Journal of Scientific & Industrial Research Vol . 60, March 200 I , pp 232-242

A Classificatory Scheme of Technological Innovations in Rural Industries

Pradip Kumar B iswas Department of Economics, College of Vocational Studies, Delhi University. Sheikh Sarai Phase I I ,

Tri veni, New Delhi , 1 1 0 0 1 7

The paper presents a classi ficatory scheme o f technological innovations i n rural i ndustries. These i ndustries

are heterogeneous and the nature o f i nnovat ions varies widely such as, improvement of tools and i mplements or

product design and qual i ty. I t takes place i n the trad i t ional i ndustries through part ial mechan i zation of the trad i ­

t ional crafts and i ntroduction of ent irely new technology baseu on new scient i fic principles. Whi le c lass i fy ing

i nnovations, the proposed scheme uses composi te criteria based on parameters, namely sources of i nnovat ion,

degree of part ic ipation of arti sans, enterprise s ize, nature of promotional bodi es, characteri st ics of i nnovations

and the e ffects of innovations. By using this scheme, six categories of innovat ions have been iden t i fied namely,

tradi t ional technology with improvement of product design and qual i ty (TIDQP), tradi t ional technology with

improved tools and i mplements fac i l i tating product innovations (TI IDQP), part ial mechanization of trad i t ional crafts (TPM) mechanizat ion fac i l i tating product i nnovat ions i n tradi t ional craft s (TPM IDQP), capital i n tensive

modern i ndustries that d i splace trad it i onal crafts ((ROMl) , and newly i ntroduced industries producing ent i rely

new products (NMI) . Rural and semi-urban industries in Eastern India were surveyed, and the results are analysed

fol lowing the proposed cri teria.

Introduction

The pace of technological innovation in the ru­ral industries in a developing economy is gener­al ly very s low, Besides this , the nature of innova­tion varies across industry sectors as wel l as across clusters within an industry. For some industries/ c lusters this is j ust labor displacing without any change in the product mix/quali ty, and for some others there have been product innovations along with partial mechanization . Both the traditional and modern industries, coexisting in the rural ar­eas, have wi tnessed improvement of technology. Whi le in the former, there are instances of the de­velopment of both the hardware and the software, in the latter, development of new products based on new techniques is found. Often , innovations are associated with changes in factor productiv­i ty, factor intens i ty and inter- industry l inkages. In the process of these innovations, the producers, artisans, state promotional bodies and the market have played varied roles. Given this di verse na­ture of innovations in the rural industries, it would be inappropriate to c lub them into a single cat­egory as l abor augmenting or capital augmenting

technical progress. The paper attempts to find ou t a classificatory scheme of innovations that take place in the rural industries. Th is exercise is based on fie ld data col lected from some c lusters in rural West Bengal located in the Eastern Region of In­dia.

This paper is divided into three sections. The first Section makes a brief review of the relevant l i terature, Section 2 suggests alternative criter ia for c lassifying innovations . For this, suitable in­dicators are identified. Section 3 relates the above c lasses to the field observations .

Review of Literature

In the conventional l iterature, techn ical inno­vation impl ies development of new (or improved) product or of new (or improved) method of pro­duction. The former is termed as product innova­tion and the l atter process innovation 1 . The intro­duction of cost reduc ing process is sometimes accompanied by a change in the product qual i ty/ product-mix , whi le new product frequently re­quires new techn ique. Kuznets2 has pointed out, whether an innovation concerns a product or a

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BISWAS : TECHNOLOGY INNOVATIONS IN RURAL INDUSTRIES

process depends very much upon whose perspec­t ive one is adopting. The process innovations gen­eral ly involve new machinery or equipment i n wh ich they are embodied. This machinery or equipment constitutes a product innovation from the point of view of firm that produces i t . The as­sumptions behind these distinctions are that prod­uct innovations are associated with changes in market demand and process innovations lead to cost competitiveness. Schumpeter" however, em­phasizes c lustering of major innovations in tech­n iques that l ead to product innovations without any consideration to costs . Innovated products sweep away o ld industries manufacturing o ld products.

