Journal of Scientific & Industrial Research
Vol . 60, March 200 I , pp 232-242
A Classificatory Scheme of Technological Innovations in Rural Industries
Pradip Ku mar B i swas
Department of Economics, College o f Vocational Studies, Delhi University.
Tri veni, N ew Delhi, 1 1 0 0 1 7
Sheikh Sarai Phase I I ,
The paper presents a classi ficatory scheme o f technological i n novations i n rural i ndustries. These i ndustries
are heterogeneous and the nature o f i nnovat i ons varies widely such as, i m provement of tools and i mplements or
product design and q uali ty. I t takes place i n the trad i t i onal i ndustries through partial mechan i zation o f the trad i ­
tional crafts a n d i ntroduction of entirely n e w technology baseu on new scient i fi c principles. Whi l e class i fy i n g
i nnovations, t h e proposed scheme uses composi te criteria based on parameters, namely sources of i nnovat ion,
degree of part i c i pation of arti sans, enterprise s i ze, nature of promotional bodi es, characteri stics o f i nnovations
and the e ffects of i n novations. By using this scheme, six categories o f innovat i ons have been i den t i fied namely,
traditional technology with i mprovement of product design and qual i ty (TIDQP), traditional technol ogy with
i mproved tools and i mplements fac i l i tating prod uct i n novations (TI IDQP), part ial mechanization o f trad i tional
crafts (TPM) mechanization fac i l i tating product i nnovat i ons i n tradi t ional craft s (TPM IDQP), capital i n tensive
modern i ndustries that d i splace trad iti onal crafts ((ROMl ) , and newly i ntroduced i ndustries producing e n t i rely
new products (NMI). Rural and semi-urban industries i n Eastern India were surveyed, and the results are analysed
fol lowing the proposed c ri teria.
Introduction
The pace of technological innovation in the ru­
ral industries in a developing economy is gener­
ally very s low, Besides this, the nature of in nova­
tion varies across industry sectors as wel l as across
cl usters within an industry. For some industries/
c lusters this is j ust labor displ acing without any
change in the product mix/quality, and for some
others there have been product innovations along
with partial mechanization . Both the traditional
and modern industries, coexisting in the rural ar­
eas, have wi tnessed i mprovement of technology.
Whi le in the former, there are instances of the de­
velopment of both the hardware and the software,
in the latter, development of new products based
on new techniques is found. Often , innovations
are associated w ith changes in factor productiv­
i 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 p l ayed varied roles. Given this di verse na­
ture of i n novations in the rural industries, it would
be inappropriate to c l ub them into a single cat­
egory as l abor augmenting or capital augmenting
technical progress. The paper attempts to fi nd ou t
a classificatory scheme of innovations that take
place in the rural industries. Th is exercise is based
on field data col lected from some c l usters in rural
West Bengal located in the Eastern Region of In­
dia.
This paper is di vided into th ree sections. The
first Section makes a brief review of the relevant
l iterature, Section 2 suggests alternative criteria
for c l assifying innovations. For this, suitable in­
dicators are identified. Section 3 relates the above
c l asses to the field observation s .
Review of Literature
In the conventional l iterature, techn ical inno­
vation impl ies development of new (or i mproved)
product or of new (or i mproved) method of pro­
duction. The former is termed as product innova­
tion and the l atter process i n novation 1 . The intro­
duction of cost reduc ing process is sometimes
accompanied by a change in the product quality/
product-m i x , whi le new product frequently re­
quires new techn ique. Kuznets2 has pointed out,
whether an innovation concerns a product or a
;
-
B ISWAS : TECHNOLOGY IN NOVATIONS IN RURAL INDUSTRIES
process depends very much upon whose perspec­
tive one is adopting. The process innovations gen­
erally invol ve new mac hinery or equipment i n
w h i c h they are embodied. T h i s mac h i ne ry o r
equipment constitutes a product innovation from
the poin t of view of firm that produces it. The as­
sumptions behi nd these distinctions are that prod­
uct innovations are associ ated with changes in
market demand and process i nnovation s lead to
cost competitiveness. Schumpeter" however, em­
phasizes clustering of major innovations in tech­
n iques that l ead to product innovations without
any consideration to costs . Innovated products
sweep away o l d i n dustries man u facturing o l d
products.
