An alternative model of development? Co-operation and flexible industrial practices in India

Going beyond the notion of macroeconomic flexibility, this paper argues that flexibility at the firm/industry level is crucial to rapid adjustment to changing economic circumstances. By examining various kinds of Japanese-type flexible industrial practices adopted by a few firms in the Indian automotive industry, I show that aside from promoting competitiveness and externalities, such practices institutionalize co-operation. Developing countries, like India, undergoing economic reforms and requiring industrial investments, need to strengthen such institutional arrangements, thereby ensuring employment security, skill development, and social stability.