Growth and recession in small-scale industry - A study of Tamil Nadu powerlooms

The powerloom industry has done exceptionally well in India in the long run and especially during an export boom after trade liberalisation in the lat e 1980s. Its growth illustrates several intuitions of recent international literature on small firm dynamics. An export recession in 1996-98, however; showed that the growth had happened without basic changes in the technolog ical and organisational capability of the industry. Using the example of an export-oriented weaving region, the paper describes the origin and present s conditions of the industry, its major handicaps; how it tries to address its handicaps, and what kind of policy initiatives may be needed to. deal w ith them. The,paper also suggests that some recent changes in organisation and technology in the industry can be seen as attempts to deal with these w eaknesses.