Author(s) :

Emmanuel Chao1, Nashwat Hamis, Lwako Lubida, Marry Mushi.

Volume/Issue :

Abstract :

SMEs are playing an important role in the national development especially in developing and emerging markets but how they coordinate among themselves is of equal relevance. This study aims at assessing how SMEs clusters are driving the economic sustainability. The specific drivers for economic sustainability which the study investigates are innovation, knowledge spillovers, collaboration, and competitiveness. A mixed methods research design was employed, combining quantitative survey data from 178 SME respondents with qualitative insights from interviews and focus group discussions. The results from analysis indicated that cluster innovation, cluster knowledge spillover, cluster collaboration and cluster competitiveness had a positive impact on economic sustainability. Further, the study has also shown cluster competitiveness as the strongest predictor of sustainability outcomes, followed by innovation, collaboration, and knowledge spillovers. Qualitative findings reinforced these results, illustrating how SMEs benefit from joint initiatives, shared resources, inter-firm learning, and competitive pressures that drive efficiency and long-term viability. The study concludes that SME clusters in Tanzania are powerful drivers of economic sustainability, contributing to productivity growth, inclusive development, and environmental responsibility. The findings emphasize the need for supportive policies and institutional frameworks that strengthen cluster networks, foster innovation, and encourage sustainable practices. This research provides both theoretical and practical contributions, offering a framework for understanding cluster dynamics in developing economies and guiding policymakers, cluster managers, and entrepreneurs toward strategies that align competitiveness with sustainable development.

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