A question of productivity

Over the last few years discussions have been taking place on the directions which the flow of aid from the North to the South should take. These received a further boost from the recent findings of reverse flow leaving the impoverished countries poorer by receiving the aid which, ironically, in the first place was intended to alleviate their poverty. This set the countries constituting the donor community rethinking, and resulted in reorientation in the attitude and direction of the process of aid disbursal.

This resulted in the necessity to look for new paths for the aid to flow. One of the major drawbacks of the earlier path was the creation of continuous dependency by the donee on the donor, since most of the aid was directed towards one form of dole disbursal or the other, leaving no productive role for the donee. Hence the need was felt to emphasise incorporation of the productive sector into the aid process.

NORAD, the aid agency of the Royal Norwegian Government, is one of the first to attempt the above reorientation and set in motion a process which will enable them to consider redirecting the aid flows to enable it to produce more cost effective results. NORAD identified the Rogaland Research Institute based at Stavenger, Norway as the institution to try out a new model in the Indian context, which would provide a new path for the aid flow and at the same time involve the productive sector in the country. This will also enable the upgradation of skills and technologies in India, utilising the advances made in Norway, and would meet the objectives of the growth path of the Indian economy. One of the key features of which is employment generation for the large labour force that is available in the country.

The project entitled "Study in possibilities of Indo-Norwegian collaboration in the technologies for small and medium sectors", aimed at conducting a study in Norway among small and medium enterprises on the types of technology they can identify to be offered to potential Indian counter parts to enhance skills and levels of productivity; and, on the Indian side, to identify small and medium enterprise units that have the potential to absorb and are in need of technology upgradation. The higher productivity resulting from the above could be aimed at the markets within India, in Norway and also for export to other countries.

The first stage was the preparation of a desk study based report of the Indian side relating to policies prevalent at the national and state levels with regard to small and medium enterprises, the policy incentives that are available to this sector of industry, policies relating to technology transfer/ collaboration and marketing potentials. Based on the work experience of the NORAD in New Delhi the four states of Himachal Pradesh, Karnataka, Orissa and Rajasthan were identified for the study.

The combined team from Rogaland Research Institute and Development Alternatives spent three days in the city of Bangalore interacting with representatives of the government, the various chambers of industry, the federation of small scale industries association of the state and also with several small and medium entrepreneurs in the industrial estates surrounding the city. The scientific manpower that is available in the state, the overall climate of utilising high technology, and the emphasis towards environmentally clean industries emerged as the salient features of the state of Karnataka. While the availability of power was certainly cited as the major drawback preventing rapid growth, it was very evident that there is a vast potential for high technology based industry to flourish in this State

The team then split into two units to visit Orissa and Himachal Pradesh. Marine based industry like fishing, processing of sea foods and units manufacturing products useful to marine trade were cited as thrust areas of Orissa, where they would benefit from the Norwegian expertise. Alternate sources of energy and value addition to certain specialised marine activities through the Central Institute of Acquaculture in Bhubaneswar were the other areas that came up as the possible sectors where potential for technology collaboration existed.

The other major area identified to exploit the vast potential of mineral re sources that Orissa possesses was mining. Under a broad category of metal based industries, there was scope for improved foundry technologies, manufacture of metal powders, recycling of metal etc.

The team that travelled to Himachal Pradesh found that, while the entire industrial scenario in the state is still developing, the state lacks a tradition and background that can promote industrial activity. On the whole, as a matter of its primary policy, the state extends wide range of benefits and facilities for all types of industries except those that demand high power, are highly polluting, or are wood-based. The key areas of interest are wool products, finished leather- based products, industries based on herbal and aromatic produce and also hydropower projects per se to tap the enormous hydropower potential in the state through which the state could become a power exporter. Horticulture-based industry mainly in the area of fruits are extremely viable in the state and the main area where technology collaboration / upgradation would be required in is packaging these products since the traditional means are found to be wood-based leading to large scale deforestation.

The final state that was visited in the field study was Rajasthan. Being a state with a large mineral resource base, industrial activity hinges around minerals. Equipment for processing, cutting and polishing stone products and improved cleaner production technology for smelting and finishing metals, are the major input areas in this state. Value addition to agro-products, cattle based industries and technologies for affluent treatment were other areas that could be of interest for technology and skill upgradation.

Technologies based on the vast available solar power will also have tremendous potential in this state. Inland fisheries, an area in which Norwegian technologies are well advanced, was mentioned as another key area of activity since the state has a long background in development of inland fisheries and is a major exporter of fish products to other states in India.

The field trip was rounded up with meetings with government representatives at the national level and the national federation of the small-scale industries association. The key issues that emerge from the study were the recognition of the fact that the small and medium sector industries in India have attained a state of maturity today, from which they would be ideally placed to launch themselves into newer technologies and superior skills resulting in greater productivity. Repeated evidence was found to the large percentage of productive capacity of the industrial sector as a whole being available with the small and medium enterprises and the major share of entrepreneurs were highly skilled technologists themselves resulting in an increased level of capability in them to absorb advanced technologies. If this demand could be met by collaboration with the Norwegian units, the resultant increase in productivity would contribute in a big way to the overall process of development.

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