Rosenberg ' , focuses on the technological inter­
dependence i n which a maj or innovation is fol ­
lowed by many minor innovations, often invisible
i n nature, and the ful l benefit of the major innova­
tion fol lows these l atter i nnovations. These inno­
vations are termed by Usher' , as secondary and
tertiary innovations (p. 54) . UsherS, considers in­
novations from the perspective of innovators, par­
ticul arly formation of their ski l l s and insight and
nove l ty in thought and action. Hippe l 's6 approach
to c l assifying innovations is also based on the
sources of i nnovations. He observes that beside
manufacturers, there are several other sources of
innovations, such as users and suppl iers. Depend­
ing on the nature of technology, innovations are
ach ieved at various level s by manufacturers, dis­
tributors, and users. The concepts of i nnovations
resulting from " learn ing by doing" and "learning
by using", developed by H ippel6 and Rosenberg ' ,
respectively, may also be cl assified as innovations
by users.
In the mainstream economics l iterature, inno­
vations are considered to be associ ated with tech­
nical progress. I n macro analysis, innovations are
c l assified accord i n g to the n ature of techn ical
progress, particularly in terms of specific factor
augmenting biases , such as labor augmen ting,
capital , augmenting and neutral . For the first cat­
egory of innovations, productivity of labor in­
creases rel at i ve to that of capital whereas in the
second category, productivity of capital increases
relative to that of l abor. The third category of in­
novations, causes neutral progress in which pro-
ductivity of both the factors increases at the same
rate. According to H icks?, i nventions were gener­
ally directed towards reduced utilization of a scarce
factor which was becoming rel atively expensive.
High growth of capital rel ative to l abor i n the de­
veloped countries led to a l abor saving technical
progress. H icksian view of l abor saving bias has
been sharpl y criticized by S al ter8 on the ground
that the producers woul d encourage cost reduc­
tion without any consideration as to the invention
possi b i lities having any factor saving bias. The
problem with the Hicksian vIew would be more
severe i f we look i nto the rural i ndustries of West
Bengal where capital inten s i ve techniques were
adopted i n some industries, in spite of l abor bei ng
abundan t . Moreover, the n at ur e of tec h n ical
progress is different in differen t industries/c l us­
ters - in some cases capital augmenting and in
some others l abor augmenting.
The above discussion high lights that innova­
tions can be c lassified i n various ways depending
on the perspecti ve one adopts. Such perspecti ves
vary, depending upon the sources of in novations,
the process of conceptual izing innovations, effect
of innovations, etc . However, i ndi vidual authors
have general ly focussed on a particular aspect of
i n novations. No attempt has been made to cap­
t ure m u l t iple features of i n novations together,
while c l assifying them. A more general approach
towards c l assifying i n novations by using mul tiple
criteria is therefore required in order to compre­
hend the diverse nature of innovations. Further,
i n the l iterature, i n adequate attention is paid to
information, fi nance and the role of state. These
are important in the context of i nnovations in low
technology rural industries. The above l iterature
deals with innovations in h igh technology indus­
tries, however, i t has some relevance to the rural
i ndustries. The present paper tries to formul ate
i ndicators for c l assifying innovations in low tech­
nology rural industries by using a composite cri­
teri a.
Classification of Innovations in Rural Indus­
tries
We have used while formulati n g i ndicators for
classification of i n novations, the fol lowi ng crite­
ria: (i) Sour, . \ !Jf i nnovations which include in-
234
J SCI IND RES VOL 60 M ARCH 200 1
formation and knowledge of science and technol­
ogy (S&T), ski l l formation for the new technol­
ogy, participation of artisans, local producers, large
enterprises and R&D i nstitutes of the state, the
rol e of market and the state promotional bodies i n
providing information ; ( i i ) Characteristics o f the
i nnovated technology, whether it invol ves prod­
ucts 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 pro­
cess, ( i i i ) Effect of i n novation such as whether it
raises produ c t 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 fea­
tures rel ating i nnovations systematical l y, change
with the level of sophi stication of technology.