Rosenberg ' , focuses on the technological inter­dependence i n which a major innovation is fol ­lowed by many minor innovations, often invisible i n nature, and the ful l benefit of the major innova­tion fol lows these l atter i nnovations. These inno­vations are termed by Usher ' , as secondary and tertiary innovations (p. 54) . UsherS, considers in­novations from the perspective of innovators, par­ticularly formation of their ski l l s and insight and novel ty in thought and action. Hippe l 's6 approach to c lassifying innovations is also based on the sources of innovations. He observes that beside manufacturers, there are several other sources of innovations, such as users and suppl iers . Depend­ing on the nature of technology, innovations are achieved at various level s by manufacturers, dis­tributors, and users. The concepts of innovations resulting from " learn ing by doing" and "learning by using", developed by Hippel6 and Rosenberg ' , respectively, may also be c lassified as innovations by users.

In the mainstream economics l i terature, inno­vations are considered to be associated with tech­nical progress. In macro analysis, innovations are c lassified according to the nature of techn ical progress , particularly in terms of specific factor augment ing biases , such as labor augmenting, capital , augmenting and neutral . For the first cat­egory of innovations, productivity of labor in­creases re lat ive to that of capital whereas in the second category, productivity of capital increases relat ive to that of l abor. The third category of in­novations, causes neutral progress in which pro-

ductivity of both the factors increases at the same rate. According to Hicks?, i nventions were gener­ally directed towards reduced uti l ization of a scarce factor which was becoming relatively expensive. High growth of capital relat ive to l abor in the de­veloped countries led to a l abor saving technical progress. H icksian view of l abor saving bias has been sharply criticized by S al ter8 on the ground that the producers would encourage cost reduc­tion without any consideration as to the invention possib i lities having any factor saving bias. The problem with the Hicksian vIew would be more severe if we look i nto the rural i ndustries of West Bengal where capital intens ive techniques were adopted i n some industries, in spite of l abor bei ng abundan t . Moreover, the n at ure of techn ical progress is different in differen t industries/c lus­ters - in some cases capital augmenting and in some others l abor augmenting.

The above discussion high l ights that innova­tions can be c lassified in various ways depending on the perspecti ve one adopts. Such perspecti ves vary, depending upon the sources of innovations, the process of conceptual izing innovations, effect of innovations, etc . However, i ndividual authors have general ly focussed on a particular aspect of innovations. No attempt has been made to cap­ture mul t iple features of innovations together, whi le c lassifying them. A more general approach towards c lassifying innovations by using mul tiple criteria is therefore required in order to compre­hend the diverse nature of innovations. Further, i n the l i terature, inadequate attention is paid to information, finance and the role of state . These are important in the context of innovations in low technology rural industries . The above l i terature deals with innovations in h igh technology indus­tries, however, i t has some relevance to the rural i ndustries. The present paper tries to formulate indicators for c lassifying innovations in low tech­nology rural industries by using a composite cri­teria.

Classification of Innovations in Rural Indus­

tries We have used while formulating indicators for

classification of innovations, the fol lowing crite­ria: (i) Sour, . \ !Jf innovations which include in-

234 J SCI IND RES VOL 60 M ARCH 200 1

formation and knowledge of science and technol­ogy (S&T), ski l l formation for the new technol­ogy, participation of artisans, local producers, large enterprises and R&D institutes of the state , the role of market and the state promotional bodies i n providing information ; ( i i ) Characteristics of the i nnovated technology, whether it involves prod­ucts or processes or both, or only the software, whether it uses mechan ical power and mechanizes a part of the production process or the entire pro­cess, ( i i i ) Effect of innovation such as whether i t ra ises product i v i ty of l abor or other factors, whether i t has forward or backward l inkages with other sectors and whether i t displaces labor from the industry. It may be seen that the above fea­tures relat ing i nnovations systematical ly, change with the level of sophistication of technology.

As already mentioned, technology level in the rural i ndustries is low or old and i t is labor inten­s ive. However, there exist substantial variat ions in technology across i ndustries and clusters i n ru­ral areas. A slow pace of product and process in­novat ions i s taking place in several i ndustries . Some new or the so-cal led modern industries are also growing in the rural areas. The latter type i s different from its traditional counterpart, especial l y i n terms of techniques of production ( including use of mot ive force) and appl ication of the prin­c iples of science. By new we imply those indus­tries in which products or processes are new or entirely new scientific principles are appl ied. In old industries, an important part of the production process remains unchanged, i .e . , elements of ex­i sting equipment, ski l l s and procedures can be traced in these i ndustries . A major part of their manufacturing process i s based on old principles. However, new knowledge of science or new prin­ciple is partly applied and new organ izations of­ten emerge. The new manufacturing and servic­ing un i ts are i n most cases mechanized and some­times their products are also new. For a large num­ber of industries, both the traditional and the mod­ern units produce almost the same products and compete with each other.

