The cooperation of the Small and Medium Enterprises (SMEs).and large enterprises is becoming more important as a tool for economic development of a country. Entrepreneurs tend to work together in order to share their competencies, consolidate limited resources, and hereby, increase their profitability.
It is emphasized that the role of clustering is crucial in the development of real sector, as organisations may benefit from economies of scale and extend the operation limits.
The Bank of Industry (BOI) explained that industrial clusters would provide a platform for enterprises to share infrastructure, equipment and knowledge, leading to economic transformation.
With this, industrial clusters will be seen as a group of manufacturing firms localised in a particular industrial environment.
Typical examples of industrial clusters are Aba leather cluster (Abia), Aba fabrics cluster (Abia), Kano leather cluster (Kano), Nnewi cable and spare parts clusters (Anambra), Apapa cluster (Lagos), and Ikeja cluster (Lagos). Others are Amuwo-Odofin cluster (Lagos), Ogbaru cluster (Anambra), Kaduna leather cluster (Kaduna), and Agbara cluster (Ogun), among many others.
Recently, the Minister of Industry, Trade and Investment, (FMITI), Dr Doris Anite, says the federal government plans to establish more industrial clusters as well as revive existing ones to drive Small and Medium-sized Enterprises (SMEs) and industries across the country.
Speaking on businesses utilising Cluster For Shared Services, an entrepreneur and business management expert, Dr Timi Olubiyi says clusters connect and develop businesses of the same field.
He stated that “the cluster approach is a strategic concept that emphasises businesses working closely together in geographic proximity within the same industry.
“This collaboration fosters mutual growth, innovation, and competitiveness. Essentially, it’s about turning competition into cooperation. Clusters can allow small companies to combine advantages with various benefits. Hence, the clusters are important operators in a region’s economic growth.”
Advantages Of Business Clusters For Businesses
Increased Productivity
By being close to other similar businesses, a company can easily access a broad range of relevant goods, services, knowledge and infrastructure.
Increased Innovation
In a business cluster, businesses can more easily collaborate with related businesses because as they are close by. This can assist a company with the creation of new products or services.
Increases Business Visibility
Small businesses are seen by more people because they are near other similar big businesses.
Improved Brand Perception
People might link a business with the quality of other products from the cluster in which it trades.
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