Encouraged by the potential for growth and enhancing their business performance, Jamaican enterprises are coming together to form themselves into
clusters” so that they can achieve greater competitive advantage in the local and international marketplace.  Technical experts from the Private Sector Development Programme (PSDP) have been working with hundreds of firms and their support institutions to help them formulate cluster development concepts, as a major avenue for growth among Micro Small and Medium size Enterprises (MSMEs).

This activity is part of the PSDP’s Cluster Sector Initiative (CSI) which will provide technical and financial assistance for the strengthening and development of up to ten clusters in Jamaica in four key sectors i.e. creative industries, tourism, agribusiness and services, over the next two years. 

Clustering is a tried and proven business approach that fosters inter-firm collaboration to maximise available resources for greater business performance and profitability.  A cluster may be defined as a group of inter-related or inter-connected firms within and across industries (that compete but also co-operate) and involve a number of entities such as producers, specialized suppliers, service providers, and support institutions.  

The PSDP has just concluded a rigorous island-wide “cluster drive” that encouraged business operators to come together to form clusters, select cluster leaders and develop cluster-development proposals for possible funding under the PSDP.  On September 24, 2007, short-listed cluster groups submitted these final applications to the PSDP. 

Once clusters have been selected for support, the first step will be to strengthen these clusters.  Initial efforts will focus on enhancing the administrative capacity of cluster leaders, the Public and Private sector Support Institutions (PSOs) that will manage cluster activities.  Cluster development activities will also focus on upgrading the capacity of the other cluster participants including the suppliers (e.g. farmers, service providers etc.) and processors/manufacturers and service providers in the clusters, so that the entire cluster performance is improved.  Initial funding will therefore be provided for activities such as research & development; product development; joint marketing, training etc. 

Qualified cluster members will be able to access firm level business development grants for their various operations once the cluster has been established.  As such, individual firms will be able to undertake activities to help them improve the performance of their business thereby building the sector from the firm level.

According to Delaine Morgan, Programme Manager of the PSDP, “Clustering has the potential to impact the sustainable development of our Micro & Small business sector at a national level as the economic activity takes place at the firm and industry level.  Therefore, it is anticipated that as the PSDP establish, implement and strengthen clusters through assistance to firms and PSOs, that, there will be a corresponding strengthening of the economy as a whole”. 

The PSDP will continue to work at the macro, policy and research levels to improve the environment in which businesses operate.  In addition, the PSDP’s Corporate Finance Unit will continue to help firms access financing for working capital and other operational needs, as well as provide training and one-on-one consultations in areas such as financial planning & management, business plan analysis and cash flow management.    

The PSDP is a five-year joint initiative of the Government of Jamaica and the European Union (EU), that seeks to provide an integrated, comprehensive and coherent response to challenges faced by the private sector, as well as the opportunities presented as a result of globalization.  The Programme provides a range of technical and financial services to help enhance the environment in which MSMEs operate.  This includes strengthening the institutions and organizations that supports MSMEs as well as enhancing the practices and performance of individual entities so that they can compete more effectively in local and global markets.

For further information on the PSDP, please contact the PSDP now located on the First Floor of the JTI (JAMPRO) building, 18 Trafalgar Road, Kingston 10 at 876-7755 or visit our website www.psdojamaica.com

Photo: “Talking Clusters”
Dr. Andre Gordon, Deputy Leader, PSDP Technical team, (right insert) answers questions from a group of short-listed applicants on the application process for Cluster Development.  Several workshops were held island-wide during the month of September to assist short listed applicants prepare their submission for possible assistance under the PSDP.