Abstract
It might be said, that if you don’t know where you are going, then any way will lead you there. Such a statement may indeed be apposite to the ‘strategy’ that has governed the development of India’s machine-tool industry over the past two and a half decades. It is a sector which has been around for a long time in comparison with those of other newly industrialising countries. Yet, in truth, although there have been isolated pockets of technological creativity, there has also, in general, been a trend of remarkable continuity in the country’s dependence on modern ‘soft’ and ‘hard’ machine-tool technology, especially from the West.
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Notes and References
‘[Watt] tried in many ways to fill the gap by stuffing it with anything available — cloth, leather, tallow — all to no avail. If the piston could not be made to fit the cylinder, it could not produce power’. John Wilkinson solved the problem by inventing the first effective machine-tool, ‘a horizontal boring mill with a boring bar supported outside of the work and thus independent of the irregularities of the rough cut cylinder’ (C. R. Hine, Machine Tools and Processes for Engineers New York. McGraw Hill, 1971, p. 2).
Celso Furtado has described the problem in the following succinct fashion: Depressed productivity (in less developed countries) exists because of the relative rigidity of technical coefficients — no possibility of combining factors except in given proportions — and because technology develops along lines determined by the availability of factors and resources of the countries leading the industrialization process. Thus, if it be taken for granted that underdeveloped countries grow by simple assimilation of known techniques (and by the corresponding accumulation of capital), it follows that the transplanting of those techniques almost always implies structural underdevelopment of factors. This problem can only be met through the adaption of technology which is all the more difficult since underdeveloped countries, as a rule, lack a native capital goods industry. In this fundamental maladjustment between factor supply and technological orientation may lie the major problem facing underdeveloped countries at this present time (C. Furtado, Development and Underdevelopment, Berkeley, University of California Press, 1964 pp. 61–2).
See N. Rosenberg, ‘Technological Change in the Machine Tool Industry 1840–1910’, in Perspectives in Technology (Cambridge: Cambridge University Press, 1976) when he argues: ‘whether, for example, the chemical and electronics industries are playing the same roles of information production and transmittal that machine tools played at an earlier stage in our history … For a theory which assumes that most technological change enters the economy “through a particular door”, so to speak, might turn out to much simpler, and therefore more elegant, than one which assumes that technological changes may be initiated, with equal probability, anywhere in the economy’ (p. 31).
R. G. Matthews, The Techno-Economic Development of the Indian Machine Tool Industry With special Emphasis on Aspects Affecting Efficiency. Unpublished doctoral thesis, University of Glasgow, November 1981, p. 31.
S. Okita, The Developing Economies and Japan (Tokyo: University of Tokyo Press, 1980) p. 129.
Chu-Yuan Cheng, The Machine Building Industry in Communist China (Edinburgh: Edinburgh University Press, 1972) p. 231.
Data refers to United Nations Statistics in National Accounts (1976) and table 3.1 in J. Bhagwati and P. Desai, India, Planning for Industrialisation (Paris: OECD, 1972).
W. Hoffman, The Growth of Industrial Economies (Manchester: Manchester University Press, 1958).
J. Bhagwati and P. Desai, India, Planning for Industrialisation, p. 85. It is interesting to note that China appears to have passed through all Hoffman’s stages in a decade. See A. Maizels, Industrial Growth and World Trade (Cambridge: Cambridge University Press, 1963) p. 50.
C. Wilbur, The Soviet Model and Underdeveloped Countries (Chapel Hill: University of N. Carolina Press, 1969) p. 86.
A. Nove, The Soviet Economic System (London: Allen & Unwin, 1977). See pp. 288–95.
‘Backward linkage effect’ indicates that every non-primary economic activity will induce attempts to supply through domestic production the inputs needed in the activity; ‘forward linkage effect’ indicates that every activity that does not by its nature cater exclusively to final demand will induce attempts to utilise its outputs as inputs in some new activities. See A. Hirschman, The Strategy of Economic Development (New Haven: Yale University Press, 1958) chapter 6.
