If you cannot stand alone, try a huddle. It is an idea that may not always work with arthritic patients. But when it comes to the northeast region (NER), it seems to be working wonders.
Known as business clusters or simply clusters this unique business formula for collective well-being is believed to be particularly effective among societies suffering from a deep sense of neglect and isolation, like the states in the NER for years since independence.
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For these seven sisters and one brother, as they are sometimes called, bonding is more than a mere sign of sibling solidarity. It stands for an all new “cooperative” way of doing well in business by working hand in hand. Call it the rustic extrapolation of M&A!
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| “We opted for cluster development because despite a slew of training programmes small enterprises were falling sick at an alarming rate.” — Dr Sriparna B Baruah
Head, Centre for Industrial Extension |
K Ahmed, Director, Indian Institute of Entrepreneurship (IIE), where the Regional Research Centre was set up in 2008 to incubate the cluster idea, is convinced that clustering “is the only way to bring about development in the north-east.”
So, what exactly are business clusters and how do they work? Put simply, small solo entrepreneurs engaged in similar businesses across a region come together to form groups or “clusters” to achieve greater scale, knowledge and strength, the key ingredients of success in cut-throat modern markets.
Consider for example, the brass and bell metal cluster at Hajo in Assam and the Eri (a type of silk indigenous to Assam) cluster at Nongpoh in Meghalaya. These clusters are in fact, groups of specialized suppliers, service providers, ancillary unit owners and manufacturers, who have joined forces in quest of another business imperative of our times: optimum efficiency and productivity. Unity, they have realized, is indeed strength.
How are these clusters created?
First, a list of possible locations for setting up a cluster is drawn up. Then each of the sites is evaluated for viability in relation to the market requirements for the business. This is followed by “soft intervention”, or training programmes and seminars, designed to build capacity. Finally, a cluster site is made ready for hard intervention—a stage where the nuts and bolts issues are addressed and the business takes shape and form. But who does all this ground work? Men like Mr Ahmed who have been involved with the RRC, since its inception in 2008.
Says Dr Sriparna B Baruah who heads the Centre for Industrial Extension at the IIE: “We opted for cluster development because we realized that despite a slew of training programmes small enterprises were falling sick at an alarming rate. Clustering, we believed, was the only viable remedy.”
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| “Clustering is the only way to bring about development in the north-east.” — K Ahmed
Director, Indian Institute of Entrepreneurship |
Before setting up the RRC, development experts at the IIE experimented extensively with the cluster idea at locations across the NER. Notably, they started a handloom cluster in Imphal, a notoriously difficult terrain for business. However, the Imphal experience proved to be remarkably successful and yielded useful lessons for future clusters set up by the RRC.
Special Purpose Vehicles: Village B-Schools
After selecting a site for a business, people from the RRC like Ms Baruah get busy with teaching what they call Special Purpose Vehicles or SPVs, which are in a manner of speaking retro-fitted Executive Training Programmes. For the communities concerned (usually artisans, craftsmen and traders) the SPVs are like B-schools, designed to train them in the art of managing collaborative businesses. All this is part of the preparation for the period when the RRC is no longer present at the clusters.
The participants sit through classes on the basics of the cluster business model, which in essence is a series of “how to’s.” The courses are designed to help the participants run and manage clusters on their own, once the RRC managers have moved out. The curriculum includes lessons on how to make the most of utilities like the Common Facility Center (CFC), which provides the participants with machines and technology tools that would not have been accessible to them had they continued operating independently. In addition monthly meetings involving self-help groups are organized to educate cluster members about the benefits of using techno aids like artisan cards. Similarly, there are a range of other meetings organized to help the clusters work collaboratively and resolve their own problems.
The immediate priority for the RRC is to tap the best possible help for different clusters and thereby enhance their business prospects. Efforts, for example, are currently under way to involve the Department of Sericulture to source knowledge and the best of Eri seed for the 830 weavers who are part of a cluster engaged in the silk business in Nalbari, a small, nondescript village in the state of Assam.
| Leading the Charge |
| Micro, small and medium enterprises – Development Institute (MSME – DI) manages four clusters in the NER that produce a range of items: brass and bell products in Hajo to knives in Jorhat. “We are creating awareness among unemployed youth and providing them with training programs for the clusters” says SR Payeng, Deputy Director, MSME – DI. National Bank for Agriculture and Rural Development has six on-going cluster development programmes in different parts of Assam, focussed on cane, bamboo, sericulture and pottery items. The basic thrust at these clusters is on building capacity among the stakeholders. All Assam Small Industries Association is a non-governmental organization that works with clusters that are engaged chiefly in producing incense sticks and knives used in tea gardens. |
Similarly, the RRC has helped artisans in the village of Malom in Assam organize themselves into a cluster and access the knowhow and finances they desperately needed to turn their exceptional skills in crafting artificial jewellery into a viable and lucrative business. The entire village depended on the non-gold jewellery for their livelihood. But life was a struggle as they could neither raise the finances nor reach the markets for their exquisitely crafted products. But the cluster approach has changed all that.
