M.H. Bala Subrahmanya

Development strategies for Indian SMEs: promoting linkages with global transnational corporations

Purpose – The purpose of this paper is to trace the scope and dimensions of global opportunities that emerge in the era of globalization through the rapid growth of transnational corporations (TNCs), which Indian small to medium‐sized enterprises (SMEs) could exploit. The backdrop to the discussion is the growth of small‐scale industries (SSIs) in the era of globalization relative to the pre‐globalization era, with a particular focus on their export performance.Design/methodology/approach – Based on secondary data, the growth of SSIs is analyzed and the scope of global opportunities for Indian SMEs is explored.Findings – Although the growth of the SSIs segment of the SME sector in India has slowed in terms of the number of enterprises, level of people employed and production, SSI export performance has been impressive in the globalization period. The SSI sector has grown more towards the international market than the domestic market in the globalization era. Globalization has offered new markets to SMEs p...

Small-scale industries in India in the globalisation era: performance and prospects

Small-scale industries occupy a place of strategic importance in Indian economy in view of its considerable contribution to employment, production and exports. However, since 1991 small-scale industries in India find themselves in an intensely competitive environment due to globalisation, domestic economic liberalisation and dilution of sector specific protective measures. This paper probes the implications of globalisation and domestic economic liberalisation for small-scale industries and analyses its growth performance in terms of units, employment, output and exports. The paper concludes with policy recommendations to ensure the sustenance and competitive growth of small-scale industries in India.

Development of a measure for technological capability in small firms

Acquisition of technological capability is believed to improve competitiveness of small firms in developing countries. Empirical investigations on the issues pertaining to the acquisition of technological capability have been mainly hindered by the lack of proper measurement methodologies and is an important problem that has not been adequately addressed in the literature. This paper outlines a methodology that uses quantitative measurement, validation and analytical tools for measuring technological capability and provides a useful means for testing the relationships between technological capability and the various technological learning mechanisms.

Technological Innovations in Small Firms in the North-East of England: Dimensions and Implications

In the north-east of England technological innovations by small firms follow a broad pattern in terms of dimensions, causal factors and sources of innovation. Product innovators owe their innovations largely to management motivation and growth ambition. They perceive the need for a particular product in the market and work towards its development in-house. Internal technical capability is decisive. Thus, product innovations emerge due to internal factors. The innovative products are patented and exhibited in national and international exhibitions and advertised in professional journals. As a result, the firms export a considerable share of their output and grow larger. Such firms are ‘offensive’ or ‘proactive’ innovators. They are innovation leaders. Incremental innovators either substitute a raw material to produce an existing product, or change the product shape/dimension/design on their own initiative or in response to their customers. Some upgrade their existing machinery or acquire new machinery for expansion or product diversification. Others introduce existing products due to customer demand or to enable further growth. They are decisive in their incremental innovations. The companies upgrade their technology or skills and change product shape, dimension or design with external support. In-house R&D is largely absent. Thus, incremental innovators emerge due to external factors. These firms are ‘defensive’ or ‘reactive’ innovators. They are innovation followers.

Shifts in India's small industry policy

India was one of the first countries to adopt a clear policy to support small-scale industry 50 years ago, as a means of promoting employment. This article describes the elements of Indias Small Industry Policy with specific reference to protective measures, and reviews its impact on the growth and efficiency of the sector. Indias small industry liberalization is making quiet progress, characterized by a dilution of protective measures on the one hand and a strengthening of development measures on the other, aimed at boosting the efficiency and competitiveness of small industry to the international level.

Industrial subcontracting and structure in Japan: evolution and recent trends

Purpose – This paper aims to trace the evolution of industrial subcontracting in Japan, over a period of time. Subsequently, the transition in the spread and depth of subcontracting along with relative performance of small and medium enterprises (SMEs) in Japanese industry over a period of time are to be analyzed.Design/methodology/approach – First, a historical over view of the evolution of industrial subcontracting in Japan is discussed based on literature and discussion with experts. Secondly, based on secondary data, the industry‐wise trends of subcontracting and performance of small, medium and large enterprises are analyzed.Findings – Japanese industrial subcontracting and structure evolved over the period, particularly after World War II, represents integration and mutual coordination among small, medium and large enterprises across industries. Along with the growth of multi‐layered subcontracting, labour productivities of SMEs have improved as that of large though value added/value of output has r...

Nature and strategy of product innovations in SMEs: A case study-based comparative perspective of Japan and India

Abstract This paper traces the nature and strategy of product innovations of two SMEs in two different economic environments — one each in Japan and India. While the background of entrepreneurs and internal environment are similar, what distinguishes the two is the external environment. Though external sources of support appear similar outwardly, Indian external sources lack the much needed reputation for the capability of delivering productive assistance for technological innovations in manufacturing enterprises. That is why the Japanese SME could take advantage of its external sources but not the Indian SME. Further, the domestic market has ably supported and absorbed innovated products of the Japanese SME whereas the Indian SME has increasingly targeted its innovated products at the international market.

Process and outcomes of technological innovations in electronics industry SMEs of Bangalore: A case study approach

Summary This paper describes the origin and process of technological innovations leading to the development and introduction of new products in the electronics industry of Bangalore, India. Market expansion, along with enterprise growth with reference to three SMEs, is discussed. This study concisely presents the instrumental role that entrepreneurs play in recognizing market opportunities, building crucial in‐house technological capabilities, supplementing it with appropriate external assistance, and establishing technological innovation processes. This includes process modifications to suit customer requirements and finally deliver innovations to the market. The innovation process is significantly marked by a built‐in mechanism for continuous customer interactions. Consequently, all the three SMEs have achieved successful product innovations, leading to their gradual growth over time—not only in terms of employment and investment, but more importantly in terms of sales turnover. Furthermore, inferences drawn from the cases lead to a proposed three‐stage theoretical construct of the process of SME innovation: starting‐up and stabilizing, building technological credibility, and the opening of new markets. The stages involve fulfilling design standards, pursuing incremental innovations, and ushering radical innovations.

The process of technological innovations in small enterprises: the Indian way

This paper probes how two small foundries in Belgaum, Karnataka State, India, have achieved technological innovations successfully based on their technological capability and customer needs, enabling them to sail through the competitive environment. This study brought out that technically qualified entrepreneurs of both the foundries have carried out technological innovations, mainly due to their self-motivation and self-efforts. Changing product designs, as desired or directed by the customers, cost reduction, quality improvement and import substitution through reverse engineering are the characteristics of these technological innovations. These incremental innovations have enabled the entrepreneurs of the two foundries to enhance competitiveness, grow in the domestic market and penetrate the international market and grow in size over time.

Industry features and energy efficiency in Indian small enterprises

Purpose – How do energy consumption, efficiency and economic performance vary between small enterprises belonging to two different product clusters whose production process and technologies differ?Design/methodology/approach – The objectives are analyzed based on empirical data gathered from a field survey of small enterprises with reference to auto ancillaries in Shimoga and brick‐making enterprises in Malur of Karnataka State in India. Simple averages, correlation and multiple‐regression techniques are used for the analysis.Findings – The study brought out that higher energy intensity results in higher share of energy cost in total variable cost. Energy intensity had a negative relationship with value of output. Energy makes a statistically significant contribution to returns to scale. The classification of small enterprises into two groups based on above average energy intensity and below average energy intensity, and the subsequent regression analysis brought out that energy intensity had a positive i...