New techn iques and products that have been local ly adopted are mostly of foreign origin and are based on new scientific principles . Old indus­tries are purely indigenous. Some innovat ions i n

techniques and products have occurred, owing to changes in market demand, or because of scarc i ty of raw materials and laborers of speci fic ski l l s . In some cases, old i ndustries have been us ing s imple machines suppl ied by the capi tal goods sector that appl ies new knowledge of science. Our c lassifi­cation of i ndustrieslindustrial act iv i ties, accord­ing to the level of sophist ication shou ld also cor­respond to several characteri stics of innovations, namely the conditions for adoption and innova­tion of various techniques, nature of their interde­pendence, productivity assoc iated with them and uti l i zation of labor and other resources . Table I displays the technology matrix of the rural i ndus­tries rel ating to certain attributes of innovations.

We define s ix categories of i nnovations. The first four categories, namely TIDQP (tradit ional technology wi th i mprovement of product design and qual i ty) , TIIDQP (traditional technology with improvement of tools, implements and product design and qual i ty) , TPM (partial mechanization of the production process i n tradi tion industries) and TPMIDQP (partial mechanization of the pro­duction process in traditional industries along with improvement of product design and quality ) are related to old or tradi tional industries and the l ast two, namely ROMI (relatively older varieties of modern industries) and NMI (newly introduced modern industries) are related to modern or new industries.

( i ) TIDQP refers to the category of innova­tions which involve old principles and old techn iques but improvement of des ign and qual i ty (D&Q) of products ( that means product i nnovat ions) . Al though process is unchanged, improvement of product qual i ty and design and widening of product-mix enables some expansion of market. Required ski l l s for these in­novations and their adoption are provided by the art isans through the traditional ap­prentice system. In i t ia l ly the state agen­c ies may provide orientation train ing to conceptual iz ing modifications of prod­ucts. S ince there is no maj or improve­ment e ither in the process or in the prod­uct, productivity of labor remains at a low leve l .

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Table 1 - Matrix of technological innovations and their selected attributes i n rural industries

Attributes of Traditional Tradi tional techniques Traditional techniques Traditional techniques Technology and techniques with with improved with partial with partial innovations improved design implements, design and mechanization (TPM) mechanization,

and qual i ty of qual i ty of products improved design and products (TIDQP) (TI IDQP) quality of pro ducts

(TPMIDQP)

I nnovators Artisans Artisans and R&D Capital goods Capital goods institutes manufacturers manufacturers and

artisans Sources of State agencies and State agencies, traders Urban Urban entrepreneurs, information traders and market Entrepreneurs local merchants and

market I nnovations of Software and Process, software and Process Process, software and products, process or product product product software Sources of State agencies and State agencies and Apprentice system Apprentice system train ing/ski ll apprentice system apprentice system Principles& Old Old Partly old and partly Partly old and partly Knowledge of new new science Direct employment Positive Positive Negative Positive effect Linkages Backward Backward Nil Nil Capital intensity Very low Moderate Moderate Moderate Productivity of Low Moderate Moderate Moderate labor

Relatively older variety of modem industries (ROMI)

Capital goods man-ufacturers Urban Entre-Preneurs Process

Supplier

Relatively old

Negative

Backward High High

�

Newly introdl modem indus (NM I )

R&D instit-u Capital goods facturers State agencie!

Process, softy product

State agencie! suppliers New

Positive

Backward & t Very high Very high

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236 J SCI IND RES VOL 60 MARCH 200 1

( i i) TIIDQP refers to innovations involving i mprovement of old products, tools and i mplements. New software i nvolv ing i mproved design leads to qual i ty im­provement of products. Innovations of tool s and implements for the traditional i ndustries have been made in the national research l aboratories with government in i tiative. Artisans are able to make mi­nor modifications. After i nitial train ing by the state agencies, artisans develop software and make its modification for product diversification and improvement of the design and quality of products. The primary basis of the innovation and its diffusion is the vast reserve of talents and ski l ls . Further, the apprentice system de­velops the skil ls . Productivity of labor is l ikely to be moderate.

( i i i ) TPM relates to partial mechanization in traditional i ndustries (that is process in ­novation). There is no improvement of product. Partly old and partly new knowl­edge and principles of science are ap­plied. Manual labor is replaced from that segment of the production process which is mechanized. As the machines are easy to handle no additional ski l l is required, and productivity of labor increases. But these innovations have labor displacing effect.

