Small-scale units in the era of globalisation: Problems and prospects

This paper focuses on the on-going changes in the business environment and the analysis of their implications for the small-scale units. Specifically, we look for the possible ways of improving the competitive strength and commercial viability of small-scale units in the changing context. While liberalisation is exposing these units increasingly to market competition, globalisation is intensifying the market competition. The only way for these units to withstand competition is to improve the productivity and quality, and to reduce the costs given higher qualities. This means substantial improvements in the various dimensions of technology, namely, transformation (mechanisation), organisation and information, which is known to be dependent primarily on the scale of operation. The existing policies on smallscale units created perverse incentives to remain small and operate in an isolated manner. It is high time that policy measures be revamped so as to encourage the growth of small units through collective efforts.