Evidence of Input Sharing and Labour Pooling in an Automobile Cluster of Central India

Abstract

Literature on agglomeration economies firmly establishes the trinity of Input sharing, Labour pooling, and Knowledge spillover, originally conceived by Alfred Marshal, as the foundation of any industrial agglomeration or cluster. Acknowledging the rationale of the trinity, this paper documents the pieces of evidence of Input sharing and Labour pooling in a planned automobile cluster of Pithampur, a backward region of the state of Madhya Pradesh in India. The development of the automobile cluster has transformed Pithampur from a bunch of villages to an automobile hub of central India. Knowledge spillover has been kept out of this study due to the paucity of data. These pieces of evidence are collected through primary and secondary data. It is found from the pieces of evidence of input sharing that both union and state government have played a significant role in developing industry-related infrastructures in Pithampur. The availability of supporting infrastructure, services and various fiscal incentives has helped the firms enjoy economies of scale and attracts potential investors to establish their firms in Pithampur. The evidences of labour pooling capture the dramatic changes in the demography of Pithampur in terms of population growth, sex ratio, occupational shift, migration, etc.