Success factors in micro and small enterprises in cluster development: case of Gullele handloom clusters in Ethiopia

Abstract

Taking the Gullele handlooms cluster development intervention program in Ethiopia as a case study, this paper tries to identify the critical success factors attributable to micro and small enterprises cluster development initiatives. To this end, document analysis, semi-structured interview, and focus group discussion methods are widely employed. It is found in the study that the development of strong trust within the cluster community, stability of key actors of cluster development, the existence of functional networks, adequate physical infrastructures, availability of raw materials, access to finance, the level of production technology and market promotion are essential factors in bringing success to cluster development. The study has also found out that in order to realize the contributions of these success factors within a specific cluster development program, macro level policy improvements, fostering valuable networks and relationships, and upgrading level of cluster concepts among various actors are of critical importance. Finally, to sustain the benefits of cluster development efforts, cluster development agents should facilitate the macro and micro environment of the cluster keeping their interventions intact.