Kochi: Kerala can take a cue from China in tapping investments from its non-resident population, the United Nations Industrial Development Organisation''s (UNIDO) regional director for South Asia, George B Assaf, said.

Dr Assaf, on a visit to the state on an invitation from the city-based Institute for Small Enterprises Development, said that Kerala should adopt innovative strategies to "encourage foreign investment through non-resident Keralites who are doing business outside Kerala."

He was speaking on the opportunities and challenges before the concept and implementation of industrial clusters here on Saturday. "Kerala is one of the least industrialised states in India," he said, but lauded Kerala''s achievements in developing the quality of life.

Unregistered manufacturing contributes about half of the value added to manufacturing in the state whereas the all-India average was 40 per cent, he said. He also noted with concern the rising unemployment, especially among the educated. To meet the situation, he suggested that education should be reoriented to suit the requirements of a market-oriented economy. The state can do this "by realising the very positive role the state can play, through panchayati raj institutions and local government and especially through promotion of SMEs in a cluster-based approach," he said.

At a press meet organised immediately after Dr Assaf''s lecture on Industrial Clusters: Opportunities and Constraints, the secretary to the government of Kerala for investment promotion, PH Kurien, said that the concept of industrial clusters is catching up in the district with several new initiatives in the recent past. Sixteen clusters, one of them a tread rubber enterprise, are in various stages of formation and development, he said.

Industrial clusters of plywood in Perumbavoor and rice mills in Kalady are examples of the way the idea is catching up, he said. Most recently, the District Industries Centre has initiated the formation of a garments cluster for women entrepreneurs. Kurien said that industrial clusters were historical groupings, which had developed under circumstances that were unique to a place. According to him, industrial clusters were entrepreneur-driven initiatives rather than government-driven.

The government could, at best, act as a facilitator in the process of confidence-building, provide expertise and choice of cleaner and better technologies, he said. He said that a sub-committee of the Planning Commission that looked into how the government could help industrial clusters had submitted its report to the Commission recently.

Dr Assaf said that UNIDO understood clusters as a "concentration of micro, mini, small or medium enterprises, also called ''principal firms'', producing similar or nearly products. Typically, these firms are situated in the same geographical area — city or town or village and its surrounding areas."

Therefore, he said, "A cluster has a dual dimension - a product category consisting of a range of products and a geographical identity or place." He also said that clusters were not new phenomena but that they had evolved historically.