Technology Development in the Indian Textile Industry: Interaction Between Government Policy, Firms and Cooperative Research Associations

This study presents the findings of a study of technology development in the Indian textile industry undertaken by the author as part of a larger international study led by The World Bank. The study methodology included a field survey of 18 firms size, technological dynamism and location; interviews with 4 relevant technology institutions catering to the technology related needs of the textile industry; a questionnaire survey mailed to randomly selected firms to facilitate generalisation of findings as well as a study of relevant published materials. The industry is characterized by a large number of firms, mostly small and technologically backward and some fairly large and technologically dynamic. Compared with countries competing in international markets, productivity levels and growth rates are lower in India. There is also considerable variation in productivity between mills in the country. According to published research, ineffective management, inability to buy the right type of cotton at the right time and price, lower machine utilization, poor working conditions, lack of standardization, ineffective financial management are the main reasons for low productivity. These in turn are influenced by factors that are external as well as internal to the firm; lack of plant modernization, lack of timely availability of spare parts, capacity imbalance between stages of the manufacturing value chain, power shortage, lack of proper maintenance, and worker absenteeism. The survey results indicated that firms in the industry spent very small amounts on R&D and technical training. However, the interviews indicated that firms did carry out some product and process changes. The majority of these technological changes were implemented by the firms themselves without the support of technology institutions (TIs). Though lacking in technological dynamism, textile firms showed evidence of accumulated technical expertise to undertake technical changes in product and process within the boundaries of the existing knowledge base. Wherever external support was required firms took the help of cooperative research associations (TIs) in the country rather than foreign collaborators. Standards/testing, information, problem solving/trouble shooting, and education/training were the most used services by the firms.