engr GHANSHYAM MALHI ROLL # 09INDUSTRIAL14 MUET JAMSHORO

1. Q1 Explain clearly the technological growth in the developing economies. Also
identify their main constraints in detail.
Ans. Almost all countries across the world aspire to continually improve their economic growth
and development. For developing countries, in particular, to progress toward this goal,
their energy use will need to grow.
Projected increases in population and economic activity, particularly in developing countries, are
expected to lead to an expansion in global energy demand in the coming decades. Associated
with this will be a range of challenges affecting economic development, energy security, society,
poverty alleviation and the environment. The main drivers of energy use in the six partnership
economies are dealt with first.
• Economic growth,
• Labor supply
• Productivity growth
Budget provided to bring up new technologies
• Energy crisis
• High inflation
• Encouraging Research & Development
• Knowledge creation or creating awareness
Country and regional population and labor supply growth rates are determined within GTEM,
based on detailed population dynamics that capture the notion that as countries develop and per
person incomes increase, fertility and mortality rates follow a typical pattern. Estimates of the
dependence of fertility and mortality rates on income and an estimated migratory pattern are used
to project age and gender specific population changes. The average annual GDP growth
projections for the partnership economies for the case where current and announced policies are
assumed to be maintained
Knowledge creation is often associated with formal activities within R&D that is undertaken in a
systematic manner within universities and specialized public and private R&D facilities.
However, these formal means represent only a small proportion of knowledge creation.
Knowledge creation is a much larger and more systemic phenomenon, although formal facilities
account for a large percentage of output. There are two points to be emphasized here.
First, measuring the informal aspect of knowledge creation is immensely difficult, since its
benefits and value cannot always be identified before it is used or sold. These informal aspects
are also hard to benchmark, because a large proportion of them are qualitative in nature, in the
form of managerial or service innovations and improvements in processes.
Second, in developing countries, the informal sector tends to be very large. Developing countries
undertake less than 8% of the formal R&D activities globally, and much of these tend to be
undertaken by public, state-supported organizations such as universities and research institutes. It
is within the domain of R&D expenditures of private enterprise in developing countries, that
TNCs can play an important role, although this varies considerably by country.
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2. Q2 What are the major steps taken by the developed countries to meet the
manufacturing goals?
Ans. Strategies for Sustainable Industrial Development
1. Establish Environmental Goals, Regulations, Incentives, and Standards
2. Make More Effective Use of Economic Instruments
3. Broaden Environmental Assessments
4. Encourage Action by Industry
5. Increase Capacity to Deal with Industrial Hazards
6. Strengthen International Efforts to Help Developing Countries
Resource and environmental considerations must be integrated into the industrial planning and
decision-making processes of government and industry. This will allow a steady reduction in the
energy and resource content of future growth by increasing the efficiency of resource use,
reducing waste, and encouraging resource recovery and recycling.
1. Establish Environmental Goals, Regulations, Incentives, and Standards
In dealing with industrial pollution and resource degradation, it is essential that industry,
government, and the public have clear benchmarks. Where the workforce and financial resources
permit, national governments should establish clear environmental goals and enforce
environmental laws, regulations, incentives, and standards on industrial enterprises. In
formulating such policies, they should give priority to public health problems associated with
industrial pollution and hazardous wastes. And they must improve their environmental statistics
and data base relating to industrial activities.
Regulations to control the impacts of industrial activity across national boundaries and on the
international commons are also needed. Existing or future international conventions dealing with
transfrontier pollution or management of shared natural resources should enshrine certain key
principles:
• the responsibility of every state not to harm the health and environment of other nations,
• liability and compensation for any damage caused by transfrontier pollution, and
• equal right of access to remedial measures by all parties concerned.
2. Make More Effective Use of Economic Instruments
Pollution is a form of waste, and a symptom of inefficiency in industrial production. When
industries recognize pollution as a cost, they are sometimes motivated to make investments in
improved products and processes to increase efficiency and hence to reduce the pollution and
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3. waste they generate, particularly when there are economic incentives to do so, it largely depends
on whether such investments will increase their economic performance.
Enterprises may be encouraged to invest in preventive, restorative, or compensatory measures
with subsidies of various kinds. Indeed, in most industrialized and many developing countries,
subsidies are a common way of encouraging companies to invest in measures needed to prevent
external damage. But in this case, of course, it is the taxpayer who pays, rather than the
consumer of the product. Moreover, if the subsidies are large and paid to industries operating in
an international market, they can lead to trade distortions and should be avoided.
Incentives to reduce pollution can be enhanced by other measures. Energy and water pricing
policies, for example, can push industries to consume less. Product redesign and technological
innovations leading to safer products, more efficient processes, and recycling of raw materials
can also be promoted by a more effective, integrated use of economic incentives and
disincentives, such as investment tax breaks, low-interest loans, depreciation allowances,
pollution or waste charges, and non-compliance fees.
3. Broaden Environmental Assessments
An increasing number of countries require that certain major investments be subject to an
environmental impact assessment. This broader environmental assessment should he applied not
only to products and projects, but also to policies and programmed, especially major
macroeconomic, finance, and sectoral policies that induce significant impacts on the
environment.
4. Encourage Action by Industry
With limited resources at their disposal, small and medium- sized industries often find
themselves unable to afford the changes necessary to meet environmental regulations and
product controls. Small scale businesses such as metal working, machine tools, printing, and
tanning and dying are frequently among the worst offenders of environmental regulations in any
country. New technologies, especially micro-electronics, already allow small industries
inexpensive means to control an entire production process. Energy-saving biological systems
may be well suited to the needs of small and medium sized industries for pollution control or
waste disposal.
Small and medium scale enterprises, constituting the largest segment of industry in most nations,
need information and may in some cases require financial and technical assistance from the
public sector. Management and worker training can help them incorporate cleaner technologies
and environmental planning into work patterns. Governments should encourage cooperative
efforts smaller firms in joint research and development on environmental issues, for example, or
joint use of pollution control or waste treatment facilities.
5. Increase Capacity to Deal with Industrial Hazards
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4. Chemical products have greatly improved health and life expectancies; increased agricultural
production; raised comfort, convenience, and the general quality of life; and expanded economic
opportunities. The chemical industry is also one of the most dynamic sectors in most countries,
including many developing ones. Yet this industry, together with its products, can have a
particularly severe impact on the environment. It has given rise to a host of new problems both of
product and process pollution. It continues to generate an increasingly wider range of products
and wastes whose effects, especially long-term ones, on human health and the environment are
not precisely known. Major accidents have taken place, and the safety record of the industry has
been challenged in recent years.
6. Strengthen International Efforts to Help Developing Countries
Large industrial enterprises, and transnational corporations in particular, have a special
responsibility. They are repositories of scarce technical skills, and they should adopt the highest
safety and health protection standards practicable and assume responsibility for safe plant and
process design and for staff training. The transnational should also institute environmental and
safety audits of their plants measured against standards at other subsidiaries, not just against
those of other local companies, which may have less stringent requirements These audits and
their follow-up should be made available to governments and other interested parties.
Many developing countries need information on the nature of industry-based resource and
environmental problems, on risks associated with certain processes and products, and on
standards and other measures to protect health and ensure environmental sustainability. They
also need trained people to apply such information to local circumstances. International trade
associations and labour unions should develop special environmental training programmes for
developing countries and disseminate information on pollution control, waste minimization, and
emergency preparedness plans through local chapters.
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5. Q 3 Why CIM has wide application in large scale manufacturing than the
SMEs also describe the benefits in detail.
Ans. Although most effort to date in CIM system development has focused upon large
cooperation’s, the general feeling is that in the next decade small and medium size companies
will be the fastest growing segment of the CIM market. This is significant, since it was originally
claimed that only large organizations would benefit from CIM as they have the necessary
resources.
Large enterprises developed their own methods to implement the CIM system. Experience
brought success, but their solutions were not completely applicable to small and medium size
enterprises as cost and availabilities of staff with experience of computerized systems have
mostly been prohibitive.
Benefits of CIM
Computer-integrated manufacturing (CIM) is a system consisting of software covering many
business processes, including integration of automated assignment and reporting of factory floor
operations through machine and material handling equipment sensors and software. CIM covers
enterprise resource planning (ERP) modules in a manufacturing operation, including design,
purchasing, inventory, shop floor control, material requirements planning, customer order
management and cost accounting. Benefits of CIM are given below:
• CIM is incredibly cost-effective:
1. To use CIM, you do not have to invest in any special or proprietary equipment. CIM is
hardware-independent! It runs on any PC with a Windows 2000 (or newer) OS. You do
not have to invest in any special or proprietary equipment. Not only are such
undemanding technical requirements rare, they make the system very affordable.
2. You purchase only those components of the software suite that you need to run your
business. You are not forced to buy a “total package” in order to get the parts you want to
use.
3. You do not need a specific database. CIM will interface with all the major systems on the
market.
4. You can continue to use any peripherals – currency counters, coin sorters, MICR readers,
valuators, etc., – you currently have on hand. CIM connects to all of them. Again, no
need to spend money on new equipment.
5. You get free upgrades! If you purchase a CIM maintenance agreement, any upgrades we
develop for the software are yours at no cost.
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6. 6. There are often discounts available for existing customers who wish to purchase
additional components of the application suite.
• CIM enables you to be extraordinarily productive:
Because CIM is so unusually user-configurable, you can set up the system in the way that’s
easiest and most convenient for you to get work done fast. From optimized keystroke patterns to
preferred search methods, CIM lets you run it however you see fit. CIM also has a simple, non-
distracting interface that keeps you focused on the task at hand. See what’s on the screen at one
glance and keep working!
• CIM lets you count anything:
CIM never says “no” when you want to define an item to process. And never presents you with a
“miscellaneous” category that you can’t define in any detail. Do you have 25 currencies to deal
with? Loan payments? Gift cards? Baseball cards? The system fully defines and handles any
item you want to count.
• CIM makes it much easier to control monetary losses:
Billions are lost to theft and poor handling every year. CIM makes it easy to reduce cash losses.
You can set out-of-balance approval requirements however you wish and monitor performance
by teller, cashier, or cash register to pinpoint if and where losses are occurring, and take
appropriate steps when necessary.
• CIM never requires you to do any programming:
Unlike other systems on the market, CIM can handle full cashiering, any number of currencies or
media, any peripherals, any interfaces, and any level of vault, retail, casino, amusement park or
related services without any programming whatsoever.
• CIM helps you manage your business effectively:
With reports from inventory to delivery tracking and productivity available, CIM enables you to
see all the details of your cash management processes and of your employees’ performance
records on the job. Decision-making becomes infinitely more efficient when all of the data is at
your fingertips!
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7. Q 4 Discuss the role of SMEs in the national economic growth. Also discuss it
in the light of developing & developed countries.
Small business is a term used to refer to any investment that households make in establishing a
venture, to generate sufficient revenue for themselves. The choice of these ventures most of the
time depends on the capability of an entrepreneur in terms of art, craft, skill or talent.
Usually lower and lower-middle classes take such initiatives. Though done on purely economic
terms and for financial means, small businesses become a cause for economic emancipation of
not only the businessman but of many who work for him in return for wages. Other benefits
garnered through such ventures extend even further, to include economic productivity at vendor
level, to create healthy competition, to develop craftsmanship, and to drive innovation.
If we look at the figures of contribution that small businesses have made to giant economies, we
find that America’s gross national product has 39 per cent of its share coming from small and
medium enterprises. China is attaining almost 60 per cent of its GDP growth through small
businesses.
On the flip side, even in countries like Bangladesh, SMEs are contributing 25 per cent to the
country’s total GDP. Small businesses, being the backbone of economic development have
always been the darling of government’s economic policy initiatives. Every successful country
has focused largely on developing its small business sector to eventually emerge as an
industrialised nation.
The primary reason for this emphasis has been the ability of SMEs to create employment.
Government or large scale manufacturers cannot generate jobs to cover the sprawling population
of any given country. Small and medium enterprises always take position at this front. In Japan,
the company Toyota employs fewer employees than its vendors engaged in small businesses.
In order to support small industries, governments usually employ two approaches for their
sustainability. As part of the first approach, governments alter impediments regulating specific
business activity. The objective is to diminish, hold minimal or eliminate barriers to entry or
growth. This is achieved by either doing away with the regulatory system, by restructuring it to
fit to the characteristics of a firm such as its size or capital or by making the regulatory system
efficient across the board by lessening the administrative burden associated with regulations. In
the second approach, governments offer public provision of assistance, also known as support
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8. programme or sometimes termed as an economic development programme. These approaches
are facilitated through institutions dedicated to developing and sustaining small and medium
enterprises. In Pakistan, we have Small and Medium Enterprises Development Authority,
commonly known by its acronym SMEDA, working at federal level while on the regional level,
the Punjab Small Industries Corporation PSIC is working to facilitate small businesses in the
province. According to the Economic Survey of Pakistan 2010-11, contribution of SMEs in the
GDP has been calculated at 40 per cent. Interestingly, the GDP growth in totality staggered at 2.5
per cent.
Our human resource is still not equipped to take on the challenges of globalisation. We are
surviving on the margins, where lack of skilled labour, trained entrepreneurs and unavailability
of marketing personnel has trivialised the small and medium businesses issue. For any
improvement to happen on the small and medium business front, we first need to work on human
resource development and on creating marketing linkages abroad. Our emphasis should be on
building entrepreneurial qualities in a businessman, so that he becomes a learned individual,
carrying a sense of documentation and philosophy of economics to market his business.
Punjab Small industry Cooperation was developed in 1972 to assist small business development
across Punjab. Its mandate is to provide infrastructural, technical and financial assistance to
people seeking small business ventures. Until 1990, it had provided fully funded support to small
businesses, with its assistance ranging from land acquisition to the setting up of the entire
business environment. However, in 1990, realising that the Pakistani entrepreneur has achieved
enough financial maturity, where his relationship with the government could be built on equal
financial parity; the government stopped supporting fully financed project schemes. Henceforth,
the role of PSIC was restricted to providing infrastructural, technological and market driven
credit to its consumers. Under this scheme of things, various credit schemes, industrial estates,
Cluster Development Centres, Handicrafts Development Centers (HDC) & handicraft shops have
been developed. In spite of all these economic activities, no real gain could be seen emerging for
the common man. Talking to Dr. Salman Shah, former Finance Minister of Pakistan, about the
reasons for unattainable goals of PICS or SMEDA, he lamented over the situation by saying that,
“The benefit of small businesses could be gauged from the fact that a country like Brazil is
spending $7 per capita on its intermediary institutions looking after the welfare and development
of SMEs. Alternatively, the seriousness of Pakistan’s government about the development of
SMEs could be seen from the fact that it is spending one cent per capita on Small and Medium
Enterprises Development Authority and Punjab Small industrial Cooperation. Under such a
situation, how could we think of developing SMEs? The worrying part is that 99 per cent of our
manufacturing sector consists not only of medium but small industries as well; they are in dire
need of support. They need technological support to improve and enhance production. They
require assistance on the marketing front. They need backing in areas of training and skill
development for their workers and managers. They need easy access to financial markets. They
need administrative support in different areas to deal with petty financial or managerial issues.
And last but not least they need easy access to institutions such as the Punjab Small Industries
Cooperation and SMEDA. If we look at Brazil, they have opened up branches of SME
institutions even in villages, while in Pakistan the representation of SMEDA is found either in
provincial capital or a few other business cities. The same is the case with the Punjab Small
Industries Corporation, which has a representation in only 7 regions of Punjab, without any real
presence at district level. Using another example from Brazil, it is notable to mention that their
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9. SME organisations have inducted 9000 consultants to provide advisory services to small
businesses at their door step. SMEDA and PSIC have miniscule facilities for consultancy at their
disposal. At times, they do call some consultants from abroad, but the output has never been
promising because of paucity of funds. Unless we stretch our resources to the level provides
assistance to our SMEs in areas I have just enumerated, no development worth the salt can be
expected. Resultantly the engine for our economic growth, SMEs, which are also responsible for
generating employment at a larger scale, would remain unproductive and partially disabled.”
SMEs amidst energy crisis. Though government has painted a rosy picture about SMEs, the truth
is that they are nothing more than dead moles on the body of Pakistan’s economy. Sans gas,
electricity and alternative power generation facilities, industries have been shut down in huge
numbers. In this situation, if the government claims to have taken SMEs to a new height, it is
either done on paper or in the dream industry that our leaders often talk about in their Utopian
mood.
Sources:
http://www.pakistantoday.com.pk/2011/07/21/news/profit/troubling-truth-about-smes-in-pakistan/
Our Common Future, Chapter 8: Industry: Producing More With Less
From A/42/427. Our Common Future: Report of the World Commission on Environment and
Development ; http://www.un-documents.net/ocf-08.htm#III.1
http://www.gardeniasoftwaresystems.com/CIM-Benefits.asp
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