The Nature of Cluster Developments in India

Abstract

Industrial clusters are groups of similar and related firms located in a particular geographical area.  Clusters can perform more efficiently by making use of the facilities such as access to better raw materials, technology, information, innovation and market. Clustered firms can improve by coordinating related units and evaluating their performance against other firms.  Formation of cluster is natural or induced.

The process of clustering of industries, firms and economic activities are happening everywhere in the world only the nature, size, scope and time have been different. The practice of clustering envisages coming together and gaining some sort of economies of scale as well as accomplishment of competitive advantage. It is also considered as the way to industrialization. Clustering is really advantageous to small and marginal firms in their initial stages to attain economies of scale and the competitive advantage. When they become large then the cluster concept may not be much significant.