(iv) TPMIDQP relates to partial mechaniza­tion of traditional i ndustries along with product innovations. As in TMP, here also partial mechanization enables rapid pro­cessing of raw materials as wel l as re­p lacement of manual l abor from the mechanized segment. Its added feature is that it enables util ization of scrap mate­rials and helps value addition . The latter innovation by the artisans has favorable employment effect. But this is not l ikely to raise productivity of labor any more, because the new products are often low priced and made of scrap raw material s .

(v) ROMI relates to process innovations or i nnovations of machinery that totally re-

place manual labor. There i s no signifi­cant change in the products from what was produced in the traditional i ndustries. These are based on new scientific prin­c iples and the motive force is the electri­cal power. These are labor displacing and have no additional forward or backward l inkages over and above their traditional counterparts. Turnover i ncreases and thus, the entrepreneurs can take advan­tage of scale. Productivity of labor is gen­erally high.

(vi) NMI relates to the newly i n troduced modern industries. These are based on new scientific principles and electric power is often used as the motive force. New products, using new sources of raw material or a h igh degree of qual itative improvement in the old products charac­ter ize these tech n o l o g i e s . They are mechanized, have favorable income and employment effects . Technologies for these industries are developed both in In­dia and in the developed countries. The productivity of labor is also high.

Categories of Innovations in the Rural Industries of West Bengal: Some Empirical Observations

Rural industries of West Bengal have also ex­perienced the features of innovations mentioned above. Both the traditional and the modern seg­ments experienced a slow process of innovations, varying across i ndustries as well as within same­industry but across regions. All the features of product innovations, process innovations, software development and partial mechanization can be observed. Our field investigation was conducted in selected clusters of rural i ndustries in some dis­tricts of West Bengal, located in the Eastern Re­gion of India. (The survey was conducted in 1 992 and the reference year is 1 99 1 -92). Table 2 shows the two digit classification of the surveyed indus­tries corresponding to different technology catego­ries. It may be noted that some i ndustries appear in more than one group. This is an indication of the variation of technology in the same industry across c lusters. In Table 3, we have briefly indi-

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Table 2 - Number of surveyed units belonging to different categories of technologies (Two-digit level Industrial Classification)

Industries Traditional Traditional Traditional Traditional Traditional techni- Relatively older Newly intro-(two digit code) techniques techniques techniques with techniques with ques with partial variety of duced modern

and D&Q with im- improved imple- partial mechanization, modern indus- industries (NMI) of products proved design ments, design and mechanization improved design tries (ROMI)

and quality of quality of products (TPM) and quality of pro products (TIIDQP) ducts (TPMIDQP) (TIDQP)

20-2 1 Food products I 5 2 22 Beverage and tobacco

products I I

23 Cotton textiles 1 0 5 24 Silk textiles 4 2 26 Textile products 4 2 27 Wood and Wood

products 5 9 4 29 Leather and leather

products 3 30 Plastic, Petroleum and

coal products 2 3 1 Chemicals & chemical

products 32 Non-metallic mineral

products ) 3 ) 33 Basic metal and alloys 2 2 34 Metal products 4 36 Electrical machinery 4 38 Miscellaneous industries 1 2 7 4 39 Repair services I 2 4 2&3 All industries 37 1 5 9 1 0 1 2 1 1 2 1

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All industries

9

1 1 1 6 6 7

20

3

4

6 4 4 4 1 3 7 1 1 5

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Table 3 - Matrix of technological innovations and their selected attributes in the rural industries of West Bengal

Attributes of Industries Innovators Sources of Sources of Principlesl Output per Value innovations information training knowledge laboreRs) added per

Iskills of science labor (Rs)

TIDQP (i)Mixture making (food (i)Artisans (i)Local artisans (i)Family (i)Old (i) 1 21 4S ( 1 )7210 product), (ii)Artisans (ii)Traders (ii)Family (ii)Old (ii) 1 1 S20 (ii)6069 (ii)cotton weaving (iii)Urban (iii)Traders (iii)Family (iii)Old (iii) 1 6000 (iii)5850 (muslin cloth), entrepreneurs (iv)State agencies (iv)State (iv)Old (iv)19600 (iv)93S0 (iii)silk cloth weaving (iv)State agency & (v)Market agency (v)Old (v) 1 1 400 (v)7420 (Murshidabad silk), artisans (v)Family (iv)Cane products, (v)Artisans (v)Cork products and wooden furniture