E. Domar, ‘A Soviet Model of Growth’, in Essays in the Theory of Economic Growth, (Oxford: Oxford University Press, 1957).
A. Nove and D. Nuti (eds) Socialist Economics (Harmondsworth: Penguin, 1972) p. 151.
F. Stewart, ‘Capital Goods in Developing Countries’, in A. Cairncross and M. Puri (eds) Employment, Income Distribution and Development Strategy (London: Macmillan 1976) p. 126.
Quoted in Karmien and Schwartz, ‘Potential Rivalry, Monopoly Profits and the Place of Inventive Activity’, Review of Economic Studies, vol. XLV(3), no. 141, October 1978, p. 547. The authors expand on Schum-peter’s argument by adding: ‘An innovation is introduction of a new product or process superseding an existing one. This means a mono-poly’ — and, therefore, monopoly profits required to motivate the entrepreneur to innovate — ‘may be of limited tenure and hence vulnerable. The firm does not identify a particular source of innovative rivalry but instead regards rival innovation as a probabilistic event.’
A major tenet of the development of the Soviet machine-tool industry is that it was geared to producing low-cost machinery appropriate both to creating a mechanised base to the economy in the shortest possible time and to absorbing the abundant labour resources. It was an approach which led Granick ‘to the tentative conclusion that capital-saving is the motivating principle for Soviet Technical Change’. D. Granick, ‘Economic Development and Productivity Analysis: The Case of Soviet Metal-Working’, Quarterly Journal of Economics, vol. 71, 1957, p. 221.
See M. J. Berry, Research, Development and Innovation in the Soviet Machine Tool Industry, unpublished report. Birmingham University, 1976, p. 2.
S. Lall and R. Kumar, ‘Firm-Level Export Performance in an Inwardlooking Economy: The Indian Engineering Industry’, World Development, vol. 9, no. 5, 1981, p. 459.
However, it should be noted that import substitution implemented through protection has probably created in the intermediate goods industries a situation in which the costs of production have been higher than international costs and prices. Obviously, under such conditions the competitiveness of India’s machine-tool exports would deteriorate in direct relation to the increase in the costs of the intermediate goods the tool industry uses as inputs. Efficiency, therefore, would be affected to the extent that the industry has had to use the relatively high-cost domestically produced inputs as opposed to the cheaper input materials which could have been imported. As a case in point: ‘The price of Argentine sulphuric acid is three to four times the price on the international market, because a 100 per cent customs duty is charged on sulphur imports in order to permit a modest amount of domestic production (at high costs)’ (M. van Meerhaeghe, International Economics, London: Longman, 1972, p. 98).
And the more relevant case, that ‘steel accounts for 40–50 per cent of the price of forgings and castings, and in the early 1970s India’s steel was selling at 50–60 per cent above world prices’ (H. Pack, ‘Fostering the Capital Goods Sector in the LDCs’, World Development, vol. 9, no. 3, 1981, fn 20, p. 247).
A. Sutton, Western Technology and Soviet Economic Development 1945–65, vol. III (Stanford: Hoover Institute, 1973) p. 362.
See N. K. Shankar, ‘Tooling up for the Future’, in Swagat, June 1982, p. 20.
S. Lall, ‘The Emergence of Third World Multi-Nationals: Indian Joint Ventures Overseas’, World Development, vol 10, no. 2, 1982, p. 138.
S. Lall and R. Kumar, ‘Firm Level Export-Performance in an Inward-Looking Economy’, 1981, p. 455.
A. Desai, Achievements and Limitations of India’s Technological Capability, NCAER mimeo, New Delhi, April 1982, p. 36.
In this context, note that ‘technological innovation is not a “production” process in the sense that a given combination of inputs leads to a predictable quantity or quality of output. It is basically a cumulative process of learning and experience, of making mistakes and taking risks, which is initially quite costly and perhaps unproductive, but which must be undertaken seriously if LDCs are to build up capacity to do things for themselves’. Quoted from S. Lall, ‘The Patent System and the transfer of Technology to Less Developed Countries’, Journal of World Trade Law, vol. 10, no. 1, Jan–Feb 1976, p. 4.
