The Analysis of Business Clustering and Inter-firms Linkages in Burayu

In the context of a rapidly globalized world, with the apparent shift towards a knowledge driven economy; the capacity of enterprise and business development to support the processes of learning and innovation, through business clustering, has been identified as a key source of competitive advantages. Despite of this, the absence of business clustering and the resultant weak inter-firms linkages and the weak cooperation with other supportive institutions have undermined the learning and competitive capacity of MSEs in Burayu. MSEs are in a position of weak technology transfer and mastery due to low collective learning; low productivity and inefficient work practices. As a result, they are not in a fertile environment to grow to medium to large scale firms by generating pröts for reinvestment and adopting new production practices.Changing the current situations, therefore, needs developing strong business clustering and linkages that foster entrepreneurial behaviour and innovations through collective learning.