Neighbourhood as factory
The non-planning in slums is seen by many as a problem but it is often the secret of their economic and political success
Solomon Benjamin
Views of Viswas Nager | Inside the Neighbourhood as Factory: worker housing a seedbed for new firms
Photos: Solomon Benjamin
“Un-planned, slums, non-conforming, illegal, un-authorised, and sub-standard”: these are labels that planners and administrators driven by the need for orderly modern cities term 90% of the city areas where people live and work. At one level, there is the disjuncture between Master Plans and what evolves on the ground – an issue that has long plagued the planners. In Delhi, like other cities, only 8-12% of residential space is governed by Master Planning. For example, 57 of the 67 local economy clusters are located in non-Master Plan settings. In 1995, 250,000 small and large trade and manufacturing firms underpinned the capital’s economy for possibly more than two-thirds of its inhabitants. Only 11,500 of these, mostly manufacturing, firms were located in planned areas. Such a situation is typical for most small towns and cities in India which do not have a Master Plan.
For the essence of clustering innovation is the essence of urban settings – the politics of contested location, land, and space
Is the lack of Master Planning really a problem? Let us consider this issue more closely by focusing on a neighbourhood, Viswas Nagar in East Delhi, that provides a vivid illustration of one “slum”. In 1991-1995, this settlement emerged as India’s largest centre for the manufacturing of electrical power, control cables and conductors. With a voting population of 21,000, it provided work to 25,000 in direct manufacturing and another 35,000 in trade and ancillary activities. This does not include the extensive jobs in the construction industry spurred by this emerging economy – another important employment generator. All this adds up when we consider that Delhi has at least 15 similar industrial clusters, and about 60 smaller ones. It is hardly surprising that the bulk of employment in Delhi comes from trade, small-scale manufacturing and services, and not government jobs although this is the state and national capital. One realizes the wider implications of this when the economy of Viswas Nager is closely inter-linked with the other “un-planned and non-conforming” trade and manufacturing activities that make up the economies of every single town in North India, and many others in the rest of this vast country. The key question then becomes, how do cities innovate, respond to growing populations, and most fundamentally, what is the nature of the politics that underpins such technological change? Is it that of the classical labour – capital relationship, or are there new forms of competition? Do planners, working in the Indian context from a Nationalistic a free market perspective, actually restrict such economic productivity, which is a threat to centralized political control – both of the Nation State or big business dominated by international capitalism?
Let us return to “slums” such as Viswas Nager to get a closer understanding of how these turn out to be a highly efficient economic systems producing innovative products, and generating skills and extensive employment. We find that the unregulated disorder of the neighbourhood setting, far from being a disadvantage, is on closer inspection, the secret of its economic and political success. Perhaps the clustering of firms is necessarily “urban”, in that it finds and fuels political space that drives a particular type of economy. Given the political climate of big business colluding with the Nation State, it is hardly surprising that these functional aspects are purposefully misunderstood within the techno-managerial approach. For the essence of clustering innovation is the essence of urban settings – the politics of contested location, land, and space. While official efforts (including those by NGOs) to promote urban employment have been low on success, higher levels of government in their zeal for planned development clear such ‘slums’, and destroy or seriously incapacitate what exists.
For sure, the fact that much of India’s production and manufacturing happens within clusters of firms has attracted the attention of policy makers and international development agencies like the UNIDO (assisted by the Italian government). They go to the extent of listing more than 350 clusters, and are now working on a “cluster point” program to re-orient employment policy (inspired by the “Third Italy”). The vision here however, is that of a modernization disconnected from the daily reality which is the actual context for innovation on the ground. The ground, according to the planners and administrators, is merely a slum setting, polluting, small pre-modern firms lacking certification, and depending on non-institutional forms of credit. They are assumed to survive from the “low road” around exploitative practices like child labour, don’t pay taxes, and are connected to ‘low quality’ domestic markets. Never mind the fact that big business get huge tax breaks, and almost all the cases of serious industrial pollution have been from large industrial “accidents” such as the Union Carbide disaster in Bhopal. “Policy making” and interventions, even on the rhetoric of “cluster development”, continues around a strong centralized planning approach, which in reality, is based on an elitist approach and in favour of the larger of firms. For example, the promotion of specialized industrial parks with the leadership of the “most modern” of the firms within the cluster. Seen to be “anchors”, these are to help link the larger system to export markets, with smaller firms acting as dedicated sub-contractors. Management, patents, and financial consultants (paid by international donors) are to build up technical, legal, and financial skills. Other interventions promote common pollution control facilities – in partnership with state level pollution control agencies. These, along with the capital-intensive industrial parks, are implemented by “Special Purpose Agencies” using Public / Private partnerships.
Existing economic structures are not recognized for their economic worth since they find little conceptual space in categories spurned by a linear view of modernization
Existing economic structures are not recognized for their economic worth since they find little conceptual space in categories spurned by a linear view of modernization.
Our research over the last fifteen years suggests that the mainstream cluster promotion approach is not just elitist (empowering the larger firms) but misses out the essential pre-requisites for innovation. Part of this conceptual problem is political. For instance, the push by the larger firms to establish patents and copyrights, or then to access large subsidized plots with good real estate value; another part of the problem is image-velated – where the physical image of “slum-like” environments that planners hope to clean up!