TIIDQP (i)Cotton weaving of (i)State agency (i)State agency, (i) S tate (i)Old (i)22936 (i) 1 0943 Fulia &artisans traders and market agency & (ii)Old (ii)20400 (ii)9099 (ii)Silk weaving of (ii)State agency and (ii)Same as (I) family (iii)Old B ishnupur artisans (ii)Same as (iii)23700 (iii)14207 (both cases Jacquard (iii)Artisans (i) looms are used). (iii)Artisans (iii)Family (iii)Omaments & idols of coconut shell and mother pearl

TPM (i)Conch shell products of (i) Urban (i)U rban (i)Family (i)Part old (i)77056 Jitpur entrepreneurs entrepreneurs . (ii)Family (ii)Partly (ii)28640 (ii ) 14330 (ii)Ivory and sandal wood (ii)Urban (ii)Same as (I) (iii)Family old (iii)23800 (iii) 1 4400 works entrepreneurs (iii)Same as (I) (iii)Partly (iii)bell metal works (iii)Urban old

entrepreneurs TPMIDQ (i)Conch shell ornaments (i) Urban (i)Urban (i)Family (i)Partly (i)8752 (i)7886

of Bishnupur entrepreneurs entrepreneurs and (ii)state old (ii)78 1 93 (ii) 1 93 7 1 (ii)Coal briquettes (ii)Same as (I) market agency (ii)partly

(ii)Urban entrep. old

ROMI Flourmills, paddy husking Urban entrep. Urban Suppliers New 6 1 976 1 9 1 23

mills, oil mills, wood entrepreneurs

'-!- 'v

Capital per labor (Rs)

(i)6427 (ii)1 566 (iii)3040 (iv)7 1 37 (v)2S86

(i)7504 (ii ) 10052

(iii)8680

(i)7 1 60 (ii)7650 (iii)9500

(i)6 1 42 (ii)8586

1 4846

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Direct & indirect employment effect (i)Small (ii)Moderate (iii)Moderate (iv)Moderate (v)Moderate

(i)Large (ii)Large (iii)Moderate

(i)Negative (ii)Negative (iii)Moderate

(i)Moderate (ii)Moderate

Highly negative

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BISWAS : TECHNOLOGY INNOVATIONS I N RURAL INDUSTRIES 23�

cated the important characteristics of the innovated technologies i n the rural industries of West Ben­gal, according to the classifications made above. Further detailed discussion on each category of i nnovations, as observed in the rural industries of West Bengal, i s made below.

( i)TIDQP - In this category of i ndustries, al­though process is unchanged, product qual ity and design is improved and product-mix is often wid­ened. Sample units belonging to this group pro­duce food-mixture, musli n c loth, Murshidabad silk, cane products, cork products, and wooden furni ture. Artisans' perception of new designs enabled them to improve the design and qual i ty of cork products and furniture. In the case of cane furniture, produced in Alipurduar, the demand was stagnant due to competition from wooden, steel, and aluminum furni ture. Previously, varnishes were not used in cane products and they were not glazed and attractive. Some artisans received train­ing from the Handicraft Board for quali ty improve­ment. These artisans then started manufacturing a wide range of items of exquisite quality. Thus, subsequent competition among the artisans inten­sified product diversification. This business is now thriving and the artisans have captured their lost market and have also penetrated into far-away markets (For example, their products are sold in Delhi and Calcutta). In those regions the rate of product i nnovation and its diffusion have been fairly high. Musl in cloth and Murshidabad silk are produced in Islampur. The former requires super­fine qual ity cotton yarn most of which is spun by using Ambar charkha in that area. Innovation in the Murshidabad silk has been made in dyeing and pri nt ing . B oth these s i lk and cotton c loth of Islampur are well accepted by market.

( i i )TIIDQP- Category three is characterized by improvements of products and processes in the traditional i ndustries, and the samples are taken from weavi ng industries of Ful ia and B ishnupur. The weavers of Fulia and B ishnupur have orga­nized cooperative societies, and received training from Government organizations for making and using new designs. Subsequently, the weavers started developing new designs and introduced frequent modifications. S imultaneously, design-

