Small enterprises are regarded for their labour intensity and the capability to work with local resources. In the past, this has often led to less emphasis on technology. Run of the mill coupled with functional packaging and inadequate finishing have at times led to small sector products being labelled as being of poor or substandard quality. This has a cascading impact on competitiveness. In the Indian context, a desire to cut initial costs led to hand-me-down machines being purchased. As small enterprises realise the need to link up with large ones, they are having a relook at technology options which would improve productivity, effectiveness and competitiveness. While sourcing technology, small businesses need to concentrate on the following essential issues:-
- Information about technology
- Actual procurement of technology
- Finance for technology upgradation
(i) Information about technology
For small units, information about technology options is often through word of mouth or from a visit to an advanced unit. Few have access to technical literature, professional journals or information about new product launches. In India, much of this is changing. With the advent of internet, new vistas are opening up through electronic journals, catalogue downloads and advanced search facilities. The Technology Bureau for Small Enterprises (TBSE) (www.techsmall.com) promoted with the assistance of the UN offers access to databases and information on technology. In addition, NSIC has taken up an initiative to enhance technology options for SSIs . Technology intervention in clusters offers nearby units an opportunity for a look and feel of advanced technology (see section on 'Clusters'). Entrepreneurs are also assisted to participate in overseas trade fairs to update them with the latest worldwide. Tool Rooms, Testing Centres, Production-cum-Process Centres and Workshops also assist in this task.
(ii) Actual procurement of technology
Even with information, barriers to import of technology, technology transfer issues, vendor capability, after sales support, import procedures impede procurement. In India, the Asia Pacific Centre for Transfer of Technology promotes match making between buyer and seller and facilitates procurement through escort services. Encouragement to import of capital goods has also helped matters.
(iii) Finance for technology upgradation
Small enterprises look to external sources of funding for upgrading technology as withdrawing money from business entails its own costs. In India, a Technology Upgradation and Modernisation Fund and a Hire Purchase Scheme attempts to meet this requirement. These are however, funds at normal lending costs. A new scheme called Credit Linked Capital Subsidy Scheme for Technology Upgradation in small industries has been put into place to reduce the cost of funds.