“High-Road Development in a Low-Tech Industry”

This book seeks to rectify the omission of small, low-tech enterprises from scholarship on developmental states and innovation. Given that these very small firms employ the vast majority of workers in the developing world, and developing countries are increasingly exposed to global market pressures, the choice between “low road” or “high road” adaptation strategies has grave consequences for individual and national welfare. Which enterprises respond by cutting wages and working conditions? Which instead respond by upgrading production skills and equipment by adopting new technologies? Why? The answers are in large measure the products of political decisions and social structures. After all, where developing countries and industries have upgraded and thrived in globalized markets, the public sector has been a critical partner for the private enterprises. This book directly examines the politics of this variation among small producers in the developing world, focusing on the importance of both public-private ties and private sector networks for innovation.

The book takes as its primary empirical focus the Mexican government’s efforts to develop and disseminate a lead-free glaze to the roughly 10,000 workshops in the decentralized ceramics industry. This discrete developmental effort was a response to both international market pressures and concern for ceramics workers’ labor conditions. Based on the nature of enterprises producing traditional ceramics – low-tech, poorly educated, geographically isolated, low profit – previous work on innovation would predict little to no upgrading. Yet, public-private collaboration, tutorial regulation, and engagement of existing networks of producers have moved many workshops toward a new non-toxic glaze. Analysis of this case with empirical methods from ethnographic observation and interviews to social network and statistical analysis is designed to address the issues of why producers adopt (or not) an available technology that can improve their competitiveness, and how government intervention can mitigate barriers faced by low-tech enterprises. Finally, comparison with other structurally and technologically similar sectors in Mexico (leather tanning, brick kilning, rustic furniture) broadens the analysis to other industrial contexts.

They study develops a novel set of findings about the politics of state-led upgrading among non-innovative enterprises. First, it concludes that in small, low-tech industry, complementary state and social inputs are necessary for the “co-production” of improved economic and environmental conditions. Regarding state inputs, the creation of a collaborative “public space,” sheltered from market competition is critical for less innovative firms to join with others to uncover workable innovations. Public officials, such as regulatory agents, are often well situated to carve out these sheltered, collaborative public spaces. Existing social networks are a key private sector input: these act as critical conduits for coordination and the flow of information about technology and markets. Finally, the book argues that information that is theoretically free (i.e. openly available) is often costly in practice, and government has a critical role to play in reducing this cost and, in so doing, turning market and regulatory pressures from threats into opportunities.

In sum, leveraging a careful analysis of little-known industry, this study offers important theoretical contributions to the political economy of innovation and development, including the severity of barriers to innovation in some sectors, the need for co-productive innovation strategies, and the importance of existing private sector networks for state engagement.

Support for the project has provided by: the Fulbright Foundation, Social Science Research Council, National Science Foundation, the Latin American & Iberian Institute, University of New Mexico, and the Kellogg Institute for International Studies at the University of Notre Dame.