Cluster Dependency,Social Capital and Social Innovation : Insights from the Engineering and Plastic Clusters in Chennai, South India

In most developing countries a focus on the development of MSME or Micro,Small and Medium  enterprises is evident.Operationalising this goal in the Indian context a conscious planning has been adopted not only to strengthen existing enterprises, but also to create `clusters' of such enterprises. The formation of individual clusters is not new and it has been imitated successfully in the creation of the service clusters -the IT and Biotech industry.However, the traditional manufacturing clusters are still very significant in their contribution to the economy both in terms of labour absorption and capital investment.

In this paper we discuss the nature of functioning of two such clusters -engineering and plastic in and around the city of chennai,south India. The city however is well known for its automobile clusters.Significantly different in size, technology used and labour utilised,these `clusters' have`innovative' practices to mobilise labour,access technology and capital and sustain productivity. Sharply different in terms of their sensitivity to regulations by the state,they nevertheless manifest some similarities in terms of operation. Significant differences are also observed. The plastic clusters face regulations and sanctions to a greater extent in the context of the environment where they are located.As most of their labour is unskilled `social capital' in  mobilising continued labour supply seems essential and predominant in hiring practices.

The paper discusses some of these aspects based on insights obtained from a  sample survey of  these clusters.Questions raised include

How do they ensure continuity of labour?

How do they access capital and technology?

How do they sustain production and marketing?

Essentially the paper highlights the strong inter-dependency of units among the cluster in a domain of high competition. The insights drawn highlights the innovative practices at the workplace in a devloping country like India  in the context of MSME