The help is extended at every stage of the incubation process, from helping villagers learn how to open bank accounts to providing them with business specific training and access to markets. In the Thoubal district of Manipur, for example, the village artisans were much too ignorant to even understand what a bank was let alone knowing how to operate an account. Their business cluster has however been a life-changer.
Says Dawoo Brajabashi, a cluster member, who now owns a bank account among several other symbols of newly found prosperity: “We always knew how to work with the Kouna fabric. Now, because of the cluster programme we also know what sells in the market. We now make designs that fetch us a good price.”
A design development programme was conducted by the RRC recently at Thoubal, where artisans were taught 15 new designs over 15 days flat. And there is more to the story: a retail outlet based in Bangalore has asked for samples of Thoubal’s new designs, making this the very first known instance of a cluster gaining access to a major metro market.
| Major Clusters |
| ASSAM The Bagulamari Jute Craft Cluster Location: Dhubri Footprint: Bagulamari and Aironjongla villages Participation: Around 170 household units housing 500 active artisans. Products: Door mats, wall hangings, toys, table mats, carpets, hats and bags. The Pyranga Eri Cluster Location: Boko Footprint: Pub Pyranga and Panchim Pyranga villages Participation: About 42o households engaged in Eri rearing and weaving. Products: Eri Handloom Products Dhamdhama Handloom Cluster Location: Nalbari Footprint: 35 kms around Nalabari Participation: 830 weavers who work at 570 looms |
| MANIPUR Greater Imphal Jewellery Cluster Location: Imphal Footprint: Wahengbam Leikai and Malom villages Participation: 120 artisans Products: traditional designed jewellery used for ceremonies and marriages. Malom is engaged in making modern designer jewellery. Khangabok Kouna Cluster Location: Thoubal Footprint: Five villages in the Thoubal district Participation: 280 households Products: Kouna stools, Shoes, flower baskets, cushions, baskets, hats and bags. |
| ARUNACHAL PRADESH Tawang Carpet Making Cluster Location: Lhou village of Tawang Footprint: Lhou Products: Carpets |
| MIZORAM Bamboo Cluster Location: Bairabi Participation: 200 families Baktawng Carpentry Cluster Location: Baktawng Participation: 335 artisans of the Pu Ziona Pawl Products: Carpentry and pottery items including door panels, doors and windows, ventilation frames, dining tables and beds. |
| MEGHALAYA Umden Eri Cluster Location: Nongpoh Footprint: Ribhoi district Participation: 246 women artisans |
Similarly, in insurgency torn Mizoram, around 25 cluster enterprises have come up after the state government rolled out its much talked about Bamboo Policy in 2002. Members were encouraged to form Self Help Groups and learn to save some of their incomes in banks. The effort at all times was to encourage these people learn to solve their own problems and gain relevant exposure.
Recently a group of artisans from a carpentry cluster in Baktawng, a back-of-beyond village in Mizoram, travelled all the way to Saharanpur in UP, a town globally famous for its handcrafted carved wood products. The tour, a part of an exposure visit programme organized for the group, was to help the artisans understand the dynamics of a cottage industry that employs nearly half the population of the town. It was to help them get a first-hand feel of how their business is being done in a different and much larger market.What sets the Umden Eri cluster in Meghalaya apart is the availability of skilled artisans and their expertise in natural dying. Every house in the region is involved in cocoon cultivation, rearing, spinning, dying and weaving their indigenous designs. “This area has a huge potential of getting converted into an Eri Hub,” says Ahmed.
With the exception of Nagaland and Sikkim, all the above-mentioned cluster programmes are through with the initial stage of ‘soft intervention.’ What helps is the fact that the RRC also acts as a technical agency for the cluster set up by the Khadi and Village Industries Commision (KVIC) clusters under the Scheme of Fund for Regeneration of Traditional Industries (SFURTI).
RRC's objective is to help the clusters eventually establish their own brand identities and gain access to national if not international markets. While global markets might still be some distance away, the fact is that for some of the poorest craftsmen on the fringes of the country, clusters have awakened new hope. For these largely unlettered but brilliantly gifted craftsmen, it suddenly makes business to stand and walk together—if possible in a cluster!
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