As already mentioned, technol ogy level in the
rural i ndustries is low or old and i t is l abor inten­
s i ve. However, there exist substantial vari ations
in technology across i ndustries and clusters i n ru­
ral areas. A slow pace of product and process in­
novations i s taking place i n several i ndustries .
Some new or the so-called modern i ndustries are
also growing i n the rural areas. The l atter type i s
different from its traditional counterpart, especial l y
i n terms of techniques of production ( including
u se of mot i ve force) and appl ication of the prin­
ciples of science. By new we imply those indus­
tries in which products or processes are new or
entirely new scientific principles are appl ied. In
old industries, an i mportant part of the production
process remains unchanged, i .e . , elements of ex­
i sting equi pment, 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 prin­
ciple is partly applied and new organ i zations of­
ten emerge. The new manufacturing and servic­
ing u n i ts are i n most cases mechanized and some­
times their products are also new. For a large num­
ber of industries, both the traditional and the mod­
ern units produce almost the same products and
compete with each other.
New techn iques and products that have been
locally adopted are mostly of foreign origin and
are based on new scientific principles. Old indus­
tries are purely indigenous. Some i n novations 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 u s i ng simple
machines suppl ied by the capi tal goods sector that
appl ies new knowledge of science. Our c l assifi­
cation of i ndustriesli ndustrial activi ties, accord­
ing to the level of sophistication shou ld also cor­
respond to several characteri stics of i n novations,
namely the conditions for adoption and innova­
tion of variou s techniques, nature of their i n terde­
pendence, productivity assoc iated with them and
uti l i zation of labor and other resources . Table I
displays the technology matri x of the rural i ndus­
tries rel ating to certai n attributes of in novations.
We defi ne six categories of i nnovations. The
first four categories, namely TIDQP (traditional
technology w i th i mprovement of product design
and qual i ty), TIIDQP (traditional technology w i th
improvement of tools, i mplements and product
design and qual ity ) , TPM (partial mechanizati on
of the production process i n trad i tion i n dustries)
and TPMIDQP (partial mechan ization of the pro­
duction process in traditional industries along with
improvement of product design and quality ) are
related to old or traditional industries and the l ast
two, namely ROMI (rel ati vely older varieties of
modern i ndustries) and NMI (newly i ntroduced
modern i ndustries) are related to modern or new
i ndustries.
(i) TIDQP refers to the category of i n nova­
tions which invol ve old principles and old
techn iques but i mprovement of des i gn
and qual i ty (D&Q) of products (that
means product i nnovations). Al though
process is unchanged, improvement of
product quality and design and widening
of product-m i x enables some expansion
of market. Requi red ski l l s for these in­
novations and their adoption are provided
by the artisans through the traditional ap­
prentice system . Initially the state agen­
c i es may provide orientation train i n g to
conceptual izing mod i fications of prod­
ucts. S ince there is no maj or i mprove­
ment either in the process or in the prod­
uct, 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
Technology and
innovations
Traditional techniques
with partial
mechanization,
improved design and
quality of pro ducts
(TPMI DQP)
Relatively
older variety
of modem
industries
(ROMI)
Newly introdl
modem indus
(NM I )
Capital goods
manufacturers and
artisans
Urban entrepreneurs,
local merchants and
market
Process, software and
product
Capital goods
manufacturers
Urban
EntrePreneurs
Process
R&D instit-u
Capital goods
facturers
State agencie!
