Introduction

During the period of economic reforms in India, the crisis in manufacturing employment has manifested not only in terms of what is characterised variedly as jobless or job loss growth (falling labour intensity and even absolute decline in numbers) (Das, Sen and Das 2015; Mehrotra and Parida 2019) but also in certain trends which suggest a decline in the quality of employment. These include (a) a steady rise in contractual jobs in the so-called organised manufacturing (Srivastava 2016: 10–12), (b) a decline in the manufacturing employment elasticity at least since the turn of the century (Giri and Singh 2017: 9) and (c) the continued dominance of informality in both production and labour processes across sectors, or the low road syndrome, reflecting entrepreneurial immaturity (Tooze 2017; Das 2005, 2017).

Even as, historically, micro, small and medium enterprises (MSMEs) have been recognised as sources of large-scale job generation, accommodating a wide range of skills and age groups, firms adopt strategies that could reduce costs of production and compliance while they continue to identify and access echelons of markets. MSMEs have no intention of effecting numerical changes to employment, irrespective of what policy expects. MSMEs, even in the face of uncertain market demand and low resources (to invest in the expansion of production and acquiring new technology), have often displayed dynamism and resilience. Unlike integrated large plants constrained by the indivisibility of factors of production, MSMEs in a cluster have been mutually supportive, whether in sharing bulk orders through in-cluster subcontracting or through small-batch production to cater to niche markets or even by using workers from another factory. This has implied that business has thrived through a curious admixture of competition and cooperation in clusters with the munificent role played by the local industry association.

The study, based on both primary and secondary sources of information, aims at understanding what drives the growth and external orientation of MSMEs in the ceramic clusters of Morbi in the western Indian state of Gujarat. This is to unravel the nature of positive transformation, including unleashing the potential to generate jobs, that could be effected through proactive, responsive and symbiotic approaches to policy initiatives, including rescaling territory, infusing an innovative ethos and reaching out to wider markets.