KOCHI: Lack of efforts to build quality-based brands, low level of expenditure on research and development and inadequate investment in technology mark the small-scale industrial scene in Ernakulam district.

Only one per cent of the small-scale units in the district have won product or process quality awards. The prevailing process and product innovation levels put units in the district at a disadvantage, says a study on the opportunities for small-scale enterprises in Ernakulam.

The study was conducted by the International Centre for Economic Policy and Analysis of the Department of Applied Economics, Cochin University of Science and Technology.

The study, done at the instance of the State Industries Department, found that the small-scale units showed a rise in investment per unit after 2004. Average investments in units started after 2004 ranged between Rs.50,000 and Rs.3,00,0000.

However, the study found that once the initial investments were made, there was little or no investment in upgrading technology.

The low level of investment in these aspects of small-scale industry business had serious repercussions on growth prospects and the very survival of the units.

The average level of investment in technology in the small-scale units in Ernakulam was Rs.45,000.

This was only 14 per cent of the average investment in a firm in the SSI sector.

It was also found that about 30 per cent of the investments went into securing the land needed for the project. "When a major share of the capital is expended on land, it becomes very difficult for these firms to raise money for other purposes," said the study.

It said that only 10 per cent of the annual expenditure of SSI units that were studied went into renovation of equipment.

Similarly, only five per cent of the units allotted money to correct problems in the distribution channel.

The study also took a look at the sales direction and magnitude of the small units. Ninety-one per cent of the small-scale units depended on sales to clients within the State while six per cent sold products to clients in other parts of the country. And, only two per cent units exported products.

The study showed that total sales rose two to eight per cent for those units that sold products within the State. Those who sold their products outside Kerala saw sales going up five to 15 per cent.

The exporting units were left out of the comparison as these units were purely export oriented and their products varied widely from the locally sold products.

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