Apprentice system
Apprentice system
Supplier
Partly old and partly
new
Partly old and partly
new
Relatively old
Traditional
techniques with
improved design
and quality of
products (TIDQP)
Tradi tional techniques
with improved
implements, design and
quality of products
(TI I DQP)
Traditional techniques
with partial
mechanization (TPM)
Artisans
Artisans and R&D
institutes
Capital goods
manufacturers
Sources of
information
State agencies and
traders
State agencies, traders
and market
Urban
Entrepreneurs
I nnovations of
products, process or
software
Sources of
train ing/skill
Principles&
Knowledge of
science
Direct employment
effect
Linkages
Capital intensity
Productivity of
labor
Software and
product
Process, software and
product
Process
State agencies and
apprentice system
Old
State agencies and
apprentice system
Old
I nnovators
Process, softy
product
State agencie!
suppliers
New
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Positive
Positive
Negative
Positive
Negative
Positive
Backward
Very low
Low
Backward
Moderate
Moderate
Nil
Moderate
Moderate
Nil
Moderate
Moderate
Backward
High
High
Backward &
Very high
Very high
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236
J SCI IND RES VOL 60 M ARCH 200 1
(ii) TIIDQP refers to innovations i nvolving
i mprovement of old products, tools and
i mp lements. New software i n vol v i n g
i mproved design leads t o qual ity im­
provement of products. Innovations of
tool s and implements for the traditional
i ndustries have been made in the national
research l aboratories with government
initi ative. Artisans are able to make mi­
nor modifications. After i nitial train i ng
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 i nnovation and its
diffusion is the vast reserve of talents and
skills. Further, the apprentice system de­
velops the skills. Productivity of labor is
l i kely to be moderate.
(iii) TPM relates to partial mechanization i n
traditional i ndustries (that is process i n ­
novation). There is n o improvement of
product. Partly old and partly new knowl­
edge and principles of science are ap­
plied. 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 i nnovations have labor displacing
effect.
(iv) TPMIDQP relates to partial mechaniza­
tion of traditional i ndustries along with
product innovations. As in TMP, here also
partial mechanization enables rapid pro­
cessing of raw materials as wel l as re­
p lacement of manual l abor from the
mechanized segment. Its added feature is
that it enables util ization of scrap mate­
rials and helps value addition . The latter
innovation by the artisans has favorable
employment effect. But this is not likely
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 i nnovations or
i nnovations of machinery that totally re-
place manual l abor. There i s no signifi­
cant change i n the products from what
was produced in the traditional i ndustries.
These are based on new scientific prin­
c iples and the motive force is the electri­
cal power. These are labor displacing and
have no additional forward or backward
l inkages over and above their traditional
counterparts. Turnover i nc reases and
thus, the entrepreneurs can take advan­
tage of scale. Productivity of labor is gen­
erall y high.
(vi) NMI relates to the newly i n troduced
modern industries. These are based on
new scientifi c 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 i n the old products charac­
t e r i ze 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 i n In­
dia and i n 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 B engal have also ex­
perienced the features of innovations mentioned
above. B oth the traditional and the modern seg­
ments experienced a slow process of innovations,
varying across i ndustries as well as within same­
industry but across regions. All the features of
product innovations, process innovations, software
devel opment and partial mechanization can be
observed. Our field i nvestigation was conducted
in selected clusters of rural i ndustries in some dis­
tricts of West Bengal, located i n the Eastern Re­
gion 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 indus­
tries corresponding to different technology catego­
ries. 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-
I-
".
Table 2
Industries
(two digit code)
Traditional
techniques
and D&Q
of products
20-2 1 Food products
22
Beverage and tobacco
products
23 Cotton textiles
24
26
27
Silk textiles
Textile products
Wood and Wood
products
29 Leather and leather
products
30 Plastic, Petroleum and
coal products
31
Chemicals & chemical
products
32 Non-metallic mineral
products
33
Basic metal and alloys
34 Metal products
36 Electrical machinery
3 8 Miscellaneous industries
39 Repair services
2&3 All industries
- Number of surveyed units belonging to different categories of technologies (Two-digit level Industrial Classification)
Traditional
techniques
with improved design
and quality of
products
(TIDQP)
Traditional
techniques with
improved implements, design and
quality of products
(TIIDQP)
Traditional
techniques with
partial
mechanization
(TPM)
Traditional techniques with partial
mechanization,
improved design
and quality of pro
ducts (TPMIDQP)
Relatively older
variety of
modern industries (ROMI)
Newly introduced modern
industries (NMI)
c;:;
t:l:l
en
2
4
5
16
2
2
6
7
9
4
)
3
12
7
4
10
12
2
I
15
9
20
3
3
37
9
11
II
10
5
All industries
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4
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2
4
2
11
6
4
4
4
13
7
1 15
)
2
4
4
4
21
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Table 3 - Matrix of technological innovations and their selected attributes in the rural i ndustries of West Bengal
Attributes of
innovations
Industries
Innovators
Sources of
information
Sources of
training
Iskills
Principlesl
knowledge
of science
Output per
laboreRs)
Value
added per
l abor (Rs)
Capital
per labor
(Rs)
TIDQP
(i)Mixture making (food
product),
(ii)cotton weaving
(muslin cloth),
(iii)silk cloth weaving
(Murshidabad silk),
(iv)Cane products,
(v)Cork products and
wooden furniture
(i)Cotton weaving of
Fulia
(ii)Silk weaving of
B ishnupur
(both cases Jacquard
looms are used).
