India's Changing Innovation System Achievements, Challenges, and Opportunities for Cooperation: Report of a Symposium (2007) / Chapter Skim
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Panel II: Synergies and Gaps in National and Regional Development Strategies
Panel II: Synergies and Gaps in National and Regional Development Strategies
Pages 53-76
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From page 53... ...
A workshop to be hosted on July 4 by India's Council of Scientific and 5Carl Dahlman and Anuja Utz, India and the Knowledge Economy: Leeraging Strengths and Op portunities, Washington D.C.: World Bank, 2005.
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From page 54... ...
The broad theme for the present panel could be the subject of numerous separate presentations, each of which might approach it from a different direction: by considering questions of national versus state government; urban versus rural; industrial, service, or agrarian policy; even regional and subregional development. Additionally, it could be addressed from the point of view of the entire framework of government policy, comprising policies of the central and state governments alike, or by asking whether the policies of the state governments were in conformity with those of the central government.
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From page 55... ...
The winds of change have not yet reached these sectors, not because of lack of awareness but because of a lack of will arising from local political compulsions. The culture of corruption in state and local governance means that, as Rajiv Gandhi had not so jocularly estimated, only 15 percent of the funds earmarked for development actually reach their intended beneficiary.
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From page 56... ...
Cause for concern of late, however, is the deceleration in both production and factor productivity growth recorded in some of the major irrigated production systems, and many areas still do not have access to seasonal irrigation. Although public research and extension programs have played a major role in bringing about the Green Revolution, old methods relying on government servants to transfer technology clearly have severe limitations.
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From page 57... ...
"Similarly," Mr. Subramanian said, "it would be naïve to think that the mere entry of large retail produce-marketing chains from abroad would automatically bring joy to India's rural areas." Severe physical infrastructure bottlenecks have to be addressed before the entry of large corporations could add significant value through improving products or generating employment.
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From page 58... ...
Dahlman noted that it is home to 17 percent of the world's population and has the eleventh largest economy as measured by nominal exchange rates but the fourth largest in terms of purchasing power parity (PPP)
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From page 59... ...
, regulatory quality, and the rule of law; • Innovation -- researchers in R&D, scientific and technical journal articles, and patent applications granted by the U.S. Patent and Trademark Office; • Education -- adult literacy rate, secondary enrollment rate, and tertiary enrollment rate; • Information Infrastructure -- fixed and mobile telephone lines per 1,000 people, computers per 1,000 people, and Internet users per 10,000 people.
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From page 60... ...
proc fig 1 A similar chart depicting the status of this "very serious competition" 25 years before, he said, would have shown India ahead of China in just about every variable, whereas Chinaplot lines have been India in everythingoriginal low res lines The china and India has now surpassed redrawn on top of but democracy and some aspects of the rule of law. He then projected a graph representing spatially the relative positions of numerous countries in the global knowledge economy (Figure 2)
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From page 61... ...
with projections of a dozen major economies' real per capita GDP growth between 2004 and 2015 in terms of purchasing power parity; these projections were based on the economies' records of growth over the previous decade. Plotted according to the vertical axis was GDP in trillions of dollars, with the horizontal access representing time.
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From page 62... ...
In addition, India: • is becoming the world center for many digital services, a location where "anything that can be offshored" can be done very cost-effectively; • is becoming a center for contract innovation for multinational companies, which have established around 400 R&D centers in India to tap its most valuable human resource, its scientists and engineers; • enjoys a network based in the worldwide Indian diaspora, strongly represented in the United States, which could prove an excellent source of everything from information and advice to access to markets, technology, and financing as India's activities increased in sophistication; • boasts very deep financial markets, far better than China's; and • is beginning to strengthen its export orientation and to seek strategic alliances. As for the challenges India faced, Dr.
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From page 63... ...
Dahlman called this step a fundamental one in that it would set the entire context for change. This involves: • reducing bureaucracy for the entry and exit of firms; • upgrading physical infrastructure, with a focus on power reliability and the efficiency of roads, seaports, and airports; • easing restrictions on the hiring and firing of workers; • reducing tariff and nontariff barriers, because the Indian economy remains among the world's most closed, whereas China, having reduced nontariff barriers since joining the World Trade Organization, has become globally very integrated in pure trade structure; • encouraging more foreign direct investment and increasing linkages with the rest of the economy; • strengthening intellectual property rights and their enforcement; and
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From page 64... ...
The country provides a small elite with excellent education, but it has quality problems, even in higher education, outside the Indian Institutes of Technology and Science. Important measures would include: • expanding the quality of primary and secondary education; • raising both the quality of higher education and the number of teachers, the latter being held down by regulatory obstacles even though salaries were beginning to go up very rapidly; • embracing the contribution of private providers of education and training by lowering bureaucratic hurdles, among which is an accreditation system that has frustrated many large private universities; • developing partnerships between academia and industry to increase the universities' awareness of the skills required to create the knowledge workers necessary for economic progress; • using information and communications technologies to meet the double goal of expanding access to education and improving its quality -- which would involve little more than realizing the tremendous potential India has, given its lead in the sector, to reach out to its very large population; and • investing in flexible, cost-effective job training programs that can adapt quickly to new skill demands.
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From page 65... ...
Dahlman most wanted to emphasize. He pinpointed areas in which India should make a greater effort: • Tapping global knowledge: Its current low share of total world spending on R&D -- less than 1 percent or, in PPP terms, about 2.5 percent -- indicates that India needs to tap more effectively into the knowledge available beyond its borders.
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From page 66... ...
• Nurturing grassroots innovation: In need of stronger support was India's already very extensive program of grassroots innovation, which addressed many of the needs of those left out of the modern economy. • Bolstering formal innovation systems: The advanced technology coming out of both public and private innovation systems could help improve broad social and economic conditions, an example being Mr.
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From page 67... ...
MANUFACTURING INNOVATION AS AN ENGINE FOR INDIA'S GROWTH Surinder Kapur Sona Group Expressing appreciation for the invitation to speak and greeting Minister Sibal and Dr. Mashelkar, who were in the audience, Dr.
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From page 68... ...
To help promote the concept of innovation and its associated processes among Indian manufacturers, the organization has proposed to open institutional framework cooperation with such global authorities on innovation processes as Clayton Christensen of Harvard University, Deming Prize winner Shoji Shiba, and Patrick Whitney, director of the Institute of Design at Chicago's Illinois Institute of Technology. It is also partnering with India's own National Manufacturing Competitiveness Council (NMCC)
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From page 69... ...
The firm had been able to make "quantum" changes within a short time, which he attributed to its being part of a cluster and to the particular set of tools it employed. Sona's focus in its Total Quality Management activities, which began around 1998, is on skill building.
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From page 70... ...
Moreover, he acknowledged, its manufacturing and innovation strategy, geared of necessity to the goal of employment generation, faces a number of challenges. At the same time that India expands production capacity, both through foreign direct investment and domestic companies' enlarging their manufacturing base, it is also saddled with archaic labor laws that could not be changed overnight.
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From page 71... ...
Dr. