Market at the Margin: A Study of Extra-preneurs in and around Delhi

Abstract

Industrial clusters in and around Delhi have industrial units of various sizes from highly labour intensive tiny units to technologically sophisticated large and medium size units. Most of the tiny and small units are actually spin-off units from other small or large and medium size units. Together they represent an interesting structure of industrial organization. The paper proposes to examine the organizational characteristics of small and tiny spin-off enterprises in Indian industries. Spin-off enterprises are those which have been started by the ex-employees of another enterprise (called here as Mother Enterprise). Entrepreneurs of spin-off enterprises generally observe the business opportunity while working in the Mother Enterprise to leave the present employer in an opportune moment to start their own venture. Spin-off enterprises have special significance for understanding the process of industrialization. Growth of such enterprises is a part of the process of technological innovation and diffusion. Mother enterprises work as the nursery of entrepreneur development, technical manpower, and prevailing industrial culture. Once set up their own business, spin-off entrepreneurs maintain various types of relationship with the Mother Enterprise. Hypothetically such relations could be both competitive and cooperative. As we shall argue, together they create the structure for diffusion of innovation, and, therefore, has important implications on industrial and technology policies of the developing countries. In what follows, in section II we describe the region and industrial units of the study. In section Ill, we present the characteristics of spin-off firm as observed in the study area. Section IV examines the dynamics of spin-off firms. The final section indicates the dividing line between market and organization, and delineates the implications of the findings on innovation and diffusion of technology. It would be interesting to examine what do such relations explain for industrial organizations?