Working paper series eu-india innovation network project

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Contract n. IND/B7-3001/95/115-31


Working Paper no: WP/eu-ind/120

SEAKE Centre, University of Brighton, UK
Gujarat Model of Entrepreneurial Innovation:

A Study of Surat diamond Industry

Keyoor Purani

SEAKE Centre

(Social and Educational Applications Knowledge Engineering)

School of Information Management

Faculty of Information Technology

University of Brighton

Moulsecoomb, Brighton, BN2 4GJ UK


A Research Report on

Gujarat Model of Entrepreneurial Innovation:

A Study of Surat Diamond Industry

Prepared by:

Keyoor Purani,

Faculty Member, GLS Institute of Business Management

Under Guidance of:

Prof. Dhawal Mehta,

Director, GLS Institute of Business Mangement,

Gujarat University,


As a part of:

EU – India Cross Cultural Innovation Network Project


Table of Contents

Keyoor Purani 1

The Research Overview 5

1.1 Introduction: 5

1.2 Research Objectives: 5

1.3 Research Methodology: 5

1.3.1 Exploratory Research Design: 5

1.3.2 Conclusive Research Design: 6

The Gems & Jwellery Industry 7

2.1 Indian Gems & Jwellery Industry: 7

2.1.1 Structure, Size & Growth: 7

2.2 SWOT analysis of Indian G &J Industry: 9

2.2.1 Strengths: 9

2.2.2 Weaknesses: 9

2.2.3 Opportunities: 9

2.2.4 Threats: 9

2.3 The Diamond Processing Industry: significant segment of Gems & jewellery industry in India: 9

2.3.1 Diamond & India – historical significance: 10

2.3.2 Indian diamond polishing industry & Global Diamond industry structure: 10

2.4 Diamond Processing Industry in Gujarat : Surat & other clusters: 11

2.5 Key Characteristics of Diamond Processing Industry in Gujarat: 12

Entrepreneurial Innovation at Surat 13

3.1 Entrepreneurial Innovation – the concept: 13

3.2 Innovation in Diamond Processing Industry in Gujarat: 14

D/D Product-mix Innovation: 14

Fancy cut diamonds: 14

3.2.3 Use of Indigenous machines of non-perfect crystals: 14

3.2.4 Small diamond-Export market Niche: 14

3.2.5 Small Scale, Cottage business: 14

3.2.6 Roll-over skills, on-the-job training: 15

3.2.7 Networking: 15

3.2.8 Harmonious Co-existence: 15

3.2.9 Self Finance: 15

Gujarat Model of Entrepreneurial Innovation 16

4.1 Conceptual Framework of Entrepreneurial Innovation model: 16

4.2 Gujarat Model of Entrepreneurial Innovation – Diamond Processing Industry: 17

4.2.1 Enterprise Profile: 17

4.2.2 Heuristics: 18

4.3 Conclusion: 20

Intrinsic Orientation: 21

4.3.2 Organic Growth: 21

4.3.3 Growth driven by a vision of sharing and community building 21

4.3.4 Perseverance, Learning by doing 21

Annexure 1 : Brief outline of successful cases of Enterprises in Diamond Industry 23

Annexure-2 : Illustration of how heuristics & their strengths were identified 26

Annexure 3 : List of Organisations contacted for Exploratory Study 27

Annexure 4 : List of Enterprises Contacted (Sample) 28

Annexure 5 : Data Collection Instrument 29

Bibliography 30

The Research Overview

1.1 Introduction:

This research forms a part of research on Gujarat model of innovation and has been carried out as part of EU-India Cross Cultural innovation network project.

Gujarat model of entrepreneurial innovation is developed on the basis of innovative behaviour at the grass root level displayed by small entrepreneurs and entrepreneurial orientations typical of culture of Gujarat, which resulted such innovation. Gems & jewellery is one of the five industries selected from Gujarat, which has displayed great innovation at small enterprise level.

Gems & jewellery industry is second largest foreign exchange earner in India and concentrated in south Gujarat with number of small scale units engaged in diamond processing, doing innovations locally to serve 80% of world’s diamond market.

1.2 Research Objectives:

1.2.1 To study the Gems & jewellery industry and identify key characteristics

1.2.2 To identify innovations made by the entrepreneurs in the diamond processing industry

1.2.3 To study Innovation orientation, entrepreneurial orientation and develop model describing Pioneering – Innovating behaviour of the entrepreneurs of Gujarat in Diamond processing industry.

1.3 Research Methodology:

A year long research is divided into two sub researches: Exploratory & Conclusive

1.3.1 Exploratory Research Design:

(a) Literature survey:

Extensive literature survey was carried out to get insight into the Gems & Jwellery Industry in India, Surat Cluster of Diamond industry, its structure, growth and characteristics. Literature survey also gave broad idea of industry organization innovations in Surat cluster of Diamond Industry.

Various sources of secondary data used are:

Prism (Gems & Jwellery Export Promotion Council, Mumbai),

Diamond World (International Journal House, Jaipur),

Diamond Samrajya(Surat Diamond Association, Surat),

Diamond Handbook of Surat (Gems & Jewellery Information Center, Jaipur)

Saket Industrial Digest (Ahmedabad),

Business Magazines


(b) Experience survey:

In-depth personal interviews of experts with a non-structured questionnaire method was undertaken of the following experts:

Director, Indian Diamond Institute, Surat;

Director, Gujarat Diamond Training Institute, Ahmedabad;

Chief Editor, Diamond Samrajya, Surat;

President, Gujarat Chamber of Commerce & Industry, Surat

Chairman, Gems & Jwellery Export Promotion Council, Mumbai

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