Cochin, Kerala, India
Small Enterprise Development
On 10-12 December 1997, the Institute of Small Enterprises and Development (USED) in Cochin in collaboration with the Cochin University of Science and Technology (CUSAT), also based in Cochin, organized an International Conference on 'Small Enterprise Development: The international experience and Asian-Pacific imperatives'.By Jan Brouwer
The idea of the conference was conceived by Dr P.M. Mathew (USED) and Prof. M.K. Sukumaran Nair of the Department of Applied Economics at the CUSAT. The organizing committee included Dr K.G. Balakrishnan, Registrar of the CUSAT and Dr K.N.Kabra, Professor of Economics at the Indian Institute of Public Administration, New Delhi. The USED and the CUSAT, the Department of Industries and Commerce, Government of Kerala, and the Royal Netherlands Embassy sponsored the conference. The objective of the conference was to examine the experience of development in small enterprises in the Asia-Pacific region against the background of the changing international scenario. The major thrust areas included (a) the dynamics of small enterprises; (b) strategies for small enterprises development; (c) government and small enterprises development; (d) small enterprises and human resource development; and (e) local economic development and small enterprises.The main discussions revolved around three areas: policy-oriented studies, external relations of small enterprises, and the internal organization of small enterprises. The organizers were keen to explore the indigenous knowledge component in the organisation and functioning of small enterprises, particularly in India.
The conference was attended by economists, socia1 scientists, and financial experts from India, Denmark, and the Netherlands, and development workers from the Southern Indian states. Four papers were of special interest for policy studies for small enterprises . Dr K. Ramesha (National Institute of Bank Management, Pune, India) observed that the unprecedented pace of industrialization in the wake of globalization has been characterized in South-East Asia by a rapid expansion in small and medium enterprises. In these countries, government policies are aimed at labour-oriented and export-driven industrialization. Dr K. Ramesha said that 'the progress in South Asian countries, including India, has been sluggish mainly on account of lack of strategies and policy support'. Dr M.H.Balasubramanya (Dept of Management Studies, Indian Institute of Science, Bangalore) stressed the need to review emerging strategies for small and medium enterprises in the international perspective, focusing on both the current local and on the global environment. To combat the emerging competitive environment, Dr.Balasubramanya emphasizes qualitative performance.
Dr Sujatha (Karnataka State Women's Development Corporation, Bangalore) said that in a country like India, where the reform process is affecting vulnerable sections of society adversely, small enterprise development is a primary instrument towards the economic empowerment of women. Dr Sujatha pleaded for further research into the knowledge based on practical problems and prospects for female entrepreneurship.
The discussions on policy for Small Enterprises intensified during the presentation of Dr De Groot's paper (Development Research Institute, Tilburg University, the Netherlands). He observed that subcontracting based on vertical relations is being taken over by flexible specialization. Dr De Groot concluded that 'increasing mass consumption in low and middle-income countries can lead to a new life for patterns of vertical industrial organization (subcontracting), while more horizontal arrangements (flexible specialization) are mainly found in the segmented consumer markets of the industrialized and Newly Industrialized Countries'. Although the debate remained inconclusive, there was a consensus that research should not start exclusively from one of the two notions.
A few papers dealt with the external relationships of small enterprises. Prof. Pederson (Centre for Development Research, Copenhagen, Denmark) concentrated on the role of wholesalers and trading agents in industrialization. In the process of globalization he foresees an important role for these people in restructuring the small enterprises and their link up with the global economy.
Against the background of the flexible specialization debate, Dr Martin Patrick (Maharaja's College, Cochin, India) argued that the key issue is no longer employment but linkages between micro enterprises and the urban informal sector.
Beside policy-oriented contributions, mainly on the macro and meso levels, there were several papers on the internal organization of small enterprises. Dr Keshab Das (Gujarat Institute of Development Research. Ahmedabad, India) warned that the debate relegated the issue of labour to the background. The vital issue is that competitiveness often derives its strength through engendering a trade-off between profitability and working conditions, almost invariably to the disadvantage of the latter.
The papers of S. Soundarajadjane (M.S. Swaminathan Research Foundation, Madras, India) and of Mr.M.Karthikeyan (PRADAN, Madurai, India) reported experiments with alternative developmental paradigms. Soundararadjane discussed the participatory action mode of the Biovillage project, while Kartikeyan's reported experiment was concerned with primary producers groups which developed into business associations.
These and various other contributions provided fresh insights into the technical and administrative problems faced by small enterprises in the overall changing economic scenario.
It became clear that one of the effects of the globalization and liberalization of the Indian economy is not only empirical, but fundamental: a contrast between modern and indigenous economic concepts. Dr Brouwer (Centre for Advanced Research on Indigenous Knowledge Systems, Mysore, India) presented a case study of Small Enterprises in South India which demonstrated a conflict between modern perceptions and indigenous the small enterprises workplace. In India, the modern and indigenous concepts of money, loan, debt, and project are set on a collision course. He also observed contrasting perceptions of the concepts of 'quality' and 'finished product'. In the modern economy producers and consumers belong to different networks (vertical production), in the indigenous system there is a single network of producers and consumers (horizontal production). The modern survival strategy for small enterprises is based on the concept of the finished product, whereas the indigenous survival strategy is linked to the unfinished product.
These findings added a new dimension to the subcontracting-flexibility and the organization debates. The participants agreed that the indigenous knowledge component needs urgent attention in industry or sector-specific research in a defined cultural region prior to reorganization or adjustments to new scenarios.
The organizers should be complemented for bringing together scholars and development practitioners of diverse disciplinary backgrounds. The various stakeholders may look forward to the conference proceedings which will be published by the ISED, Cochin, in early 1998.
For details contact:
Dr P.M. Mathew
Director ISED
Puthiya Road, Vennala P.O.
Cochin 682 028
India
Tel: +91-484-347884
Fax: +91-434-345163