Productivity Gains from Technological Intensity- A Study of Two Iron and Steel Companies in India

Abstract

The productivity achievement due to technological progress has been studied here for two steel plants in India. One steel plant is more than hundred year old from the private sector, and the other one is the giant public sector group of plants fifty to sixty years old. Technological progress has been measured by technological intensity in terms of gross block in plant and infrastructure per unit of saleable steel production. The impact of technological intensity has been assessed by productivity of three factors, namely, the quality of steel production, energy consumption, and the manpower productivity. Each factor productivity, total factor productivity, and operating profitability has been examined for their functional relationship with technological intensity. The average technological intensity of the private sector plant has been 50% higher than the public sector one. The average productivity of the private sector plant has been higher, 34% on quality, 7% on energy, and 49% on manpower, 32% on total factor productivity, and 62% on operating profitability. Polynomial function explains strong relationship of factor productivity levels with technological intensity, particularly for the private sector steel plant.