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Industrial Clusters and Micro and Small Enterprises in Africa
Box 8.4 (continued)
The government of Rwanda has long recognized that the ICT, coffee, tourism, and manufacturing sectors enable economic development. This is reflected in the government’s Vision 2020, a plan that aims to transform Rwanda into an information-rich, knowledge-based society and economy by 2020. The infrastructural constraints on growth of the industrial sector in Rwanda are significant. Identification of the sectors and locations for infrastructural support is crucial if the limited resources are to be used efficiently and productively to raise the competitiveness of domestic enterprises. Against this background, Rwanda is launching cluster initiatives organizing coffee, tea, and tourism firms as well as new types of clusters like ICT, dairy, and mining. The number of clusters has grown, but most of them have not yet been studied. Source: Musana and Murenzi 2009.
sector development strategies, with little clarity as to how players at various stages of the value chain will be linked. In particular, spontaneously formed industrial clusters are not in the picture. Several countries in Africa are developing value chain strategies in the context of domestic private sector development. A cluster strategy and a value chain strategy are quite similar. The difference is that, while a value chain approach is transaction oriented and focuses on transactional efficiency within the chain, a cluster approach is more systemic. A cluster strategy includes analysis of a cluster’s value chain and focuses on solving coordination and information failures through better participation of supporting institutions outside the value chain (World Bank 2009a). Cluster projects tend to involve the entire value chain plus any entity that has the potential to influence the cluster and beyond. Such entities include traders, processors, manufacturers, exporters, training institutes, and government standards bureaus. Competitive value chains need to achieve not only efficiency along the value chain but also thickness of each layer, which is the basis for efficiency gains and sustainability. The agglomeration dynamics embedded in natural industrial clusters have the potential to contribute to such thickening of the layers. A cluster policy has to be based on market potential and designed to provide institutional support to clusters that makes sense economically. Natural clusters have grown spontaneously without public