The research paper draws inspiration from the pioneering work of Michael E. Porter, Professor, Harvard Business School. The paper has been authored by Amit Kapoor, Chair, Institute for Competitiveness & Lecturer USATMC, Stanford University; Bibek Debroy, Chairman, EAC – PM; Christian Ketels, Principal Associate, Harvard Business School and Subhanshi Negi, Researcher, Institute for Competitiveness. Recognizing the critical role of clusters in driving locational competitiveness, the paper takes a granular approach to understanding India's economic clusters and their impact on regional and sectoral competitiveness.
Clusters, as defined by Michael Porter, are geographic concentrations of related economic activities that foster local linkages and spillovers. They are recognized for their ability to foster productivity, innovation, and growth. The granular analysis presented in the paper encompasses sector-specific, gender, and regional aspects which provide a thorough understanding of the composition of the Indian economy, its strengths, and growth potential. Its foundation lies in the understanding that strong clusters are essential for a nation's overall competitiveness and prosperity. The paper leverages robust data from the Periodic Labour Force Survey (PLFS), providing insights into the economic activities, wages, and employment within various cluster categories at both the district and state levels.
Key highlights of the 'The 2023 India Cluster Panorama'
Methodological Breakdown: The paper meticulously details the methodology of the India Cluster Mapping Initiative, providing an in-depth view of how clusters were defined based on the National Industrial Classification (NIC) and the mapping process used to analyse data from the Periodic Labour Force Survey (PLFS) spanning from 2017-18 to 2020-21.
Cluster Landscape: The paper presents a comprehensive overview of cluster compositions in terms of sectors, gender, skills, and employment, providing a detailed comparison of broad and narrow cluster categories at the national level.
Regional Disparities: Through a cluster-based lens, it delves into the substantial disparities in productivity and prosperity across India's different states and districts, shedding light on the role of clusters in influencing economic performance. The role of clusters in shaping economic outcomes is assessed using the three-star methodology.
Policy Implications: The paper as well identifies critical factors affecting cluster strengths and their impact on regional competitiveness. It underscores the importance of evidence-based policymaking and proposes strategies for harnessing clusters to enhance economic growth and inclusivity.
This pioneering effort not only analyses India's top clusters but also identifies districts and states with the strongest cluster portfolios. The findings reveal the concentrated nature of economic activities in key cluster categories and their correlation with regional economic performance.
The unveiling of this research paper comes at a crucial juncture when India seeks to bolster its economic competitiveness and enhance its growth trajectory. The insights from this paper are expected to inform evidence-based policymaking, aid in the formulation of targeted strategies, and drive innovation and collaboration across sectors. With its focus on inclusivity and gender equality, the paper provides a comprehensive view of economic activities at a granular level, offering insights that can guide policies targeting specific skill workers and sectors. ‘The 2023 India Cluster Panorama’ is poised to offer a new perspective on India's economic development, emphasizing the importance of clusters and competitiveness in fostering a resilient and prosperous economy. The findings of this paper hold the potential to reshape economic policies and strategies, driving India towards a future of sustained growth and prosperity.
The Paper is available at https://competitiveness.in/wp-content/uploads/2023/08/Report_India_Cluster_Panorama_2023.pdf
