Industrial Clusters and SME Promotion in Developing Countries

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SMEs make up the bulk of enterprises in developing countries and make a significant contribution to employment and economic growth. This paper takes stock of best practices in industrial clustering and SME promotion in Commonwealth developing countries. It provides examples of cluster formation, policies to stimulate cluster development and guidelines for business development services for SMEs.



A Cluster Perspective

Interest in clusters has grown with the realisation that some of the richest regions in both developed nations such as Italy and Germany, and in developing countries such as Brazil, share a particular characteristic: they are home to groups of interlinked firms that tend to collaborate technologically and/or strategically. These groups of firms are often referred to as clusters. Examples from developed nations, such as the textile industry in northern Italy, shipbuilding in Glasgow, and computers and software in Silicon Valley, are well known (for some examples, see Swann, Prevezer and Stout, 1998).


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