(iii)Omaments & idols of
coconut shell and mother
pearl
(i)Conch shell products of
Jitpur
(ii)Ivory and sandal wood
works
(iii)bell metal works
(i)Artisans
(ii)Artisans
(iii)Urban
entrepreneurs
(iv)State agency &
artisans
(v)Artisans
(i)Local artisans
(ii)Traders
(iii)Traders
(iv)State agencies
(v)Market
(i)Family
(ii)Family
(iii)Family
(iv)State
agency
(v)Family
(i)Old
(ii)Old
(iii)Old
(iv)Old
(v)Old
(i) 1 21 4S
(ii) 1 1 S20
(iii) 1 6000
(iv)1 9600
(v) 1 1 400
( 1 )7 2 1 0
(ii)6069
(iii)5850
(iv)93S0
(v)7420
(i)6427
(ii)1 566
(iii)3040
(iv)7 1 37
(v)2S86
(i)State agency
&artisans
(ii)State agency and
artisans
(i)State agency,
traders and market
(ii)Same as (I)
TIIDQP
TPM
TPMIDQ
(i)Conch shell ornaments
of Bishnupur
(ii)Coal briquettes
ROMI
Flourmills, paddy husking
mills, oil mills, wood
(iii)Artisans
(iii)Artisans
(i) S tate
agency &
family
(ii)Same as
Direct &
indirect
employment
effect
(i)Small
(ii)Moderate
(iii)Moderate
(iv)Moderate
(v)Moderate
'-
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Z
(i)Old
(ii)Old
(iii)Old
(i)
(i)22936
(ii)20400
(i) 1 0943
(ii)9099
(i)7504
(ii ) 1 0052
(iii)23700
(iii)14207
(iii)8680
(i)Large
(ii)Large
(iii)Moderate
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(iii)Family
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(i) Urban
entrepreneurs
(ii)Urban
entrepreneurs
(iii)Urban
entrepreneurs
(i) Urban
entrepreneurs
(ii)Same as (I)
Urban entrep.
(i)U rban
entrepreneurs .
(ii)Same as (I)
(iii)Same as (I)
(i)Family
(ii)Family
(iii)Family
(i)Part old
(ii)Partly
old
(iii)Partly
old
(i)77056
(ii)28640
(iii)23800
(i)Urban
entrepreneurs and
market
(ii)Urban entrep.
Urban
entrepreneurs
(i)Family
(ii)state
agency
(i)Partly
old
(ii)partly
old
New
'-!-
Suppliers
'v
(ii ) 1 4330
(iii) 1 4400
(i)7 1 60
(ii)7650
(iii)9500
(i)Negative
(ii)Negative
(iii)Moderate
(i)8752
(ii)78 1 93
(i)7886
(ii) 1 93 7 1
(i)6 1 42
(ii)8586
(i)Moderate
(ii)Moderate
6 1 976
1 9 1 23
1 4846
Highly
negative
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B ISWAS : TECHNOLOGY INNOVATIONS I N RURAL INDUSTRIES
cated the important characteristics of the innovated
technologies i n the rural industries of West Ben­
gal, 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, al­
though process is unchanged, product qual ity and
desi g n is i mproved and product-mix is often wid­
ened. S ample u n its belonging to this group pro­
duce 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 quality
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 th ey were not
glazed and attractive. Some artisans received train­
i ng from the Handicraft Board for quality improve­
ment. These artisans then started manufacturing a
wide range of items of exquisite quality. Thus,
subsequent competition among the artisans i nten­
sified 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
Del h i and Calcutta). In those regions the rate of
product i nnovation and its diffusion have been
fairly high. Musl i n cloth and Murshidabad silk are
produced i n Islampur. The former requires super­
fine quality cotton yarn most of which is spun by
using Ambar charkha i n that area. Innovation i n
the Murshidabad silk has been made in dyeing and
pri nt i n g . B oth these s i l k and c otton c l oth of
Islampur are well accepted by market.
