MODERN SMALL INDUSTRY FOR DEVELOPING COUNTRIES.

By EugeneStaley and Richard Morse '44. New York:McGraw-Hill Book Co., 1965. 435 pp.$9.00.

"Economic development" very often conjures up images of massive dam building, road construction, jet airports, and other public infrastructure, these developments soon followed by equally massive private enterprises — steel mills, petrochemical plants, automobile companies, etc. The authors of this book caution us, though, that there is a rather neglected side of modernization that in aggregate is also fundamentally important — the role of small-scale manufacturing.

"Too often, in countries striving to industrialize," point out the authors, "small industry has been regarded as an inevitably backward and lagging part of the economy, perhaps to be aided for social reasons and in a rather defensive and protective spirit." But this is a mistake, for existing and new small industries are a latent resource of proven value in development. The authors make no special pleading for smallness per se: they explore, too, the diseconomies, and the technological and managerial backwardness, often characteristic of small enterprises. Rather, their hypothesis is that the optimum industrial structure for any country will inevitably be a combination of large and small - and that both are deserving of thoughtful analysis.

Part I discusses nonfactory industry the household unit, and artisan activity (in and out of the home). Some of the latter, the authors feel, offer great potential for modernization, and several striking case examples are analyzed (for example, the All India Handicrafts Board of the Government of India). The authors are much less sanguine about most household industry. "Over the very long pull, it seems bound to disappear - except for specially situated or handicapped persons [and] by the do-it-yourself movement."

It is the small factory, though, that is the center of focus. First, through precise description backed by ample statistics the parameters of small industry are laid out. Excellent cross-country summary tables are included, and a series of individual case examples around the world give added reality to these figures. Then a series of chapters analyze various policies that developmentminded governments of newly industrializing countries have used - and might adopt - for small-factory development. The employment-creation potential of these factories is particularly emphasized, and the problems involved in industrial decentralization are explored. Finally, specific small-industry development programs around the world are described, and the authors include a full chapter on their own construct of the basic elements needed for such programs.

This is another book in the admirable "McGraw-Hill Series in International Development," and like its companion volumes is chock full of practical wisdom for this great problem of today, developing the less-developed world. Yet this is no simple "how-to-do-it" volume, for basic theory stands behind the examples throughout (and the authors, both Stanford Research Institute associates, have fully documented this all the way).

One could only fault this book for the authors not including more depth on one's own pet materials: I would ask for more on the basic theory behind entrepreneurship (perhaps some of David McClelland's research on how to "grow" achievement motivation would have deepened the book). But this is a mere quibble. This book is first rate.

Professor of Business Administration