A Study of Technological Change in the Small Enterprises of A Developing Nation: Analytical Framework and Empirical Examination

This paper looks at the firm level process of diffusion of new technologies for the small enterprises in a developing economy. In particular, it focuses on the differential characteristics of small enterprises (vis-à-vis larger ones) including their differential access to inputs like finance and information that are necessary for the inevitable technological upgradation of these enterprises in the globalised era. It has two parts. First part develops an analytical framework that enables one to characterize the process of firm level technological change and examines the factors affecting it in the small enterprises of a developing nation. Within the developed analytical framework, second part examines the empirical evidence. Need for the former arises as the existing literature on technological change enables one to study changes in the technology of an enterprise that is either due to internal innovation or through the formal modes of transfer of technology. Both do not apply to a majority of small enterprises in any developing nation such as India. Following an eclectic approach, this paper develops an analytical framework to study the firm level technological change in such small enterprises. This analytical framework is comprehensive both in terms of the coverage of the concept of technology and in taking into account all those factors that can possibly cause