M. Moritani, Getting the Best for the Least: Japanese Technology (Tokyo: Simul Press. 1982) p. 18.
S. H. Alata, ‘Universality of the Japanese Experience’, in Emerging Asia — The Role of Japan (Tokyo: Professors World Peace Academy of Japan, 1981) p. 67.
J. Bhagwati and T. Srinivasan, Foreign Trade Regimes and Economic Development: India (New York: NBER, 1975) p. 45.
A. Hirschman, ‘The Political Economy of Import Substituting Industrialisation in Latin America, in C. Nisbet (ed.) Latin America — Problems in Economic Development (New York: The Free Press, 1969) p. 240.
This viewpoint may be summarised by the dictum that ‘Brazil could not have exported Volkswagen without having import substituted them first’. Cited in Carlos Diaz Alejandro, ‘Some Characteristics of Recent Export Expansion in Latin America’, in H. Giersch (ed.) The International Division of Labor: Problems and Perspectives (Tubingen: J.C.B. Mohr Fur the Institut für Weltwirtschaft, 1974) p. 221.
Y. Tsurumi, The Japanese Are Corning (Cambridge, Mass: Ballinger, 1976) p. 32.
Looking back over recent years one writer has commented: ‘In communications, electronics and chemicals it was calculated that up to sixty per cent of Japan’s sales were due to the exploitation of foreign R & D, and with firms in other industries the proportion might be up to a quarter. It seemed that, provided some other country was generous enough to take the original risks, it made more commercial sense to buy a licence and concentrate on squeezing the best out of it’ (P. B. Stone, Japan Surges Ahead — Japan’s Economic Rebirth, London, Weidenfield & Nicolson, 1969, p. 138).
See W. Morehouse, ‘Third World Disengagement and Collaboration: A Neglected Transitional Option’, in J. Ramesh and C. Weiss (eds) Mobilising Technology for World Development (New York: Praeger 1979) p. 76.
See A. J. Daukas, ‘Machine Tool Production in the United States and the USSR’, in Dimensions of Soviet Economic Power (Washington DC: Government Printing Office, 1962) pp. 163–80.
‘Innovation has given way to standardisation as competitive tool; product diversity has given way to economies of scale; and external pressure on the industry has replaced entrepreneurial action as the stimulant of technologi-cal change.’ A thought provoking statement from W. Abernathy, The Productivity Dilemma — Roadblock to Innovation in the Automobile Industry (Baltimore, Maryland: Johns Hopkins University Press, 1981) p. 10.
The Japanese authorities have recognised the decreasing possibilities to exploit technology transfer opportunities by devoting a greater proportion of their GNP to basic research. See J. Sigurdson, Technological Change, Economic Security and Technology Policies in Japan (Technology and Culture Occasional Report Series, No 4) May 1982, p. 1. Peering into the future there is a consensus of opinion which believes that Japan and the Pacific Basin countries will come to dominate the international economic community. The philosophy reflects that of Arnold Toynbee, popularised in the 1930s in his Survey of History, who argued that European civilisation would ‘share’ the twentyfirst century with the Pacific civilisation, but thenceforward the Pacific would become ‘paramount’. A similar view was put forward by Oswald Spengler in the 1920s in Decline of the West. Contemporary commentators can also be cited, for instance, the exposition by Norman Macrae of The Economist that the first industrial revolution took place in the UK with the steam engine and Bessemer Steel (1775–1875), the second in the USA with the automobile aircraft and the computer (1875–1975) but that leadership in the third, which has now begun, will be in the Pacific community with electronics. Taken from E. S. Kirby, ‘Japan’s Role in the 1980s’ Economist Intelligence Report, no. 81, 1980.
See R. Kaplinsky, ‘The Time-Bomb in the Computer’, in The Guardian, Friday, 21 May 1982.
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© 1986 Erik Baark and Andrew Jamison
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Matthews, R. (1986). Technological Dynamism in India and Japan: The Case of Machine-Tool Manufacture. In: Baark, E., Jamison, A. (eds) Technological Development in China, India and Japan. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-08117-2_5
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