INDUSTRY-Cannibals and Missionaries

Cannibals and Missionaries Thomas A Timberg MUCH comment on SSE units sees them as forming a critical, but transient portion of the industrial structure of developing countries.1 In the earliest stage, small units prevail. Later they are displaced by larger ones. This has been so both in earlier industrialisation, as of the present industrialised countries, as well as the Newly Industrialised Countries (NICs such as Korea, Taiwan, Singapore, etc). Logically, increasing volumes of production enable scale economics, upward pressure and wages, cause the substitution of more capital intensive techniques, etc. Of course, even in the final stage, some small manufacturing units survive, for craft or luxury goods, or dealing in highly specialised items as well as in the forefront of new industries or industrial trends.2 Jane Jacobs, in some recent articles, has emphasised the role of these sectors in retaining an economy's resiliency.3 To the extent that size transformation does not occur, observers worry that a pathology is present. For example, that markets are so protected that inefficient firms are not subject to competitive pressure. Or that the economy is static and experiencing little growth and transformation. Large scale firms, when they are successful, institutionalise continuous change within themselves