Promoting Micro, Small and Medium Business Enterprises by Integrating the Co-Operative and Cluster Development Models

Abstract

Cluster development approach has been proved beyond doubt to be among the reliable means to promote economic development in various countries. In Tanzania, the model has been implemented for some years by various actors in public and private sectors to promote micro, small and medium enterprises (MSMEs). Adapting a co-operative model can be useful to create strong and sustainable clusters. This paper intends to bridge the gap by adding knowledge on the integration of the co-operative model in cluster development initiatives in Tanzania and contribute the same on policy reforms aiming at the cluster and co-operative development. Specifically, the paper makes the review of current initiatives in cluster development and shares the options in positioning the co-operative model into the clusters approach, key dimensions to consider, the process to follow and market orientation in promoting co-operative-based clusters. The paper has been written based on the critical review of various published works of literature and internet materials relating to cluster development in Tanzania and other countries. The exploratory review approach was applied. The paper found that the cluster development approach has been implemented for years in Tanzania but put less emphasis on integrating the co-operative model. Further, the paper shares on the need for policy and strategic framework in promoting the clusters. The paper concludes that the cluster development approach is essential in promoting economic development in Tanzania but faces various challenges which in some ways hinder the creation of strong and sustainable MSMEs. Integrating the co-operative model can be among the options but such initiative must involve careful planning and stakeholder involvement