Factor productivity and efficiency in small manufacturing enterprises: An empirical analysis


Article type :

Original Article

Author :

Subhash P.P., N. Karunakaran

Volume :

12

Issue :

4

Abstract :

Technological advancements such as automation, digitalization, improved materials, and modern production techniques can significantly boost the productivity and efficiency of low-technology manufacturing units, particularly small enterprises. The adoption of tools like Information and Communication Technology (ICT), Computer-Aided Design (CAD), and smart manufacturing systems allows these businesses to streamline operations, lower production costs, and enhance product quality. Therefore, it becomes important to evaluate how such technological changes influence productivity and to implement supportive policy measures. This study reveals that in approximately 73 percent of the cases where technological advancement has occurred, the benefits derived from the diffusion of technology have considerably outweighed those from pure technical progress (TFPG). Based on these findings, it advocates for a dual strategy that emphasizes both technological improvement and broad-based diffusion, as this combination appears to be most effective in enhancing productivity within low technology manufacturing enterprises.

Keyword :

Factor productivity, Technical efficiency, Manufacturing.