ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Mark HolmstromSubscribe to Mark Holmstrom

Employment in Smaller Indian Firms

How can Indian decision-makers take advantage of liberalisation to achieve economic growth and competitiveness, not as ends but as means to welfare and choice, social and sexual equality, and good work? Most new employment must be in small and medium enterprises, which have achieved some of these things elsewhere. Reviewed here are policies tried in India and elsewhere: protectionism plus privileges for small firms; 'real services' to promote flexible specialisation (Italy, Spain); long-term relationships between large firms and subcontractors (Japan); liberalisation to the limit (Britain, the US); education and training; promoting entrepreneurship, etc. Recent work on industrial districts suggests that Indian variants of flexible specialisation are emerging and can be promoted by suitable policies.

A Cure for Loneliness-Networks, Trust, and Shared Services in Bangalore

'Flexible specialisation' happens when clusters of smaller firms co-operate in production, marketing, and product development. This requires trust, and/or collective provision of 'real services'. Bangalore's smaller engineering and electronic firms work for larger firms, but some develop their own products. Engineers and workers are quality-conscious; innovation is market-led. Entrepreneurs are often too suspicious to co-operate or share information, but there are productive friendships and consortia. Firms benefit from 'real services'. What are the bases and limits of trust? Can 'real services' make up for lack of trust? This study is relevant to other countries with large labour surpluses.

Flexible Specialisation in India

Small firms are fashionable in India; as elsewhere. They have been encouraged and subsidised simply because they are small not because some of them are innovative and hence potential. While there is little scope for Italian-style flexible specialisation in India for the time being, it is a better and more realistic aim than a separate 'small-scale sector' INDIA has had a policy of encouraging 'small-scale industries, and discriminating against large firms. Small firms are supposed to tap reserves of entrepreneurial talent; to make for dispersed ownership, and also for geographical dispersal of industry and population in small towns; to make cheaper goods the masses can afford; and, to reduce social conflict because of close personal relations between employers and workers. Above all, it is claimed that small firms are more labour-intensive, more likely to use appropriate technologies, so they create more employment than large ones. But all these assumptions are doubtful: small firms are not always more labour-intensive than large ones, labour relations are no better and often worse; and so on [see Holmstrom 1984].

Caste and Status in an Indian City

Mark Holmstrom Caste, in traditional India, implied a certain kind of value judgment: power was to be respected only when tt was shown in its proper relation to religious duty. This judgment was clear even when the boundaries and rank of groups were not clear. It was still possible to say: 'Status means caste rank; this is the only thing that confers a moral claim to respect, and any kind of status that is valued must be turned into and called caste'.

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