My Beauty Best Teacher

Chris Blattman points us to new research on shoemaking industrial clusters in Ethiopia:

A major finding is that the growth ofthis industry was driven initially by the massive entry of new enterprises established by former employees of the existing shoe factories but more recently by the growth in enterprise sizes due to improvements in the quality of products, marketing, and management.Such improvements were first made by highly educated entrepreneurs and subsequently followed by other enterprises. While the followers have grown in size, the leading enterprises have grown faster.Such a development pattern appears similar to the experience of successful cluster-based industrial development in China,Taiwan, and Japan.

An industry ceases to grow when the profitability of producing low-quality products falls as their market supply increases relative to marke tdemand. This is typically the case if the increase in market supply is not accompanied by improvements in product quality. By contrast, those clusters where product quality was successfully improved have continued to grow

"...Edited by Banji Oyelaran-Oyeyinka and Dorothy McCormick Industrial Clusters and Innovation Systems in Africa: Institutions, Markets and Policy aims to improve our understanding of how local clusters can be transformed into local systems of innovation and how local clusters can be better connected to global actors...",United Nations University.

Continuing our focus on Industrial Clusters,in the preface of an overview document for the recently concluded Innovation Systems and Innovative Clusters in Africa conference it was noted:

Image courtesy of Mckinsey & Co.

...that firms which operate close to related firms and supporting institutions are often more innovative and therefore more successful in raising productivity than firms that operate in isolation. The innovative cluster approach is thus an appropriate and established tool for analysis of industrial dynamics and for policy initiatives to foster innovations, growth and economic development.Consequently, the debate has now moved from whether or not innovative clusters are important, to how to best organize and manage clusters in order to exploit their maximum potentials. Thus, recently hundreds of cluster initiatives have been
launched, involving nearly all the regions of the world except Africa. Is Africa an exception in these global initiatives? An understanding of the concept and the salient features of innovation systems and innovative clusters, and the critical factors for building and improving them are imof these global initiatives.

Why have Sub-Saharan Industrial Clusters exhibited sub-par performance? How can this be mitigated? Why is this important? Kate Meagher analyses(PDF) three Nigerian examples: The Ilorin "traditional weaving cluster" and the Aba "mechanized garment and artisanal shoe clusters" In her summary she states:
"...the processes of economic ungovernance unleashed in all three Nigerian clusters are not a product of cultural failure or of a failure to form global linkages. On the contrary, the three study clusters display a rich tapestry of production and trading networks operating across ethnic and religious divides, overturning local gender-based divisions of labour, and extending across regional and national boundaries into the global trading sphere. These networks have underpinned the development of market-oriented informal institutions such as training and credit systems, a division of labour, subcontracting arrangements, and supply and distribution systems. Although embedded in ties of ethnicity and religion, these African clusters have also provided a framework for change and innovation, for ethnic incorporation and the rationalization of production and labour relations...the failure to pay proper attention to the role of the state is leading to a squandering of the remarkable informal institutional dynamism evident there,and abandoning clustered firms to the immiserizing governance capabilities of clandestine commodity chains. While efficient informal institutions and global linkages constitute valuable resources for cluster development, they cannot ‘substitute for the state’, as so many cluster analysts seem to believe. Efforts to make them do so are destroying and perverting local forms of economic cooperation rather than promoting it..."

Steve Daniels writing in the Postconsumption:

All throughout the developing world one can find geospatial clusters of informal enterprises that have grown either through an organic capital accumulation process or a government allocation of land. In Kenya, a number of such clusters exist: Gikomba, Kamukunji, Kariobangi, Ziwani, Kibuye, and Quarry Road to name just a few. These clusters start out as grouping of either producers or traders and will likely end up as a mix of manufacturing and market activities. Clustering is what allows informal microenterprises to produce efficiently--they rely on a well-developed ecosystem of producers, suppliers, machinists, and traders to provide services, each with minimal operating costs. Linkages among enterprises can be horizontal (labor pooling, sharing machines, etc.) or vertical (relationships with suppliers and traders, associations, etc.).

Bill Easterly contends that to solve development challenges "problem-solving systems" must be be in existence. This assertion has been on this blog and Timbuktu Chronicles under a number of guises. Be it evolving the culture; informal industrial clusters;startup; ecosystems; etc. Societies that do not evolve autocatalytic,sustainable methods of overcoming their challenges will remain moribund,regardless the level of external intervention:

Development happens thanks to problem-solving systems. To vastly oversimplify for illustrative purposes, the market is a decentralized (private) problem solving system with rich feedback and accountability. Democracy, civil liberties, free speech, protection of rights of dissidents and activists is a decentralized (public) problem solving system with (imperfect) feedback and accountability. Individual liberty in general fosters systems that allow many different individuals to use their particular local knowledge and expertise to attempt many different independent trials at solutions. When you have a large number of independent trials, the probability of solutions goes way up.

A paper by John E. Akotena and Keijiro Otsuka on Kenyan Garment clusters shows:

...that the well educated and highly socially networked tailors who are capable of producing a certain product quality standard are likely to link up with traders to become mini-manufacturers over time. This suggests that transactions with traders enable mini-manufacturers to outperform tailors, thereby contributing to the transformation of the mode of industrial production in developing economies.