(ii)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 i a and B ishnupur.
The weavers of Fulia and B ishnupur have orga­
nized cooperative societies, and recei ved training
from Government organizations for making and
using new designs. Subsequently, the weavers
started developing new designs and i ntroduced
frequent modifications. S imultaneously, design-
23�
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 quality.
One of the i mportant aspects of design develop­
ment i n Fuli a is the customer-producer interac­
tion through which the weaver gets the feed back
and other i nputs to modify or develop a design.
The diversified products attract many more cus­
tomers. Innovations of tools and i mplements for
the traditional i n dustries have been made in the
n ational research laboratories with government
i n i ti ative. I mproved 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 fur­
ther i mprovement[B] of the implements and w ith
the passage of time the artisans gradually devel­
oped the required skil l . The process may be
summed up as ' learni ng by doi ng ' [C] or 'learning
by using' [D] . On Ambar Charkha, S en9, misses
the point that further modi fications of the tech­
nology can be made to raise the effic iency and la­
bor 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 manu­
facture cloth of higher count thus making it com­
petitive vis-a-vi s machine made cloth. Further,
Jacquard looms enable weaving cloth of compli­
cated 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 silk in B i shnupur and cotton cloth in
Fu l i a save time and yarn and m ake the cloth
smoother and its texture more attractive. The
weavers of Fulia are more i n novative in the sense
that they often suitably blend silk and synthetics
with cotton yarn to make the cloth further attrac­
tive. Thus the process innovation is associated with
product innovation. These improved quality imple­
ments are moderately expensive[E], weavers' need
for credit i ncreases further, i n order to purchase
finer variety yarn which is also costly. Improve­
ments in tools and i mplements for the artisans are
J SCI IND RES VOL 60 MARCH 2001
240
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 de­
signs 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 l atter 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 arti­
sans to identify the areas of innovations of prod­
ucts 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 tac i t
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 sys­
tem of occupational specialization ensures to an
extent the property rights to the relevant commu­
nity. The community preserves and propagates the
local knowledge and skil l s through the system of
apprenticeship " .
(iii) TPM
Innovation i n 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 manu­
facturing process. Machines directly displace la-
bor to a significant extent but simultaneously cre­
ate 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 opera­
tions 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 utensils,
ivory and conch shell products, etc. The stitching
machine i mproves the finish of leather goods.
Similarly, the electric furnace improves the qual­
ity of chinaware or porcel ain ware by painting it
properly. The grinder machine makes it easy to
polish the German-silver utensils. The same ma­
chine also enables the artisans to utilize the pre­
cious 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 develop­
ment 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 short­
age of raw materials, a j udicious 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 consump­
tion. Only a few of this variety such as coal bri­
quette, bread or biscuit making and vehicle repair­
ing and services are labor intensive. Their prod-
-
J-
r
BISWAS : TECHNOLOGY INNOVATIONS IN RURAL INDUSTRIES
ucts are also new to the rural economy and thus
they create additional employment. The machine
required, demand much less l abor and space, and
can convert a l arge volume of raw materials into
output w ithi n a short span of time. Turnover in­
creases and thus, the entrepreneurs can take ad­
vantage of scale. It therefore suggests that the re­
placement of l abor by capital i s not necessarily
the result of factor price changes or h igh elasticity
of substitution, as often interpreted in the neoclas­
sical l iterature. This may happen due to other fac­
tors l i ke access to credit.
