Description
Cluster Development Plan Framework
Case of Study on Cluster Development Plan Framework
ABSTRACT From the second half of 20th century different development model was created. Today development model base on small and medium size enterprises1 has become the centre of several countries consideration. In multifarious articles different model was discussed. The two important development models are as follow: 1- Development model base on large enterprise 2- Development model base on strategic cooperation of small and medium size enterprises In this article the two development models are described and the Iran industrial situation is analyzed as well, than the academic literature is reviewed in order to select the best matching development model for Iranian industries. The result of Iran industrial analyses indicates that SMEs are majority of industrial structure of the country and they are geographically distributed. Therefore the main policies of the country should focused on the SMEs and because there is a lack of large enterprises in the country therefore the model for development should be concentrated on strategic cooperation of SMEs while other information specify that cluster are the most suitable form of SMEs development. In this article based on the two main facts - academic literature and Iran industries condition- a development framework is recommended. KEY WORDS
Small & Medium size Enterprise (SME), Business Incubation Centers (BICs), Industrial
Clusters, Industrial District
INTRODUCTION The experience of many countries, both developing and developed, has shown that the SME sector can make a substantial contribution to industrial and economic development for a variety of reasons. First, it supports the mobilization of national resources, resulting in the creation of employment opportunities, the creation of
1
wealth, and consequently the alleviation of poverty. (Khalid Nadvi and Stephanie Barrientos, 2004) Second, it assists in the mainstreaming of such disadvantaged social groups as youth or women, whose capacity to contribute to the economic development of their countries are often constrained. Third, the SME sector can play an important role when privatization activities have to be carried out, since SMEs are often able to absorb the resulting redundancies in manpower. Fourth, SME development promotes democracy and a civil society as it stimulates entrepreneurs to participate in the economic, political and social system of the country. Finally, the SME sector has proven to be flexible and innovative; in a number of sectors SMEs have considerable comparative advantages over large enterprises, which enable them to respond more quickly and effectively to changing, and increasingly global, trends. (Tabatabaei, 200 4)
STATISTICAL OVERVIEW OF SMES IN IRAN As shown in Table 1, 98.4% of all businesses are micro enterprises with 1-9 employees, whereas the total of small businesses with 10-49 employees amounts to only 1.42%. Obviously, there is an imbalance between the large number of micro enterprises and the marginal number of small and medium sized businesses. It may be noted that the absence of a reasonable number of medium-sized enterprises, which amounting to only 0.1% of the total number of enterprises, is negatively affecting Iran's ability to produce for the export market. From an international perspective it has come to be recognized that medium sized businesses, with 50-250 employees, typically account for a relatively large share of a country's exports, as they are more readily able to avail themselves of the technical expertise, manpower, marketing skills and financial resources to participate in international business. Table1 SMEs Classification in Business Sectors and Categories
Business Sector
1-5 employees 6-9 employees 10-49 employees 50-99 employees
Cluster Development Plan Framework
Case of Study on Cluster Development Plan Framework
ABSTRACT From the second half of 20th century different development model was created. Today development model base on small and medium size enterprises1 has become the centre of several countries consideration. In multifarious articles different model was discussed. The two important development models are as follow: 1- Development model base on large enterprise 2- Development model base on strategic cooperation of small and medium size enterprises In this article the two development models are described and the Iran industrial situation is analyzed as well, than the academic literature is reviewed in order to select the best matching development model for Iranian industries. The result of Iran industrial analyses indicates that SMEs are majority of industrial structure of the country and they are geographically distributed. Therefore the main policies of the country should focused on the SMEs and because there is a lack of large enterprises in the country therefore the model for development should be concentrated on strategic cooperation of SMEs while other information specify that cluster are the most suitable form of SMEs development. In this article based on the two main facts - academic literature and Iran industries condition- a development framework is recommended. KEY WORDS
Small & Medium size Enterprise (SME), Business Incubation Centers (BICs), Industrial
Clusters, Industrial District
INTRODUCTION The experience of many countries, both developing and developed, has shown that the SME sector can make a substantial contribution to industrial and economic development for a variety of reasons. First, it supports the mobilization of national resources, resulting in the creation of employment opportunities, the creation of
1
wealth, and consequently the alleviation of poverty. (Khalid Nadvi and Stephanie Barrientos, 2004) Second, it assists in the mainstreaming of such disadvantaged social groups as youth or women, whose capacity to contribute to the economic development of their countries are often constrained. Third, the SME sector can play an important role when privatization activities have to be carried out, since SMEs are often able to absorb the resulting redundancies in manpower. Fourth, SME development promotes democracy and a civil society as it stimulates entrepreneurs to participate in the economic, political and social system of the country. Finally, the SME sector has proven to be flexible and innovative; in a number of sectors SMEs have considerable comparative advantages over large enterprises, which enable them to respond more quickly and effectively to changing, and increasingly global, trends. (Tabatabaei, 200 4)
STATISTICAL OVERVIEW OF SMES IN IRAN As shown in Table 1, 98.4% of all businesses are micro enterprises with 1-9 employees, whereas the total of small businesses with 10-49 employees amounts to only 1.42%. Obviously, there is an imbalance between the large number of micro enterprises and the marginal number of small and medium sized businesses. It may be noted that the absence of a reasonable number of medium-sized enterprises, which amounting to only 0.1% of the total number of enterprises, is negatively affecting Iran's ability to produce for the export market. From an international perspective it has come to be recognized that medium sized businesses, with 50-250 employees, typically account for a relatively large share of a country's exports, as they are more readily able to avail themselves of the technical expertise, manpower, marketing skills and financial resources to participate in international business. Table1 SMEs Classification in Business Sectors and Categories
Business Sector
1-5 employees 6-9 employees 10-49 employees 50-99 employees