Cluster Development in Small and Medium Enterprises: Key to Success Globally

Small and Medium Size Enterprises have played a pivotal role in boosting the Economic performance of any country. Indian SMEs are serving as backbone for industrial economy. Despite of high growth rates Indian SMEs lack behind globally due to various challenges faced such as lack of Financing, Technological Advancements, Skill Development etc. Cluster Management is one of the strategy which has been world wide accepted in improving the functional performance of SME sector. Clustering offers immense benefits to SMEs organizations as it improves and strengthens the working efficiency by reducing the financial burden at the same time. The paper aim's to study the Role of Clustering in SMEs by examining some recent examples of successful Industries operating globally. The paper also explores different ways of Clustering in SMEs as well as the competitive advantages provided by clustering in various sectors to the Indian SMEs so as to improve its performance on global platform. The results of the study suggest that cluster based approach will not only provide solutions to various problems faced by SMEs but also increase the contributions made by SMEs in the overall economic development of the country.