AlappuzzhaBDS


		Implementing Agency:

The Project

SMEs form the bedrock of Kerala’s Coir industry & the Indian economy. As the economy moves from low- to mid-income status, the economic relevance of SMEs will also grow further, with SMEs accounting for an increasing share of both gross national income and employment. Ensuring that SMEs in Kerala have access to high quality business development services (BDS) is central to supporting their growth, and by extension, the growth of the whole economy of Kerala & India. Therefore, the Small Industries Development Bank of India (SIDBI) is leading the implementation of a multi-donor project – Govt. of India , World Bank , DFID , KFW & GTZ to increase the flow of credit and related support services to SMEs in Kerala’s Coir cluster , with BDS serving as a key enabler.

This is a vital and challenging undertaking. For this reason, we have assembled a partnership between Cluster Pulse, an India-based organization dedicated to SME development, and OTF Group, an international competitiveness consultancy based in USA, to ensure that we bring a hybrid blend of experience and expertise to the challenge. Through this partnership, we combine intimate knowledge of India’s SMEs and their business challenges, with international learning on SME development and cluster growth strategies; we bring rigorous analytical and strategy formulation expertise combined with practical, hands-on implementation experience. And all of this in the context of the specific sub-sectors on which the project focuses.

The approach that Cluster Pulse – OTF group will use in implementing the project begins with understanding the dynamics and business challenges of the coir floor covering sector in Alappuzha, using a number of cluster diagnosis methodologies, many of which have been developed by CP -OTF and its partners in business and academia. With this baseline understanding, we will analyze the BDS sectors that serve these sub-sectors, which will culminate in strategies to grow market-based provision of BDS for these particular sub-sectors. These strategies form the foundations for business plans that specify how the project will support the development and growth of a private market for BDS, and the resources required to do so.

Implementation of the business plans will be guided by a number of operating principles. Key among them is one of minimizing market distortions as a result of the project’s interventions. Therefore, all interventions will be carefully tested with SIDBI, project partners and, most importantly, the project’s clients during the conceptualization stage. For this purpose, a public-private work group will be created for each cluster to act as both a steering group and feedback channel for the project. This will ensure the project maintains it relevance and remains responsive to its clients’ needs.

Implementation will also focus on developing new and innovative models of BDS market support. This is a relatively new field, and one towards which this project will make considerable contributions. Therefore all project initiatives undertaken will be developed based on how they can be scaled up and replicated in other clusters and sub-sectors.

The project will conclude with an international workshop that will present the learning developed over the course of the project, so as to encourage the replication of best-practices and avoidance of pitfalls. In this way, the project will contribute not only to the growth of vibrant BDS sectors serving target clusters in India, but will have an impact on a wide range of business sectors in a variety of countries.

The fostering of a skilled and entrepreneurial BDS sector will lead to a self-supporting loop of improved innovation and competitiveness in Alappuzha's coir industry.