Small Scale Metalworking Industries Cluster (Case Study on Towns of Oromia Special Zone)
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Date
2020-09
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Addis Ababa University
Abstract
This paper deals with clustering of small scale metalworking industries in Oromia Special Zone
(OSZ). Clustering is a group of small firms operating in a defined geographic location, producing
similar products, cooperating and competing with one another, learning from each other in order
to overcome internal problems, setting common strategies to overcome external challenges, and
reaching distance market through developed networks. In order to attain benefits of cluster,
industries are identified along with problems facing them by in depth interviews, discussions and
questionnaires. These results are supported by literatures published and unpublished. The paper
also addresses the background of OSZ with respect to industries. The industries are identified by
the selective methodology with their performances based on number of workers, capital and
value additions. Each location of industries is marked by Geographical Positions System and
located the projections on Archi-Geographic Information System software in the world
geographical positions. The industries are evaluated whether the naturally are following or not
with their actual trends. The exact geographical location of a cluster for industries identified is
placed by using gravity location systems on Microsoft Excel solver tool. By methods of model
development for the cluster the model is developed and hence the growth paths of a cluster by
evaluating value chain and stakeholders of industries that had direct or indirect linkages with
industries for continuous growth of cluster. Besides, the internal processes are modeled using
basic processes. With the specified principles of clustering, Ethiopian clusters are evaluated and
argued in relation to infrastructure, technology, skilled manpower, information and e-commerce.
The gap left by cluster- based strategies is filled by policy recommendations. The overall data
and inputs are analyzed in relation to cluster performances are summarized in a meaningful
manner. Trade-offs between clustering and scaling up in fast transferring of technology in
Ethiopia is also discussed. The whole results and findings are tied under summary of the major
findings. Finally, the paper ends with conclusions and suggesting the possible solutions to the
problem for the gaps remained void in the paper.
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Keywords
Industries Cluster, Small Scale, Metalworking