Some of the reasons for the survival of small industries are: 1. Perishable Commodities 2. Heavy Goods 3. Artistic Goods 4. Desire for Independent Business 5. State Patronage 6. Subsidiary Industries 7. Joint Family System 8. Unstable Demand 9. Cheap Motive Power 10. Co-operative Organisation 11. Congenial Environments.
Reason # 1. Perishable Commodities:
These goods are not profitable to produce on a large scale, because these commodities cannot be stored and transported to distant markets.
Reason # 2. Heavy Goods:
Some goods are very heavy and thus costly to be transported but their prices are very low. Such goods are produced on the small scale to meet the local demand. For example, clay bricks are produced on small scale, because these are too costly to be transported for sale in the distant markets.
Reason # 3. Artistic Goods:
These goods are not possible to produce on large scale, because their demand is very low. So these artistic goods are produced on a small scale basis.
Reason # 4. Desire for Independent Business:
When there is shortage of capital and some persons do not want to undergo any service, development of small scale industries comes to their rescue. Because of the small capital requirements, the small scale producers have flourished in the capital-scarce countries.
Reason # 5. State Patronage:
In many countries, as in India, the government has also contributed for the survival of small scale industries. Special facilities are given by the government to the small producers. It is a great incentive that helps much in the development of cottage and small scale industries.
Reason # 6. Subsidiary Industries:
Sometimes the very existence of the large scale production creates work for the small scale producers, e.g., repairing of motor cars, trucks and cycles, small industries act as subsidiary industries to a large scale industry. As such, they have ample chances to survive.
Reason # 7. Joint Family System:
The joint family system has gone a long way for the survival of the handicraft and the small scale production. In India, many small scale industries have come into existence because all the members of the family lend their hands in work to maintain the family independence.
Reason # 8. Unstable Demand:
If the production of certain commodities is dependent upon the nature of its demand, especially if the demand is limited, local or fluctuating, it is not worthwhile to have a large scale production. Thus field is open for the small producers.
Reason # 9. Cheap Motive Power:
The production and availability of cheap electricity has given incentive to the growth of small scale industries, because with the availability of cheap power, the small producers can make use of machinery, etc.
Reason # 10. Co-operative Organisation:
The co-operative movement also helps the small scale producers. People with the small capital form co-operative societies and by pooling up their resources start their own business.
Reason # 11. Congenial Environments:
In the case of small industries, there is a further advantage of working in a very congenial environment of the home and receiving unpaid assistance from the members of the family. The work is pleasant and is carried on even though it is less profitable.