Whenever we talk about Cluster Development Approach, Institution Building is one of the important concepts that have to be kept in mind. Hence when working with the SFURTI scheme, it becomes necessary to understand deeply about Institution Building.

What is Institution Building In SFURTI?

Institution building is a process in which a group is formed comprising of people who are capable of making decisions that are profitable for the cluster. Each artisan has their way of working, there are no set-rule, set-norms or proper planning according to which they should work. They have no idea about the marketing, raw material channel or forward-backward linkages and are not capable of calculating the risk that may occur. A Group of leaders constituted through Institution building brings all the artisans on one platform, helps them in focusing on a particular vision and provides them with a solution for overcoming any sort of problem.

Institution building in context with SFURTI is of great importance because this whole process is community-driven. And it is quite clear that according to this scheme community is considered the most important aspect.

Institution building is a time taking process and this is why the scheme provides 3 years for the proper execution of this. After 3 years IA, NA and TA will hand-over the cluster to the SPV. Once the handover process is completed institution building will constantly help in the ongoing planning process. The process of forming an institution is conducted in such a way so that it is capable of handling all the matters related to the CFC and can proceed with the SPV activities.

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Conflict-resolution is also a very important feature of institution building because when all the artisans work as a team and have one focus point, it positively affects the production. Even the Sustainable Development Goal focuses on a decent work environment and economic growth, hence institution building is vital because it works with the aim of betterment of the artisans. Technological innovation is also an important aspect of institution building, in which the artisans are trained for managing and working with new types of machinery. Considering these things in mind, institution building is of great importance because it emphasizes on the economic development of the artisans, their social development and also aims at equal pay for equal work policy.

Components of Institutional Building In SFURTI

Skill Up-gradation: After conducting a diagnostic survey, we can understand what skills the artisans already have. And according to this, the skill up-gradation plans are set and decisions are made on what kind of training they require. Then master trainers are identified within the clusters who help in further proceeding with the SPV. Because every cluster already has many skilled artisans with experience. awards or notoriety in the craft, it is not difficult to identify and train them.

Organization Strengthening: It focuses on strengthening Technical Skills, Intra-Institutional Development and cluster Development. Institution Building also works for strengthening Inter-Institution development as one cluster is dependent on other institutions also.

Procedural Improvement: It also aims at rules, legislation, policies and incentives.

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Catalysts of Institution Building In SFURTI

catalysts of institution building in sfurti

Leadership: The group built through institution-building comprises of people who actually work as a leader of the group. They are the one who helps the clusters in moving forward. So it is very important to find people who have leadership qualities and can work in coordination with others.

Knowledge: Knowledge is a key element for both, members of the artisan clusters and master craftsmen.

Accountability: In institutional capacity, building accountability should be purposeful and transparent because the marketing and other benefits of the clusters directly depend on them.

Engaging Stakeholders: It is important to engage all SPV members of the clusters and any other stakeholders. Because this not only strengthens the cluster but also helps in finding out capacity gaps.

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Advantages of Institution Building

Sharing of Resources: It includes pooled capital, risk sharing, enhanced peer consultation and time management. One artisan might be great with designs while some might be good in marketing, so each artisans’ best skill can be used to cater clusters goal. Usually, a cluster works as one unit and they have to do everything by themself. They have to buy the raw material, they have to design it, even decisions related to selling are made by them only. But through institution building, these roles are shared which eventually helps in increasing the productivity of the clusters.

Economies of Scale: An individual or one small group can not produce more products. So for more supply of products, production had to be on a larger scale. For which institution-building is necessary.

Increased Negotiating Power: As the clusters work as a one-stop centre for potential buyers and traders, their negotiating power increases.

Greater Market Access: Because artisans are working as a group and there are a lot of people dealing with various departments, their accessibility to the market increases.

Combine interests and talents: Various people with knowledge of diverse skills come together and work which helps in achieving the goal of sustainability.


As we have now seen, Institution Building is an important factor for the growth of any cluster. With the successful execution of Institution Building steps by an IA and TA, clusters benefit on growth, marketing and skill levels at once. For additional information on SFURTI and its elements, feel free to take a look at our blog, you can follow us on Facebook and Twitter too.