SOIL Report 2008 - ACCESS Development Services

Possibilities: Livelihood Opportunities and PotentialIn India, some geographical areas which are known for special products include Sivakasi for matchboxesand firecrackers, Ludhiana for woolen garments, Patiala for machine tools, Moradabad for brassware,Ulubedia for badminton shuttle-corks, Lonavala for chiki and groundnut molasses sweetmeat, Tirupurfor hosiery, Kanchivaram, Varanasi and Dharmavaram for silk weaving, Kolhapur for leather slippers,Kanpur and Agra for various leather goods, Bellary for jeans, and Bikaner for bhujiya, ready-to-eat extrudedproducts. These have been called Clusters of Small and Medium Enterprises or SME clusters.These clusters are characterised by large number of enterprises of similar industry. But they also sportseveral other related and support industries for the primary activity to thrive. Usually a cluster arisesaround a particular activity, and eventually a number of related and supporting activities emerge leadingto all-round livelihood promotion. A cluster may emerge around a non-farm activity such as stonequarrying and polishing.For example, in the Bethamcherla cluster in Andhra Pradesh, growth of 250 stone polishing units hasspurred 100 polished slab-trading companies and 50 rough-stone slab traders in the area. Not only that,various other support enterprises such as transport companies, transport repair workshops, equipmentsupply, repair enterprises and small road-side restaurants have also sprung up in the area, supporting alarge number of livelihoods. These enterprises closely depend on each other for sustenance. On the onehand, the stone polishing units in the area support these enterprises at the same time; these supportingenterprises have helped the stone polishing industry to grow. This area has also witnessed proliferationof many secondary organisations, such as Rough-slab Traders Association, Slab-polishing Units Association,Lorry Owners’ Association, Polishing Workers’ Association, Slab-loaders’ Association etc. Table4.11 indicates the diverse opportunities in a cluster.The advantage of growth of such a cluster is that related and supporting services become available to allparticipants, reducing the transaction costs for all. Imagine, if every polishing unit had to run to Kurnool,the nearest big town, for every small repair, the costs wouldn’t have permitted them to be competitivein the market. The cluster attracts various suppliers to the area, as it provides economies of scale. Thestrong competition attracts consumers, who are assured of choice, competitive quality and price. Growthof clusters attracts policy attention increasing the availability of skilled workers. Clusters also enhanceability to cope with changes in the environment as information flow becomes faster.Table 4.11: Livelihoods in Bethamcherla ClusterThe advantageof growth ofsuch a clusteris that relatedand supportingservices becomeavailable to allparticipants,reducing thetransactioncosts for all.Various Units No. of No. ofUnitsWorkersQuarry 400 10,000Transport (rough slab) 200 1,000Transport (polished) 200 1,000Rough-slab trading 50 200Transport repair 15-20 60-80Equipment supply and repair 5 15-20Stone polishing 250 3,000Polished-slab trading 100 400Private finance companies 55 150Banks 3 15The Forgotten Sector by Fisher, Mahajan and Singha95