Abstract
Some authors state that the importance of small-scale industries, especially those located in rural areas, decreases in the course of development. While available empirical evidence on this issue diverges significantly, what seems clear is that these industries have been expanding in many less developed countries, including Indonesia. From this point of view, this study raises a question as to whether the high rate of growth of rural small-scale industries is a sign of poverty or progress. Based on a survey, this study shows that the majority of small industrialists in rural areas are ‘pushed’ to establish their own industries, which suggests that the growth of these industries is more a sign of poverty than of progress.
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