Adoption of Improved Technology in India’s Small-scale Industries: Evidences from a Field Survey

Based on a field investigation of 399 small-scale industries in three Indian states, i.e. West Bengal, Haryana and Maharashtra, collected during April-June 2000, the present paper analyses the pattern of awareness, acquisition and adoption of technological changes in small-scale industries. It also examines possible constraints of non-adoption of improved technologies. The pattern of use of various components of Information Technology (IT) by small entrepreneurs is also discussed. Following a broader definition of technological changes, the paper identifies major causes that are inhibiting the adoption of improved technologies and examines the role of existing policies and programmes in overcoming them; it also analyzes the present procedure for availability of finance to SSI units for upgrading and modernizing their technologies and suggest measures for facilitating such services to small-scale entrepreneurs; further it evaluates the requirements of improvements in skills, education and training both of entrepreneurs and workers among the SSI units to absorb and implement technologies in their diverse manifestations. Ruralurban contrasts are brought out markedly while discussing these issues. The paper finds a better performance by the urban located units in terms of rate of adoption of all types of improved technology. Thus, locational attributes are clearly at work for different types of technological innovation and adoption. It also finds ‘shortage of funds’, inter alia, to be the most crucial factor for non-adoption of improved technology, which clearly implies an inadequacy of institutional support for these industries as a whole and rural units in particular. The paper concludes with many feasible and robust suggestions towards removal of all types of barriers for the adoption of improved technologies, which is vital for the long term growth of the SSI sector.