A study of process of diffusion of innovation in the foundry SME clusters of Ludhiana, Punjab
Student name: Ms Ruchita Sanwal
Guide: Dr Sapna Narula
Year of completion: 2015
Host Organisation: Foundation for MSME Clusters (FMC)
Supervisor (Host Organisation): Ms Sangeeta Agasty
Abstract: This study attempts to assess the process of industrial innovation and its diffusion in the foundry clusters of Ludhiana, Punjab. Innovation has become a very popular category over the twentieth century. A lot of literature on innovation exists but not much has been written about innovation in relation to absorptive capacity. It has been observed that absorptive capacity is the only prominent variable that considerbly explains variation in innovation. The depth of interactions in local innovation systems has a direct consequence on the absorptive capacity which has a far-reaching effect on the diffusion of innovation. This paper attempts to assess the linkage between the existing status of local innovation system and the diffusion of innovation among the foundries. The foundries shall be studied through a cross-cutting analysis through various sectors, assessing their common challenges, scope and opportunities. For the purpose of the study, several key informants from various sectors have been interviewed (Government, Banks, Research Institutes, Foundry Associations, etc) along with user groups (foundry unit owners). The informants have been selected through purposive sampling and the findings are purely qualitative in nature and have used a case-study approach. It has been seen that even with government at the national level implementing pro-SME schemes; implementation process has not been given much emphasis on. There are several existing gaps along the foundry value chain and no proper coordination among the actors which makes the diffusion of innovation a very non-efficient process. The big-ticket borrowers avail the various provisions, leaving the micro and small unit owners at a very destitute stage. One must make sure that the provisions reach the micro units which constitute the largest proportion in the foundries and for them to survive, innovation is essential.
Keywords: Diffusion of innovation, local innovation system, absorptive capacity, foundries, Ludhiana
