Cluster Based Approach Critical for Sustaining South's Edge
Written by James   
Tuesday, 29 March 2011
Bangalore: A recent report prepared by CII in association with McKinsey & Co suggests that Industry and respective State Governments in South India should adopt a cluster-based growth approach, bridge physical and social infrastructure gaps, and work towards environmental sustainability to ensure the region’s rich potential is well capitalized.

According to the report, titled 'Retaining the Edge: Sustaining South India’s Growth Momentum', South India’s advantages in economic and social development indices give it the potential to sustain accelerated growth over the next decade, and create global scale in select sectors.

Southern States score higher than the national average across several developmental  parameters, with Tamil Nadu, Andhra Pradesh & Karnataka in the lead.  Despite its strong overall position, recent years have seen South India’s GDP growth rate slowing down, and in some states, below the national average, according to the report.    Creating huge physical infrastructure, managing talent availability, time management in policy making and implementation, and building the capacity in the industry to move up in the value chain are some of the challenges need to addressed in order to sustain South India’s growth momentum, says the report.

The report was released during the Conference on "The Next Wave of Growth – South India" at the CII Southern Region Annual Meeting.

Delivering the keynote address, Arun Maira, Member – Planning Commission, Government of India, said, "There is an immediate need to address several systemic challenges cropped up due rapid growth phase India is experiencing now. Unless we address these systemic challenges in the areas of capacity building and interaction with the people, it is not simply possible to maintain the same rate of growth for longer periods. Even at planning commission, though we prepare plans for every five years, we brought in several systemic changes that enhance seamless interaction with civil society and look at implementation part of the plans."

"40 different divisions with different focus areas are now working and interacting on cross platform basis and identified 12 systemic challenges. Then we started using tools like Internet, Face Book, and UN solutions exchange to interact with people of India on real time basis. Youth of India have been participating in this task and they helped to bring down the number of systemic challenges to six including better implementation, capacity building, and investing in human skills. We can take this forward by setting up a mechanism that takes into account widespread public opinion. Public Private Partnership must be extended to Public, Private, People partnership," Arun Maira, added.

"The whole world is focusing on India for the growth rate it is achieving.  Within India Southern states are not only contributing to a quarter of GDP, but also ranking in top 10 states that are achieving highest GDP rate. Most importantly Southern states are going by focused approach towards certain industries. For example, Karnataka is not only the leader in IT sector with 34% contribution, it is also became aeronautic industry hub by contributing 75% to the nation’s industry. Similarly Tamil Nadu is contributing to automobile and textile industries, Andhra Pradesh is contributing to IT and Pharma industries and Tourism is the focus industry for Kerala. This kind of clustered approach will help in achieving sustainable growth," said Kris Gopalakrishnan, Chairman, CII Southern Region.

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