Small Scale Production Production

Small Scale Production Production

Small-scale Production, production in small factories or workshops (which may be part of a large firm) or production by small firms (which implies small factories). The meaning of 'small' is partly a matter of definition. The British Census of Production distinguishes size according to the number of persons employed. Another distinction could be made in terms of capital employed. The important point is the way in which total output is divided between firms in an industry. Small-scale production in this sense may refer: (1)to a situation in which the total output of a product or group of products is made by a large number of firms none of which contribute a significantly large part of it; (2) output cones from a few firms each of which is small; small units exist together with bigger firms producing the same or similar commodities.

Small-scale business is likely to persist to some extent because of conditions in the market, e.g. imperfect communications; habit and convenience may enable the small shop to survive despite the economic advantages of larger enterprises; the same may apply to craft production. In both there may be the attraction of real or imagined specialist qualities of product or service. The absence of considerable economies of scale and the existence of diseconomies at relatively small size of unit are also important. Hence agriculture has lent itself to small-scale production because of the importance of personal management, supervision and judgment and the consequent limitations on the use of large-scale management. The framework of law and custom in the inheritance of land may reinforce this influence. Similarly, small units often persist where personal service and immediate alter-sales service are important: hairdressing is an example of the first; small paint firms of the second. Even within big firms small-scale production of particular lines may take place.

It is typical of the variety of economic life as a whole that small-scale production persists and is renewed alongside large-scale enterprise in the same or similar industries and markets. This independent vitality reflects the capacity of the small unit to satisfy individual requirements and to benefit from particular or local conditions; it depends also on the continuing inventiveness and optimism of new entrants. {

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