The Sock City Lesson: What Indian States Can Learn From China’s Clusters

"Buyers from New York to Tokyo want to be able to buy 500,000 pairs of socks all at once, or 300,000 neckties, 100,000 children’s jackets, or 50,000 size 36B bras. Increasingly, the places that best accommodate orders are China’s giant new specialty cities. . . . Each was built to specialize in making just one thing, including some of the most pedestrian of goods: cigarette lighters, badges, neckties, and fasteners. The clusters are one reason China’s shipments of socks to the U.S. have soared from 6 million pairs in 2000 to 670 million pairs last year [2004]."

So why hasn’t India—with its vast entrepreneurial base and demographic edge—replicated this success story through its own Micro, Small, and Medium Enterprises (MSMEs)?