Productive slums and the link to the transformation of land
Viswas Nager’s production system operates much the same way as those of clusters of firms elsewhere in India and the world including the famous “Third Italy”. However, to capture the spirit and essence of the productive structure of cities, I coined the concept “Neighbourhood as Factory”. This concept is not only about the neighbourhood as a centre of industrial employment. It refers to the way jobs are generated at different levels set within residential environments. For instance, even in a relatively more industrialized setting like Viswas Nager, there are many more non-industrial jobs than that of manufacturing. Thus, the backward and forward linkages drive the neighbourhood economy. At the industrial level, jobs come about through intensive inter-enterprise linkages. Some factories also manufacture heavy-duty cables that are supplied to power generating corporations and Indian Railways – both known for their stringent technical quality control. Several firms specialize in co-axial cables the demand for which increases with the spread of cable TV, and also ribbon cables used inside computers. In addition, other enterprises manufacture the capital machinery used for the copper wire drawing machinery, PVC insulation, and individual components like industrial heaters, extruders etc. This intensive activity has attracted large numbers of small traders selling chemical stocks in smaller batches and poorer people plying the specially modified cycle rickshaws to transport semi-finished material from one factory to another. An important part of the support services is the customisation of production to respond to new products and make for an innovative local milieu.
The Logic: Suitcase Entrepreneurs, and the transformation of land
The systemic aspects of the Neighbourhood as Factory operate at different levels. The first has to do with the marketing of goods in rapidly emerging domestic markets in a large country like India, and also its neighbouring ones like Nepal, Sri Lanka, and Burma. These markets are fuelled by extensive small town and rural electrification, and also large volume demands from metropolitan areas like Delhi. The important point here is that these locations, national and international, are accessible to what we could call “Suitcase Entrepreneurs”. These are marketing agents travelling with their suitcases filled with samples of shoes, plastic fittings, small electrical products, and in those from Viswas Nager, cables and conductors. They use a low cost but extensive network of trains and buses to reach retail and wholesale markets in this wider territory. This direct link between emerging markets and the production environment in Viswas Nager is also the main driver for more specialized products and in turn the driver for customization of production in the Neighbourhood as Factory. The point here is that one of the pushes towards technological change comes from a non-corporatized and decentralized economic structure enlarged via the systemic linkages of the Neighbourhood as Factory.
The key question then becomes, how do cities innovate, respond to growing populations, and most fundamentally, what is the nature of the politics that underpins such technological change?
Another fundamental factor is that of land. It is well recognized that land issues are some of the most fundamental ones of urbanization, and connected to economic development. However, land issues were seen to be relatively passive – forming a static base for production to take shape in. In the initial stages of urbanization on the urban periphery, larger plots with low levels of infrastructure get settled in. Occupants move in mostly for residence. A few however initiate a form of simple land intensive production on the relatively cheap land that is not dependent on high levels of infrastructure. There are other economic activities too, relating mostly to small shops retailing items of daily consumption. As urbanization happens more intensely, large parcels of land get further divided into smaller plots. Another material basis that underpins the clustering of firms, relates to varied forms of tenure by which land is held. This in turn leads to increasing productivity and economic advantage. When first viewed, the uneven distribution of infrastructure in a non-Master planned settlement seems chaotic, “slum-like” creating the rationale for “Planned intervention”.
A closer examination of clustering shows, however, that the varied firms that constitute a network of interlinked concerns operate their manufacturing and trading activities in direct connection to the varied infrastructure of the particular land parcels they are located on. To put it simply, a firm drawing copper wire from a thicker gauge to a thinner one does not require as high a level of infrastructure, say, as one coating those wires with PVC or a firm that enamels the finished copper wire for motor winding. Similarly, a small trading outlet selling raw stock of PVC pellets (to the insulating firms) requires not high infrastructure but ‘market access’ on a street corner. Since access to the level of infrastructure impacts land prices, firms locating differently need to sink varied capital investments, and a neighbourhood with expensive and cheap areas in close physical proximity allows for the networking of firms to take place.
All this is highly political and approaches to such ‘non-master planned’ areas have been varied. One set of actions, made famous by the state of internal emergency of 1975 to 1977, and again more recently, is to use violent eviction as a way to make way for ‘Planned Development’. Another approach driven by local politics via municipal councils, is that of ‘Regularisation’. Set in motion by inhabitants in the non-master planned area, they seek public improvements of basic infrastructure and services. This is also the dominant way cities are built, and a core feature of a larger level of urban politics, when we consider its location in the relationship between municipal councils and higher levels of governments at the state and national level. Master Planning is located in ‘Development Authorities’ under the control of state governments (and in the case of Delhi under the national government). It is perhaps these institutional aspects which shape the politics of what gets promoted in the name of ‘cluster’ development: rigid industrial parks bound by tight IPR regimes, and where smaller firms are strictly controlled by larger ones. All this also tells us, that cities and their economies are far beyond the narrow confines of policy and decision-makers, and are driven by a complexity of economy, land, and social processes underpinned by complex inter-related political economies. Perhaps the time has come to listen rather than direct!
This article is discussed in greater detail in a) “Touts Pirates, and Ghosts” in “SARAI reader 05: Bare Act”, February 2005 (pg.242-254), Delhi, www.sarai.net; b) Benjamin S. “Urban Land Transformation for pro-poor economies”, in “Geoforum” (Pergamon Press) Volume 35, Issue 2, March (Edt. S. Oldfeild) pg: 177-197.
