Abstract
This chapter attempts to understand the key factors that explain the growth of a competitive and dynamic informal industrial sector in the major East Asian countries by looking at the historical developmental context as well as the industrial policy adopted by these countries. The chapter also compares the characteristics of the informal industries in India with that of the East Asian countries to conclude that the contrasting nature of the informal industrial units of these two sets of countries is essentially embedded in the differences in labour market regulation, approaches to financial market liberalization and the overall strategy of industrialization. The concluding observations and reflections stresses upon the crucial role of the state in formulating an industrialization strategy in consonance with the factor abundance of the country, in the absence of which targeted intervention to protect or promote the small scale industrial sector may produce counterproductive results, as we see in the case of India.
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Notes
- 1.
The exact comparable figures for these two countries are difficult to obtain due to non-uniformity of data reported. In India, firms which use electricity and employ 10 or more workers and firms which do not use electricity but employ 20 or more workers are part of the registered manufacturing sector. From the breakup reported in Table, it can be easily understood the firms with 20 or more workers constitutes less than 70% of total manufacturing employment in Korea.
- 2.
Details on the same can be found at the official website of the Development Commissioner (DC) MSME, Government of India. http://www.dcmsme.gov.in/publications/reserveditems/resvex.htm
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Ganguly, S. (2018). The Small Scale Industrial Policy in India and Performance of Unorganised Manufacturing: A Comparative Analysis with East Asian Countries. In: Carvalho, L., Rego, C., Lucas, M., Sánchez-Hernández, M., Noronha, A. (eds) Entrepreneurship and Structural Change in Dynamic Territories. Studies on Entrepreneurship, Structural Change and Industrial Dynamics. Springer, Cham. https://doi.org/10.1007/978-3-319-76400-9_16
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