Innovation Clusters National Innovation Council Clusters in India

Innovation Clusters National Innovation Council

Clusters in India MSMEs represent 45% of manufactured output and 40% of exports Engines for new job creation in both organized and unorganized sectors Estimated 6, 000 MSME clusters in the country Need support to innovate, grow and stay relevant in globalization world today

Challenges facing MSMEs Inadequate Infrastructure Low Access to national and global markets Lack of Skilled Manpower Low Access to Credit Low Levels of Innovation and little R&D MSME’s High Cost of Raw Materials

Our Approach - Innovation Clusters • Organize MSMEs in cluster to act as one – create association • Link them to national resources like R&D labs R&D Tech • Connect to local Universities Skills Financing • Connect to banks & financiers Mentors Cluster Association • Connect to Govt. programs & schemes Create local innovation ecosystem as a platform for development Established as a PPP model from Day-1 with contributions from all players Government Programs Industry Knowledge

Local Association Takes Responsibility • Brings economies of scale and collective bargaining power into play • Represents interests of all members of cluster R&D Tech Financing Mentors CIC Create the Cluster Innovation Center (CIC) CIC will spearhead collaborative / partnering initiatives Skills Cluster Association Government Programs Industry Knowledge

Pilot - Industry Clusters Krishnagiri, Tamilnadu Agriculture Thrissur, Kerala Ayurveda 4 corners of India Handicraft to High-Tech Low-skilled to skilled Agartala, Tripura Bamboo Ernakulam, Kerala Furniture Ahmedabad, Gujarat Life Sciences Moradabad, Uttar Pradesh Brassware Faridabad, Haryana Auto Components 1, 000 people employed 85, 000 companies $4 Billion Revenue

Ecosystem Building 17 partners 9 partners 2 partners Total of 39 partners joined hands Central and State Government bodies National and Regional R&D institutions National and Local Industry/Professional bodies Financial institutions Local educational institutions 4 partners

Innovations in the past 1 year 6 -8 new products 10 -12 new processes 2 new centers As examples National Innovation Council Confidential

Efficient Coal Furnace Brassware Cluster Before (a) (b) (c) (d) (e) (f) Item Brass melt (in kgs) Coal consumption (in kgs) Gross Revenue (in Rs. ): (a) * 25 Cost of coal (in Rs. ): (b) * 28 Estimated loss of brass during melting Average daily income per furnace: (c) – (d) – (e) Field Estimations by CSIR-NML After Pre-innovation 80 25 2, 000 700 600 700 Post-innovation 96 20 2, 400 560 600 1, 240

Improved Product Quality Brassware Cluster After 3 months Uncoated Coated Before After 50 x more storage time (1/2 weeks to 2 years) 25 -30% reduction in cost of lacquer Enhanced product quality and better market acceptability Were possible because of the

Moradabad Ecosystem Created R&D CSIR-NML Tech CSIR-CECRI Skills Cluster Association Financing Mentors NIn. C CSIR DSIR MCIDS CIC Government Programs ILFS Industry Knowledge Local Innovation Ecosystem Plan MHSC FICCI Actual Ecosystem created at Brassware Cluster

Our Process Innovation Needs Assessment Step 1 Partner Engagement Step 2 Prototype Co-development Step 3 Market Validation Step 4 Commercialization Step 5

Innovation-Needs Assessment • Cluster identifies – Market demand, known gaps, market opportunities and market trends • Cluster prioritizes – Areas with potential for max impact – Low hanging fruit – Willingness of cluster to invest – Needs cluster to partner – Inclusive in nature: M -> S -> M Es 4 -6 weeks

Partner Engagement • Talk to multiple potential partners • Agree on activities and deliverables • Create action plans • Scope out resources needed • Enter into formal PPP partnerships for collaboration 4 -8 weeks

Prototype Co-development • Partner visits cluster, gathers specs and creates prototype • Cluster members visit partner facility if needed, validate, provide feedback and help refine the prototype • Partner refines prototype • Cluster members validate the prototype at their locations and provide feedback • Partner creates final version • Partner and cluster co-invest resources needed 12 -24 weeks

Market Validation • Final prototype embedded in the cluster for a few months • Cluster conducts demonstrations, road shows, etc. • Feedback from potential customers • Confirm acceptability • Cluster invests in the validation 8 -12 weeks

Commercialization • Open invitation to cluster members • Interested parties create business proposals and vetted by partner, cluster • Best party recommended by cluster • Transfer from or formal collaboration with partner established • Innovation made commercially available to the cluster 8 -12 weeks

Value from Mango Waste Agriculture Cluster After Before Item Calorific Value Firewood Briquettes Savings 2400 kcal 3800 -4400 kcal Estimated by Cluster Cost per tonne Rs 5, 000 Rs 1, 000* Rs 4, 000 Consumption Expenditure/day 10 tonnes 6 tonnes Rs 50, 000 Rs 6, 000 Rs 44, 000 Selling price per tonne Rs 4, 000 -5, 000

Storage & Export of Fresh Fruit Agriculture Cluster Before After Increase shelf life of fresh fruit from 7 days to 35 days Open new markets : EU, North America and Japan Estimated by CSIR-CFTRI

Product Diversification Agriculture Cluster Before After Additional income of around Rs. 150/- per day for women at SHGs Potential reduction of 50% in processed pulp inventory Estimated by Cluster

Improved Wood Seasoning Furniture Cluster Before After Item Estimated by Cluster Cost at Micro Unit in Rs Raw material Seasoning (optional) Labour Electricity Polishing Materials** Packing Total Cost of Production with seasoning 910 155 351 Manual cutting 198. 75 32. 34 1, 647. 49 805 115. 5 145 40* 265*** 26. 60 1, 397. 10 Selling Price 2, 000. 00 2, 280. 00 Cost at CFC in Rs

Contemporary & New Designs Furniture Cluster Before After Expand Domestic and Export Market

Semi-mechanization Bamboo Cluster Before After Estimated 70% reduction in wastage Estimated increase of artisan income from Rs. 150 to Rs. 250 Estimated 50% increase in yield from same resources Estimated by TBM

Mechanization of Stick Making Bamboo Cluster Before Under Development Low-cost automation of Agarbatti manufacturing Potential 2 -3 x increase in artisan income Estimated by NIT-A

Industry-University Linkages Auto Component Cluster Apply academic expertise to industry (SME) problems Industry focused projects and innovation

Standardized Production Processes Ayurveda Cluster Before After Quality control (Anti-Diabetes formulation) and requisite certifications Potential access to export market

Commercialization of R&D for Entrepreneurs Biotech & Pharma Cluster Transfer of technology from public R&D labs Handholding and incubation of entrepreneurs

How can you engage • Central Ministries and State Governments being asked to replicate and adapt the model in more clusters • NIn. C will work with interested parties and provide – Knowledge, training and handholding support – Manuals and workbooks Visit: www. innovationcluster. gov. in National Innovation Council Confidential