(vi) NMI
These technologies are character­
ized by new products, new sources of raw mate­
rial or a high degree of qualitative improvement
in the old products. They are mechanized to a con­
siderable extent. They have favorable income and
employment effects. Fruit processing and preserv­
ing units and leaf-plate making units, belonging
to thi s group of modern i ndustries, use local raw
materials but their products are marketed in dis­
tant regions. Since these products are cheap and
of high quality, they are facing unsaturated de­
mand. 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 absorp­
tion is substantially high despite the use of ma­
chines. Foam, plastic and polythene goods have
been recently i ntroduced by firms with high tech­
nology and skilled personnel [J] . Similarly, elec­
trical 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 main­
tained in similar 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 i ke cotton weaving, silk weaving and conch shell
24 1
products show marked variations i n this regard.
In the case of cotton and silk weaving we find clus­
ters using traditional looms with no change in tech­
nology, clusters with TIDQP and some other clus­
ters w ith TIIDQP. The weavers of Nabadwip and
Kodali a c lusters are found to use purely 'tradi­
tional technology' . The weavers in the former pro­
duce 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
i mprovement of old products, has been used in
cotton and silk weaving at Islampur. Main prod­
u c t s of th i s re g i o n are m u s l i n c l oth and
Murshidabad silk. The third type of technology
c o m b i n e s p roduct and process i nn ovations
(TIIDQP). In Fulia and B ishnupur, improved Jac­
quard-type looms have been introduced together
with new products. Main product of Fulia is cot­
ton cloth often blended with silk and synthetic yarn
and that of B i shnupur is B aluchari silk sari. In the
case of conch she l l products, two clusters having
different nature of innovations have been surveyed.
In the Jitpur cluster, there has been partial mecha­
nization with no change in the product - the tra­
d i ti onal r i n gs 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 var­
ied ranging from improvement of design and qual­
ity of traditional products, improvements of tools
and implements of the crafts, partial mechaniza­
tion of the traditional manufacturing units to mod­
ern method of production and entirely new prod­
ucts from new technology. Similarly the class of
innovators varies from local artisans to big urban
entrepreneurs and scientists in the research labo­
ratories. 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 200 1
Between traditional and modern industries, the
participation of the local producers and artisans
in innovations is much more in the former. How­
ever the local entrepreneurs in the traditional in­
dustries adopted machinery and implements in­
novated in the modern manufacturing industries
in the urban areas and these technologies are
treated as process innovations by the local entre­
preneurs. A section of the modern technology di­
rectly 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 w ithin the same industry but across c lus­
ters. Our c lassification of innovations in rural in­
dustries 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 classification is
able to capture several important aspects of inno­
vations in the rural industries and may be used as
a basis for developing a set of quantifiable indicators.
Reference and Notes
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1 982.
2 Kuznet S, Modern Economic Growth (Oxford and IBH
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3 Schumpeter JA, The instability of capitalism ' , Econ 1,
38 ( 1 928) 36 1 -86.
4 Usher AP, Technological change and capital formation,
Th e economics of technical change, edited by N
Rosenberg (Penguin, Harmondsworth) 1 955
5 Usher AP, A history of mechanical inventions (Harvard
University Press, Cambridge, Mass) 1 954.
6 Hippel Eric von, The Sources of Innovation (Oxford
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7 Hicks J, Theory of Wages (Macmillan, London) 1 932.
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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
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1 2 Clair Oswald St, A Key to Ricardo, reprints of econom­
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13 B anerjee P, Sato Y, Skill and technological change: so­
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[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 i nnovations have long term conse­
quences in cost-effectiveness. See Usher ( 1 955) "Tech­
nical 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 exclud­
ing the workshed.
[F] This kind of innovations and the resultant dynamism
in terms of changes in tastes and preferences and cre­
ation of new m arkets have been emphas i zed 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 like 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 machin­
ery in to the trad itional system. He observed that
the substitution of machinery for human labor might
be very injurious to the interests of the class of labor­
ers. 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 in­
dustries 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 ofagriculture, 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.]
f '