There is an urgent need to have a coordinated approach on the development of growth poles and clusters in India, and involving the Indian diaspora in its development process. We should not hastily move towards an umbrella legislation of SEZs, recognising that SEZs are an integral part of growth poles, and hence policies towards them should not be taken separately. Innovative clusters are a local phenomenon, but their long-term dynamism rests on their becoming a part of a global network of similar clusters and participating in the circulation of human capital among them. Just like the East Asians, we have to find ways of meaningfully connecting the Indian diaspora with local entrepreneurs, encouraging technical interaction bet-ween local and foreign firms with skilled workers from abroad bringing ideas, technology transfers, and access to foreign markets. The coordinated approach urgently needs a master plan for clusters that should benefit from the rich experience of East Asia.
Bangalore, Hyderabad, Chennai, and Delhi are examples of Indian growth poles. They are attracting a lot of foreign investment. They are also contributing significantly to export earnings. Bangalore, for e.g., contributes 40% of Indian services exports ($8 billion) and about 12-15% of Indias merchandise exports ($6 billion). It displays the basic characteristics of a growth pole around which several specialised industrial clusters are developing in Hosur, Ramanagaram, and Mysore. Gurgaon and Noida are fast developing as clusters around Delhi. Clusters are also mushrooming around Chennai and Hyderabad.
Clusters need not be so closely linked to mega cities. There are numerous examples of stand-alone clusters in East Asia. Japan has over 500 clusters centred on low-tech activities. China has numerous clusters producing footwear and hosiery. In India, Tiruppur and Surat are the best examples of such clusters. Stand-alone clusters exist both in manufacturing and in services, and are sub-divided into low-tech clusters that make up the majority, and high-tech clusters that depend on continuous innovation. India should aim for both, given its rich endowment of skilled workers here and abroad.
Involve the Indian diaspora in the development of economic clusters
World class infrastructure required to develop clusters and growth poles
The process of creating dynamic poles and clusters can be accelerated through the joint efforts of the Centre, the state governments and the private sector. The role of the government must be collaborative, not authoritative.
The writer is principal advisor, CII. These are his personal views