ers co-operated, particularly i n Ful ia, on their own i ni ti ative. These designers sell a w ide variety of designs to weavers. Local merchants make their own assessment of the market and place orders with the weavers for specific design and qual ity. One of the important aspects of design develop­ment i n Fulia is the customer-producer interac­tion through which the weaver gets the feed back and other inputs to modify or develop a design. The diversified products attract many more cus­tomers. Innovations of tools and i mplements for the traditional industries have been made in the national research laboratories with government i n i ti at ive . Improved spi n n i ng w heel (Am bar Charkha) and improved (Jacquard type)[A] looms and spindles have been distributed to the spinners and weavers on an experimental basis . With fur­ther improvement[B] of the implements and with the passage of time the artisans gradual ly devel­oped the required ski l l . The process may be summed up as ' learni ng by doi ng' [C] or ' learning by using' [D] . On Ambar Charkha, Sen9, misses the point that further modifications of the tech­nology can be made to raise the effic iency and la­bor productivity as d iscussed by Usher) and Rosenberg' . The Ambar Charkha can spin more yarn per unit labor, time and raw material . The finer variety yarn enables the weavers to manu­facture cloth of higher count thus making it com­petitive vis-a-vi s machine made cloth. Further, Jacquard looms enable weaving cloth of compli­cated design. The two innovations in spinning and weaving are complementary or interdependent and this draws our attention towards perfection through cumulative effects. The improved Jacquard looms for weaving si lk in Bishnupur and cotton cloth in Fu l ia save t ime and yarn and make the cloth smoother and its texture more attractive. The weavers of Fulia are more innovative in the sense that they often suitably blend si lk and synthetics with cotton yarn to make the cloth further attrac­tive. Thus the process innovation is associated with product innovation. These improved quality imple­ments are moderately expensive[E], weavers' need for credit i ncreases further, i n order to purchase finer variety yarn which is also costly. Improve­ments in tools and implements for the artisans are

240 J SCI IND RES VOL 60 MARCH 2001

made by the specialized engineers and scientists. One cannot say that these process innovations

are always cost-reducing. Process innovations are often associated with product innovations and therefore the quality of output and inputs changes simultaneously and a dynamism is created in the stagnant industry of Fulia and B ishnupur[F] . These artisans are now seen not only to emulate the de­signs developed in south India but also to suitably mix them with their own varieties. The above mentioned technical progress indicates that the hardware technologies were initially innovated by the state and the artisans gradually adopted them and developed appropriate software. The former is based on the development of the knowledge of mechanical science and the latter is primarily based on the development of tacit knowledge. The two knowledge systems seem to be complementary. Master weavers frequently modify their designs in order to maintain an edge in the market.

Further, training provided by the Government institutions is also found to be helpful for the arti­sans to identify the areas of innovations of prod­ucts for which market prospects exist. The cost of technology adoption is low and accessible to the artisans. The primary basis of an innovation and its diffusion is the vast reserve of talents and skills. The artisans not only preserved their existing skills but also upgraded them through raising tacit knowledgeIO. In the absence of adequate formal education, they acquire the knowledge primarily through imagination and conceptualization of new ideas and then experimentation. These are treated as common goods. However, the customary sys­tem of occupational specialization ensures to an extent the property rights to the relevant commu­nity. The community preserves and propagates the local knowledge and skil ls through the system of apprenticeship" .

(iii) TPM - Innovation in this category includes partial mechanization in the traditional industries. Simple machines such as power driven grinder, electric razor, electric motor, diesel engine and those utilising principles of mechanical lever are used by the artisans in some segments of the manu­facturing process. Machines directly displace la-

bor to a significant extent but simultaneously cre­ate employment opportunity in the down stream of the production process by making available more semi-processed raw materials. For example, in conch shell product manufacturing there are seven separate operations. Each of these opera­tions is done by specialized laborers. The slicing of the conch by hand razor and smoothening of it by rubbing on stone require much time, labor and exertion. Mechanization helps produce more of these semi-processed items which the artisans use for art-works. [G]

(iv) TPMIDQP - Innovations in this group are characterized by partial mechanization along with improvement of product quality and sometimes even product innovations. Examples are: leather products, cup paintings, German-sil ver utensi ls , ivory and conch shell products, etc. The stitching machine improves the finish of leather goods. Similarly, the electric furnace improves the qual­ity of chinaware or porcel ain ware by painting it properly. The grinder machine makes it easy to polish the German-silver utensils. The same ma­chine also enables the artisans to util ize the pre­cious scrap raw materials of conch and ivory in manufacturing new products. While the leading artisans continue to innovate new products from new raw materials, the other artisans imitate them. When mechanization is associated with develop­ment of new products, there is a possibility of market expansion. High costs and limited access of the poor artisans to the organized credit market act as constraints on diffusion of this technology. Since these industries are constrained by the short­age of raw materials, a judicious balance is needed between the degree of mechanization and the growth of input supply and output so as to avoid l abor displacement. [H]

