataka, West Bengal, Rajasthan, Tamil This is graphically br group and clearly, th GJ BR 10 AP SK NL Barometer takes a sharp look at what population Population growth, considered a burden to KR CG OR TR AR HP KR er chunk really of working-age means to the economic people, who economic can growth, among seems to have several Nadu and others, Mizoram that are performing is dragging only with force, the rise which in GDP. EMa MH GO MG RJ MZ growth of India s states and analyses how little correlation with GDP growth (correlation = 0.24). high- Large states down such as the Bihar, economic growth rate. These growth states can of quickly relatively cat more JAYEETA slightly below India s average GDP levels from 2007 to 201 WB JH AN contribute states can use their to the demographic GDP situation and generate UP PJ to produc In contr AS MN g JK PD MP to improve their competitiveness, and for instance, have showed sustained GDP apult themselves into Group 2 with a focused effort like on Maharashtra, productivity. Kar- Average Group debt 2: per capita Sta over these two periods er hence, output enhance per their capita. prosperity. growth over the decade affluent along with states a g In fact, the International Labour steadily rising Organization It is widely accepted (ILO) that has growth stated among In- that population India increase will NDIA are such showing is at as GDP Bihar, the ing centre states. Andhra Among of these, Pradesh the states population-versus- such and as Ut-Gu- $48,000 garh, per Delhi, person. Tf H population, nataka whereas states and Tamil Group 4: A Nadu. roadmap for Yet, enhancing a few competitiveness is critical for poorly perform- $41,000 in By 20 states rose population to $29,100 in 201 gr Rising stars among states such as Punjab and Manipur with slower Population growth (%) dian states is skewed, with some prosperous states growth rates that are lower than the nationatar Pradesh and Madhya Pradesh with $75,900, the highest in DL: Delhi AS: Assam TN: Tamil Nadu UP: Uttar Pradesh account for bearing the the highest burden of growth, working age average. popjarat with large large and populations growing populations are must exhibit- con- be cus just $1,200 on sector CH: Chandigarh NL: Nagaland BR: Bihar AP: Andhra Pradesh in UP UK HR DL CH GJ BR INDIA Gross debt to GDP ( Gross debt (US dollars in billions l Gross debt per capita (US dollars) f Gross debt per working-age ILO Economically-Active Po growth debate. With the world s second-largest e n a u m 2 u B r

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