City Cluster Economic Development

Project Narrative

The purpose of the project was to develop an approach for cities to analyse their competitiveness and to identify ways to facilitating the development of industry clusters. The research was very innovative for the ADB, as it involved an approach of action learning. This is where a local research institutes are used to facilitate the development of a new approaches to project design through local industry partnership. It involves learning by doing process. Industry and government partners are encouraged to work in collaboration to identify issues that are adding to the externality costs of doing business.

Key services provided

Strategic Planning and Management Services (SPMS) working with the Centre for Urban Studies (Dhaka); National Institute for Urban Affairs (India) and Savanatha (Sri Lanka) developed and tested a framework for analysing and developing industry clusters as a means of supporting sustainable economic development in Asian Cities. The second phase of the project involved the preparation of cluster business plans and pre-feasibility studies for ADB loan funds. The cluster analysis was used to enable key elements of strategic infrastructure to be identified that needed strengthening in order to facilitate the development of new economic activities, The gap analysis was able to show skills deficiencies in industry supply chains and quality assurance training needs to improve production output of firms comprised in a clusters. The research resulted in leaning outcomes for industry managers on the advantage of collaborative actions to reduce production costs. The project identified nine industries that have significant potential to develop the economies of Dhaka, Delhi and Colombo economies. Three major projects were identified and developed to support the growth of the ITC and Rubber industry in Colombo and the garment industry in Delhi. The industry partners are now working with government to develop joint education and training faculties to upgrade the skills of workers in different stages of supply chains – especially micro enterprises which need significant training in using new technologies and quality assurance