(v) ROMI - Important characteristics of this technology are that the motive force used by the manufacturing units is electric power and they have enough mechanical advantages. These units (listed in Table 3) have displaced the traditional crafts manufacturing products for mass consump­tion. Only a few of this variety such as coal bri­quette, bread or biscuit making and vehicle repair­ing and services are labor intensive. Their prod-

J- r

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BISWAS : TECHNOLOGY INNOVATIONS IN RURAL INDUSTRIES 24 1

ucts are also new to the rural economy and thus they create additional employment. The machine required, demand much less labor and space, and can convert a l arge volume of raw materials into output within a short span of time. Turnover in­creases and thus, the entrepreneurs can take ad­vantage of scale. It therefore suggests that the re­placement of labor by capital i s not necessari ly the result of factor price changes or h igh elasticity of substitution, as often interpreted in the neoclas­sical l iterature. This may happen due to other fac­tors l ike access to credit.

(vi) NMI - These technologies are character­ized by new products, new sources of raw mate­rial or a high degree of qualitative improvement in the old products. They are mechanized to a con­siderable extent. They have favorable income and employment effects. Fruit processing and preserv­ing units and leaf-plate making units, belonging to thi s group of modern industries, use local raw materials but their products are marketed in dis­tant regions. Since these products are cheap and of high qual ity, they are facing unsaturated de­mand. The most striking development has been observed in the case of the units manufacturing hard board, a near substitute of wooden plank. Raw material s used for manufacturing hard board are jute stick, paddy or wheat straw. These are local ly available and are agricultural byproducts. Markets are widely dispersed [I] . The rate of labor absorp­tion is substantially high despite the use of ma­chines. Foam, plastic and polythene goods have been recently introduced by firms with high tech­nology and skil led personnel [J] . Similarly, elec­trical machinery and electronic goods are new to the rural economy. Markets for these articles are expanding with the rising incomes of the rural rich . Some of these goods are also being used by the rural poor. Cold tyre retreading and servicing works use a very new technology which has raised the servicing quality much beyond the level main­tained in s imi lar services based on traditional method.

Variation of Innovations Across Clusters Variation across clusters is an important fea­

ture of innovations in rural industries. Industries l ike cotton weaving, si lk weaving and conch shel l

products show marked variations in this regard. In the case of cotton and si lk weaving we find clus­ters using traditional looms with no change in tech­nology, clusters with TIDQP and some other clus­ters w ith TIIDQP. The weavers of Nabadwip and Kodalia c lusters are found to use purely 'tradi­tional technology' . The weavers in the former pro­duce Janta sari - a coarse variety cotton cloth, and in the l atter produce towel (gamcha) and gauze-bandage from cotton yarn. The second type of technology (TIDQP), which is characterized by improvement of old products, has been used in cotton and si lk weaving at Islampur. Main prod­ucts of th i s reg i o n are m u s l i n c loth and Murshidabad si lk. The third type of technology combines p roduct and process i nn ovations (TIIDQP). In Ful ia and B ishnupur, improved Jac­quard-type looms have been introduced together with new products. Main product of Ful ia is cot­ton cloth often blended with silk and synthetic yarn and that of Bishnupur is Baluchari s i lk sari . In the case of conch shel l products, two clusters having different nature of innovations have been surveyed. In the Jitpur cluster, there has been partial mecha­nization with no change in the product - the tra­di t i onal r ings are sti l l produced (TPM) . In B ishnupur, there has been partial mechanization but the artisans innovated products as wel l . The artisans manufacture ornaments from scrap raw materials (TPMIDQP) .

Summary and Conclusion As the technology in the rural industries is het­

erogeneous, the nature of innovations is also var­ied ranging from improvement of design and qual­ity of traditional products, improvements of tools and implements of the crafts, partial mechaniza­tion of the traditional manufacturing units to mod­ern method of production and entirely new prod­ucts from new technology. Similarly the class of innovators varies from local artisans to big urban entrepreneurs and scientists in the research labo­ratories. Sources of information and finance also vary accordingly. Productivity of labor more or less increases with the level of sophistication of innovated technology. Capital intensity also rises along the same direction .

