The correct answer is: a) Promote specialization and collaboration.
Cluster-based development is a strategy that focuses on the development of specific industries or clusters of industries in a particular geographic area. This strategy is based on the idea that businesses in a cluster can benefit from each other through specialization, collaboration, and knowledge sharing.
Specialization refers to the division of labor within a cluster, where each business focuses on a particular aspect of the production process. This allows businesses to become more efficient and productive. Collaboration refers to the cooperation between businesses in a cluster, where they share information, resources, and expertise. This can lead to new innovations and products. Knowledge sharing refers to the transfer of knowledge and expertise between businesses in a cluster. This can help businesses to improve their products and services.
The Andhra Pradesh government focuses on cluster-based development to promote specialization and collaboration between businesses in the state. This strategy is expected to lead to increased efficiency, productivity, and innovation in the state’s economy.
The other options are incorrect because:
- Option b) is incorrect because cluster-based development does not necessarily attract larger investments. In fact, it can sometimes lead to smaller investments, as businesses in a cluster may be more likely to collaborate with each other rather than with outside businesses.
- Option c) is incorrect because cluster-based development does not necessarily lead to decentralization of industrial growth. In fact, it can sometimes lead to centralization of industrial growth, as businesses in a cluster may be more likely to locate near each other.
- Option d) is incorrect because cluster-based development does not necessarily reduce environmental impact. In fact, it can sometimes lead to increased environmental impact, as businesses in a cluster may be more likely to share resources and infrastructure.