Abstract
It has been well established in literature that small industry clusters (SICs) have an impressive record of innovation and knowledge transmission. This paper explores the possibilities in this regard in third-world clusters through an empirical study of three SICs in India. The paper first examines the essential reasons for the survival and growth of clusters temporally over centuries. Then, it critically assesses the factors that threaten the clusters at present—some of which, it appears, might actually be fatal for these clusters. And finally, the paper concludes that though an enhancement in capacity to innovate and transfuse knowledge would contribute to the sustenance of these clusters, this cannot happen unless decisive intervention occurs to preserve and sustain the fundamental strengths of these clusters.
Similar content being viewed by others
Notes
Decentralised system of production in small industry clusters.
The state of Uttar Pradesh is one of the largest and most populous states in India; situated in North-Central India, east of New Delhi in the vast Indo-Gangetic plains, it has been politically extremely significant during the Mughal period. At present, though, economically, UP is one of the poorer and industrially backward regions in the country.
The field work was done during 2004 in a sequential order primarily by the two authors in several rounds—first at Kanpur, then at Varanasi and finally at Moradabad.
At the time of the field work, the statutory minimum wages of the Central Government for an unskilled worker for an 8-our day were around Rs. 90–100/.
References
Akbar (n.a.) Moradabad Brassware Cluster, IIM Lucknow
Aspects of India’s Economy (2006) Wheat imports–a tool for re-shaping india’s agriculture. No. 42, December. Research Unit of Political Economy, Mumbai
Bair J, Gereffi G (2001) Local clusters in global chains: the causes and consequences of export dynamism in Torron’s blue jeans industry. World Dev 29(11):1885–1903
Benton L (1992) The emergence of industrial districts in Spain: industrial districts and diverging regional responses. In: Pyke F, Sengenberger W (eds) Industrial districts and local economic regeneration. International Institute for Labour Studies, Geneva, pp 48–86
Brusco S (1992) Small firms and the provision of real services. In: Pyke F, Sengenberger W (eds) Industrial districts and local economic regeneration. International Institute for Labour Studies, Geneva, pp 177–196
Das K (2005) Indian industrial clusters. Ashgate, Aldershot
Gereffi G (1994) The organisation of buyer-driven global commodity chains: how US retailers shape overseas production networks. In: Gereffi G, Korzeniewicz M (eds) Commodity chains and global capitalism. Praeger, Wesport CT
Gereffi G (1999) International trade and industrial upgrading in the apparel commodity chain. J Int Econ 48:37–70
Guiliani E (2002) Cluster absorptive capability: an evolutionary approach for industrial clusters in developing countries, Paper presented at the DRUID summer conference, Copenhagen/Elsinore, 6–8 June
Holmstrom M (1998) Bangalore as an industrial district: flexible specialization in a labour surplus economy. In: Cadene P, Holmstrom M (eds) Decentralized production in indian industrial districts, flexible specialization, and employment. Sage, New Delhi, pp 169–229
Humphrey J, Schmitz H (2001) Governance in global value chains. IDS Bull 32:3
Kaplinsky R (2000) Globalisation and unequalisation: what can be learned from value chain analysis? J Dev Stud 37(2):117–145
Kumar A (2002) Job quality and productivity in small and micro enterprises: brassware industry, Moradabad. EDA Rural Systems, Gurgaon
Lazerson MH (1988) Organizational growth of small firms: an outcome of market and hierarchies? Am Sociol Rev 53:330–342
Marshall A (1920) Principles of economics, 8th edn. Macmillan, London Reprinted 1966
Nadvi K, Schmitz H (1998) Industrial clusters in less developed countries: review of experiences and research agenda. In: Cadene P, Holmstrom M (eds) Decentralized production in india industrial districts, flexible specialization, and employment. Sage, New Delhi, pp 139–168
Perrow C (1992) Small-firm networks. In: Nohria N, Eccles G (eds) Networks and organizations. Harvard Business School Press, Boston, pp 445–470
Perrow C (2002) Organizing America: wealth, power, and the origins of corporate capitalism. Princeton University Press, Princeton and Oxford
Piore M, Sabel CF (1984) The second industrial divide. Basic Books, New York
Porter ME (1990) The competitive advantage of nations. Free Press, New York
Powell WW (1998) Trust-based forms of governance. In: Kramer RM, Tyler TR (eds) Trust in organizations: frontiers for theory and research. Sage, California, pp 51–66
Pyke F (1992) Industrial development through small-firm co-operation. International Labour Organization, Geneva
Pyke F, Sengenberger W (1992) Industrial districts and local economic regeneration. International Institute for Labour Studies, Geneva
Rabellotti R (2001) The effect of globalisation on industrial districts in Italy: the case of Brenta. IDS working paper 144, Sussex
Ring PS (1997) Processes facilitating reliance on trust in inter-organizational networks. In: Ebers M (ed) The formation of inter-organizational networks. Oxford University Press, New York, pp 113–145
Schmel F (2000) Structure of production costs in footwear manufacture, UNIDO
Schmitz H (1992) Industrial districts: model and reality in Baden Württemberg, Germany. In: Pyke F, Sengenberger W (eds) Industrial districts and local economic regeneration. International Institute for Labour Studies, Geneva, pp 87–121
Schmitz H (1999) Global competition and local cooperation: success and failure in the Sinos Valley, Brazil. World Dev 27(9):1627–1650
Schmitz H, Knorringa P (2000) Learning from global buyers. J Dev Stud 37(2):177–205
Sengenberger W, Pyke F (1992) Introduction: research and policy issues. In: Pyke F, Sengenberger W (eds) Industrial districts and local economic regeneration. International Institute for Labour Studies, Geneva, pp 3–30
Varman R (2002) Cluster development: comparison of different approaches. Submitted to UNIDO. Focal Point Cluster Development Programme, New Delhi
Varman R and Chakrabarti M (2007) Case studies on industrial clusters: a study of Kanpur leather and footwear, Varanasi Silk Saree and Moradabad Brassware Clusters. IIT Kanpur: Report submitted to DSIR, New Delhi
Acknowledgments
We have gathered enormous debt during the course of fieldwork for the study and it would be impossible to acknowledge every individual here. We would like to record our heartfelt gratitude to the several gifted artisans and craftsmen who generously shared the exhilaration and sorrows of their livelihood to us. Part of the field work was sponsored by the Department of Scientific and Industrial Research, Government of India. We would also like to thank the anonymous reviewers and editors of AI and Society for their critical comments. And finally, all the faults remaining in the paper are solely our responsibilities.
Author information
Authors and Affiliations
Corresponding author
Additional information
R. Varman and M. Chakrabarti have equally contributed to the paper.
Rights and permissions
About this article
Cite this article
Varman, R., Chakrabarti, M. Notes from small industry clusters: making sense of knowledge and barriers to innovation. AI & Soc 26, 393–415 (2011). https://doi.org/10.1007/s00146-011-0319-5
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00146-011-0319-5