242 J SCI IND RES VOL 60 MARCH 2001

Between traditional and modern industries, the participation of the local producers and artisans in innovations is much more in the former. How­ever the local entrepreneurs in the traditional in­dustries adopted machinery and implements in­novated in the modern manufacturing industries in the urban areas and these technologies are treated as process innovations by the local entre­preneurs. A section of the modern technology di­rectly competes with the traditional technology and the former has substantial labor displacing effects. Variation in the nature of innovated technologies is found not only between traditional industries but also within the same industry but across c lus­ters. Our c lassification of innovations in rural in­dustries fall s into six classes, four for traditional industries (namely TIDQP, TIIDQP, TPM, and TPMIDQP) and two for the modern industries (namely ROMI and NMI) . This c lassification is able to capture several important aspects of inno­vations in the rural industries and may be used as a basis for developing a set of quantifiable indica-tors .

Reference and Notes

Rosenberg N, Inside the Black Box: Technology and Economics (Cambridge University Press, Cambridge) 1982.

2 Kuznet S, Modern Economic Growth (Oxford and IBH Publishing Company New Delhi) 1 972.

3 Schumpeter JA, The instability of capitalism ' , Econ 1, 38 ( 1 928) 36 1 -86.

4 Usher AP, Technological change and capital formation, The economics of technical change, edited by N Rosenberg (Penguin, Harmondsworth) 1955

5 Usher AP, A history of mechanical inventions (Harvard University Press, Cambridge, Mass) 1954.

6 Hippel Eric von, The Sources of Innovation (Oxford University Press, Oxford) 1 988.

7 Hicks J, Theory of Wages (Macmillan, London) 1 932. 8 Salter WEG, Productivity and Technical Change (Cam­

bridge University Press, Cambridge) 1 969.

9 Sen AK, Choice of techniques: an aspect of the theory of planned economic development (Oxford University Press, Delhi) 1 972.

10 Senker P, The Production of occupational competence: towards a framework of analysis, edited by P B anerjee and Sato Y, op cit, 1 996 29-57.

1 1 B iswas PK & Raj A, Skill Formation in the Indigenous Institutions: Cases from India, edited by P Banerjee and YSato, op cit ( 1 996)73- 1 04, .

1 2 Clair Oswald St, A Key to Ricardo, reprints of econom­ics classics (Augustus M Kelley, Bookseller: New York) 1 965.

13 B anerjee P, Sato Y, Skill and technological change: so­ciety and institutions in International perspective (Har­Anand, New Delhi) 1 996.

[A] A detailed discussion of the mechanical aspects of the Jacquard loom is made by Usher ( 1 954) pp29 1 -293.

[B] Cumulative effects of such small changes in the form of mechanical innovations have long term conse­quences in cost-effectiveness. See Usher ( 1 955) "Tech­nical Change and Capital Formation."

[C] Arrow K, The economic implications of learning by doing, Review of economic studies, June 1 962.

[D] Rosenberg N, Inside the Black Box: Technology and Economics, CUP, ( 1 982) ppI 22- 1 24.

[E] Their installation cost ranges up to Rs 1 3000 exclud­ing the workshed.

[F] This kind of innovations and the resultant dynamism in terms of changes in tastes and preferences and cre­ation of new markets have been emphasized by Schumpeter ( 1942).

[G] In conch shell and ivory works, the scraps, left after processing for bungles or other major items, are used to prepare various items l ike year rings, finger rings, garland, hair clip, etc. Polishing the small pieces of scraps become easy by using grinder machine.

[H] Ricardo was very much concerned with the effect on employment as a result of the introduction of machin­ery in to the traditional system. He observed that the substitution of machinery for human labor might be very injurious to the interests of the class of labor­ers. See Oswald Clair ( 1 965) A Key to Ricardo, Ch. 1 2, ( 1 965)pp 226-246.

[I] Recent attempt of the government to replace wood products provides further boost to the demand for these products.

[J] This industry displaces labor from the traditional in­dustries manufacturingjute and cotton goods like, bags, packaging materials, etc.

About the author

Dr Pradip Kumar Biswas completed his MPhil on West Bengal Agriculture and PhD on Rural Industries in

West Bengalform lawaharlal Nehru University. His areas a/interest have been development of rural economy. particularly that of agriculture, artisanal crafts and modern small scale industries. He has a number ofpubli­

cations in these areas.

[The author wishes to thank the unanimous Referee for his comments on this paper and Dr Manoj Kumar Sanyal and Dr Parthasarathi Banerjee for their suggestions on an earlier draft.]

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