Lessons from the Design of Innovation Systems for Rural Industrial Clusters in India

Practical experience with technology implementation of the upgrading of very small village industries in India suggests that innovation failures are not merely a result of the lack of proper interaction between the users and suppliers of technologies under implementation, but also a result of adoption of the primitive conception of competitiveness in their practice of technology development. The approach of promoting the small producers to become individually competitive by using labour intensive, small-scale intermediate technologies is proving to be totally inadequate for the achievement of technological efficiency in a dynamic sense. Guided by a primitive notion of competitiveness, the suppliers of intermediated technologies are thus being led into limiting their technological efforts in the sectors of direct interest to the rural industrial clusters to the transitional objectives of mainly poverty alleviation. Consequently they have not been able to target the small producers of these village industries for the objectives of business growth. This paper posits that under competitive conditions the self-employed small producer has not only to come together for access to resources, but also has to emerge as a multi-sectoral collective of producers, co-operating in production. With the aim to draw lessons that are generic and have policy implications for the development of innovation systems for local economy based rural industrial clusters and value chains, the author analyses in this paper the experience of innovation in technological systems for the sectors of leather, fruits and vegetable processing and agro processing by the People's Science Movement with the help of the Ministry of Science and Technology and other sectoral ministries in India where rural poor were required to pool the resources and capabilities for raising the scale and scope of their collective production organization.