I. Introduction

In the present times of ‘globalisation’, we are told that the best Indian industry can do is to export more and more, especially to the West. But what the media forget to add is that a large part of the exports take place through small¹ scale industry and not through the large corporate sector and big business houses that wield decisive influence on policy making and are in the news most of the time. News about the small industry sector and its performance is tucked away in some corner of budget speeches, policy pronouncements and the financial press. One aspect of the small industry which finds its way into the press is the ‘cluster development programme’, regarding which various state agencies, multilateral agencies like UNIDO, and development non-governmental organisations (NGOs) issue pronouncements and reports.

The idea of an industrial cluster is that a large number of small manufacturing units located at one place are together able to produce a final product, while each of them might be involved in only one or a very few steps in a complex chain of production. Thus this kind of production system may be seen as a substitute for a large scale corporate production system. Such clusters can be found today in various parts of Asia, Europe, Latin America and other parts of the world. In India we hear about such clusters manufacturing textiles in Varanasi, Tirupur, Jaipur, etc., as well as locks in Aligarh, brassware in Moradabad, pumps in Rajkot, bicycles in Ludhiana, and so on. The present article attempts to analyse issues regarding cluster development, exports and globalisation in present-day India through a study of the leather and footwear manufacturing cluster (LFC) of Kanpur. We would argue that, though the most important resource of third world clusters in general, including the leather cluster of Kanpur, is their ready access to abundant skilled labour, paradoxically, given the peculiar position of these clusters in the global value chain, their competitive advantage is drawn out not by nurturing this valuable resource but by squeezing it almost to the point of extinction.

Before we get into the details of the LFC a very brief discussion on Kanpur’s industrial and historical background would be in order. Kanpur is a relatively new city, set up by the British in the second half of the eighteenth century due to its strategic location. Post 1857, the city evolved into one of the major centres in India of textile and other industries, including leather. It is appropriate to mention here that the rise of Kanpur during the nineteenth century led to the decline of several towns in North India, including Mirzapur, which had significant pre-industrial formations. Kanpur’s industrialisation occurred largely due to colonial government’s patronage of European enterprise, and most of the produce of the city headed for army consumption – tents and durries, newar and cloth, army boots, engineering products, chemicals, etc. The Indian presence in the commercial scene till the 1920s was largely restricted to the role of intermediaries – bankers (moneylenders), wholesalers and suppliers of raw material. When the transfer of power occurred in 1947, Kanpur was one of the largest industrial towns in the country and was known as the ‘Manchester of the East’. But almost immediately after, Kanpur witnessed rapid industrial decline, and by the 1990s the popular media dubbed it a ‘dead city’, ‘graveyard of industries’, etc. (Chakrabarti, 1995).

Today almost all of the large units in textiles, jute, fertiliser, automobiles, engineering, etc. have shut down, while public sector units in aeronautics and ordnance are also phasing out production, and definitely not adding to their regular employment. Thus in recent years Kanpur has seen massive deindustrialisation and unemployment. The woes of agriculture in Eastern U.P. and Bihar, the catchment area for working class employment for Kanpur, have further aggravated the situation. And yet in spite of all the deindustrialisation in the last two decades, the city’s population has kept growing, and it continues to be the largest city between Delhi in the west and Kolkata in the east. The new growth impetus for Kanpur can be largely attributed to the expansion of small industry, and the city has become an important centre of production of knitwear, plastic packaging, detergent, spices, pan masala, etc., besides leather and leather products. Thus the case of Kanpur provides a striking example for the following argument:

• Large industry, especially in third world contexts, often does not lead to sustainable growth, because much of it comes up due to considerations which originate from outside the local context. And when the context changes these organisations collapse, and take away the gains made over centuries in a very short time.
• Further, the rise of centres of large industry often come at the cost of the decline of existing centres for industry in the neighbourhood (though in the present globalised context it may occur anywhere).
• Both the emergence and decline of large industrial centres may be accompanied by immense misery of the local population, both those directly employed by these large organisations as well as those indirectly dependent on them.

On the other hand small industry clusters have greater scope to emerge as a result of some favourable organic factors (i.e., factors originating from local conditions), and hence can often sustain themselves even if some of the favourable conditions change. To View full report in pdf copy, paste this link in URL  http://workerseducation.net/?attachment_id=175

— by Manali Chakrabarti and Rahul Varman

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