the industry now are: deregulation, the challenge of global operations, increased competitiveness, heightened eco-sensitivity, and the volatility of the markets. The goal facing the industry today is one of achieving a balance between business innovation and technical innovation.
     This accelerating change is a product of transformation of technology, markets, products and processes. Multiple technological breakthroughs, especially in the domain of communications and information processing, greatly reduced product cycles, and rapidly changing markets have together forced a change in the way business needs to be conducted today. In the face of rising uncertainties, organizations today are increasingly dictated by the need to reduce business risk, and to meet pressures of short-term financial expectations.
     The opportunity of global operations implies coming to terms with human resource flights and new markets. The challenge of enhanced competition has forced the industry to focus on curtailing cost of production. There is a shift towards concentrating on “core-competencies”, and hence on focused competition as a survival strategy. Coupled to this is the stringency of emergent safety, health and environmental (SHE) regulations that have made the search for newer, efficient technologies imperative. There is a far greater pressure today – especially on the process industry - to meet SHE goals commensurate with low individual, societal and environmental risks. Finally the market instabilities - with floating exchange rates and unstable currencies - now require organizations to cultivate flexibility in managing their business.

     The net result of the above trends is that there is today a greatly enhanced competition for capital, material resources, talent and customers. As G Hamel and C K Prahalad have pointed out in their book Competing for the Future, the companies most likely to succeed under these challenging conditions are those that can most effectively rethink their organization, business and technologies in the most creative ways to respond to the new market environment. A balancing act between short and long-term goals appears inevitable.
    The manufacturing industry in India has played a significant role in the country’s ongoing metamorphosis - although a slow one - from an agrarian to an industrialized economy. Until the early 1990s, our economic policy focused on a drive for self-sufficiency with a minimum of foreign participation in the manufacturing industry (MI). Reforms had then proceeded slowly — today a large public sector co-exists with a sizeable and diversified private sector. The accelerated reforms in the 90s were welcomed by the industry leaders, but unfortunately the gains have not been quite commensurate with the expectations. Although till the mid 90s the industry grew almost at the rate of 10% annually, the figure today has plummeted to about 4%. The annual rate of growth of employment in the manufacturing sector has dropped from 1.2 per cent in 1991-92 to virtually zero today. No doubt, the present crisis in the MI is in part due to the current global economic slowdown, but there are deeper reasons behind the symptom.