Enabling exports.

Islamabad: Small-scale manufacturers face several barriers to growth: low productivity, high cost of inputs, and limited or no access to foreign markets, finance and technology. These barriers often have a lot to do with the size of the firms but evidence suggests that their growth is largely hampered by their 'isolated existence'. Individually, small-scale enterprises are not able to realise economies of scale, which makes it difficult, and costlier, for them to take advantage of market opportunities.

Many countries have helped their small companies overcome these barriers and unleash their potential through technical interventions at small costs. Such interventions become easier and more cost-effective when enterprises facing the same challenges and involved in the production of similar goods or services are located in clusters or closer proximity to one another. The spatial proximity, as well as shared needs and interests of these firms, allows policymakers to foster linkages among them for collective effort to break the barriers impeding them.

Realising the crucial importance of small-scale producers in boosting growth, exports, and creating jobs, the Punjab government launched a Punjab Cluster Development Initiative (CDI) to support growth and competitiveness of key manufacturing clusters in the province. The $6 million initiative is part of the $286 million Jobs and Competitiveness Programme, which is being financed jointly by the World Bank and the provincial government.

'The purpose of Punjab's Cluster Development Initiative is to create an environment for growth and prosperity, upgrade technology and enhance productivity, quality and profitability of small-scale local industries'

"The purpose of CDI is to create an enabling environment for growth and prosperity, upgrade technology and enhance productivity, quality and profitability of local industries," CDI project director Tayyaba Kamal says.

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"The overall objective is to drive productivity and competitiveness of export-focused small-scale manufacturing clusters, build the support infrastructure that underpins collaborative industry activity and address issues like the high cost of doing business, quality and delivery inefficiencies and lack of demand-driven export strategies."

Tayyaba says the CDI experience shows that small, cost-effective technical interventions and a little bit of handholding can foster relationships among and significantly improve...