international conference on cluster economic development - Asian ...

Annex E: Opening Address by Managing Director General
They play a crucial role in employment and income generation, and therefore in poverty
reduction.
However, Asia's export industries, particularly in the wake of the global recession, have
seen a dramatic decline due to low demand in global markets, high credit risks, poor
accessibility to capital and poor physical infrastructure. Many small and medium sized
enterprises are on the front line and therefore face the most difficulties.
Given the substantial opportunities for SMEs in areas such as manufacturing, services and
agriculture and their potential for reducing poverty, it is critical for governments to come up
with effective strategies and practical investment programs to facilitate further SME cluster
development.
The Cluster Economic Development (or CED) approach, which is the subject of our
<strong>conference</strong>, is a local economic development strategy that aims to promote the efficient use
of limited resources for maximum development impacts. As I said at the beginning, we are
excited about this approach, which provides a new paradigm for promoting the development
of industry and SME clusters and fostering competitiveness of cities. It is applicable to not
only the urban sector, but also more broadly areas in areas like the environment,
microfinance, regional cooperation and inclusive growth. It is an inclusive approach that
puts objective information in the hands of policy makers to decide in a coordinated way.
In essence, we believe the CED provides a useful analytical framework for strategizing the
development of SME industry clusters without being limited to urban-rural dichotomies,
thereby promoting more inclusive economic growth.
We believe that the analytical framework in the Cluster Economic Development approach is
a very powerful and practical tool for making investment decisions. It will identify spatial
clusters of industries that are competitive. The analytical tool, we believe, will show where
the infrastructure gaps are to enable SMEs/industry clusters to be more productive and reap
synergistic benefits through, for example, economies of scale. Above all, we believe it can
help policy makers make investment decisions on "where to invest first" and "what to
invest in" to maximize the economic benefits from limited resources. The approach can help
our developing member countries to target their investments based on their visions for
economic growth and poverty reduction.
Over the course of the day, we look forward to hearing examples of successful industry
clusters and eco-clusters in your countries that are making a difference in the lives of the
poor and creating jobs. You will hear how government, the private sector and civil society
can work together to promote SME cluster development, and above all, we want to hear
from you about the challenges and opportunities that need to be addressed for long-term
sustainability. Your insights and views on these discussions will help us at ADB to better
support our developing member countries in achieving their development goals.
As today's discussions unfold, I challenge all of us to consider how Asian countries can
accelerate progress on economic growth and poverty reduction while coping with the rising
global challenges more effectively. Asia is a success story, but faces inordinate challenges.
We see CED as one approach to meet these challenges. I hope all of you will freely
contribute your thoughts so that we can benefit from one another's field experience,
expertise, and practices. And I hope that the <strong>conference</strong> will promote further initiatives to
create a competitive environment for SME Clusters in Asia.
With that, I would like to welcome you and wish you a day of fruitful discussions.
Thank you very much.
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