writing a cluster diagnostic study originators: foundation for msme clusters (fmc), unido

WRITING A CLUSTER DIAGNOSTIC STUDY

Originators: Foundation for MSME Clusters (FMC), UNIDO

Reducing poverty through sustainable industrial growth

Why Do We Need a Diagnostic?

Current status of linkages and support services

What are the key challenges (strategic issues) that each value chain partners face?

Which of these strategic issues can be solved through different routes such as:

investment promotion

Schematic assistance,

Linkages with markets

BDS development/linkages,

institutional strengthening

public private partnership


Objectives

Understand uniqueness of the cluster with respect to:

Firm typicality

Presence & relationship with stakeholders

Joint activities and pressure point(s)

Identify initial entry points into a cluster

Build trust with stakeholders

Spot leaders, implementers, participants

Create a base for future monitoring and evaluation


What Does it Take?

Who does it?

How long does it take?

What are the sources of information?

Secondary

Primary

Does the primary source of information need to be random based?

Who (people/institutions) should be interviewed?

How to validate the findings of the study?

Emerging new models/ thinking?


Steps in Diagnostic

1. Define the Cluster – Product & Place

2. Gather Preliminary Data on number of principal firms, their turnover, number of support firms, BDS providers, other relevant agencies, etc. through

past knowledge of the IA

local area surveys and censuses, district plan,

local bank reports, internet search, etc.

3. Preparation of Questionnaire

4. Selection of Samples

Representatives of all stakeholders are interviewed

Principal stakeholders

Forward linkage providers

Supplier, support institutions,

Associations and/or networks

Policy makers


Steps in Diagnostic

5. Sample Size

Around 8 to 10 interviews of principal firms (for each value chain)

Also in addition 2 to 3 of each type of critical support firms

Relevant technical institutions

Bank, other financial institutions

Relevant MFI

Associations should be interviewed

6. Setting up of interviews

Start off with broad discussions with associations

In absence: Government Organizations (GOs), which have considerable influence or active NGOs


Steps in Diagnostic

5. Guidelines on behavioural aspects

The diagnostic study is not an academic survey understand from an interviewee the set of issues face in the cluster.

Topics should not necessarily be introduced in the order of the questionnaire format, but rather as determined by the flow of discussion

Explaining the purpose of the Project eases the interviewee and enhances chances of a fruitful interview

The interview should not last more than 90 minutes

The interview should not last more than 90 minutes

concentrate on the interview rather than on making notes


Survey Analysis

Enterprise Issues Identify the current strategies of various types of principal firms,

Understand how they manage their central business functions (production, marketing, finance, etc.)

Assess Strengths and weaknesses

List out suggestions that have been given both from the demand as well as the supply side in addressing the issues

Inter firm Organization List how far and in what ways the various current and suggested future linkages

promote or can promote:

Joint learning/ exploration/business promotion about markets, products, processes, etc.

Assessment of Governance Structures Identifying whether any suitable institutional structure(s) exist on which

governance capacity, in terms of capacity to react to challenges/opportunities faced by the cluster (Stakeholder associations/consortiums, technical/financial institutions, local NGOs)


Interviewees to Obtain Information

Support firms (forward & backward)

Service providers

Development agencies

Technical training institutes/universities

Industry/trade associations

Networks

Relevant policy bodies


Interviewing Techniques

Sampling/complete enumeration – technique and sample size

5 stages of interview: comforting, trust building, discussion on area of interest, derive joint action, take reference for joint action/interview

Start with association and knowledgeable person

Interview duration: 90 minutes

Recording of information later

Preferably a two-person unbiased team – CDA is a must

Mix types of stakeholders for interviews


Issues for Other Stakeholders

Interview with respect to interactions with principal firms

Focus on areas of direct relevance to principal firms

Interview only those that have high (existing or likely) inter-connectivity with principal firms

At times complete enumeration is required

Done both for AOBO and cluster structure


Content of a Diagnostic Study

Defining the cluster, product and location

National/international industry/cluster scenarios

History of the cluster and its turning points

Present status of the cluster

Analysis of business operations (AOBO) of principal stakeholders

Intra and inter stakeholder dynamics

SWOT

Cluster map

Vision, target and implementable Strategy

Tentative action plan


Characteristics of a Diagnostic Study

Not just an information gathering tool. Part of the process

It is an ongoing process

Those involved and not temporary outsiders for study – long term stakes

Validators are the cluster stakeholders themselves

Focus is on strategic action, not just finding problems

Focus not on individual firms, but groups of firms, institutions, other actors and their inter-relationships

From firm to cluster

Focus is to study the dynamic process: what works

writing a cluster diagnostic study originators: foundation for msme clusters (fmc), unido

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