international conference on cluster economic development - Asian ...

particularly EICs, can boost their environmental and economic performance. Public policies
must promote the adoption of appropriate technologies by SMEs, provide needed
infrastructure, put in place a better market orientation for cluster products, and provide
financial support. National governments need to think strategically and come up with
integrated policy interventions for accelerating the development of EICs. Policy dialogue
beyond the cluster level and supported by the political leadership can bring tangible benefits.
(Annex H.d).
D. Panel Reaction and Discussion
The panel posed these questions: (i) Is there an optimum size for cities or urban centers
such that beyond this size there would be congestion costs? (ii) How do we go about
operationalizing the CCED framework in more concrete terms? and (iii) What is the role of
<strong>international</strong> financial institutions, such as ADB, in promoting the SME cluster approach in
Asia where the environment is vulnerable?
The questions resulted in following response:
� It is difficult to say what the optimum size of cities or urban centers should be
because urbanization is driven by economic activities. It has a natural pulling effect
that attracts migration from the rural areas. Instead of avoiding urbanization, it would
be better to look for better ways of promoting urban development. Urbanization and
economic growth are positively correlated.
� CCED involves many sectors, and implementing it requires coordination. ADB must
undertake better policy dialogues with governments and involve different ministries in
the process.
� ADB may start looking into investments in soft infrastructure because local
government capacities are weak and human knowledge and skills are also lacking.
� Similar to what Japan has done for its automotive and airline industries, ADB can
help by promoting the long-term competitiveness of clusters, supporting the microfoundations
of clusters, and providing seed money.
VIII. PANEL DISCUSSION: POVERTY-INNOVATION-SUSTAINABILITY: HOW TO
INTEGRATE CLUSTERS IN SUSTAIABLE DEVELOPMENT
Moderator: Michael Lindfield, Lead Professional (Urban Development), ADB
Panelists: Ashok Sharma, Director of South Asia Department's Financial Sector, Public
Management and Trade Division, ADB; and Ramesh Subramaniam, Director
of Central and West Asia Department's Financial Sector, Public Management
and Trade Division, ADB
The discussion focused on two questions: (i) how the CCED framework will be
operationalized and (ii) how its implementation will be financed.
A. Operationalizing CCED
The following suggestions were made on how to operationalize the CCED framework:
� Develop industries in the rural areas in order to create jobs and reduce poverty.
� Invest in strategic infrastructure, particularly on building technology transfer to subnational
level and on supporting sub-national research on human resource
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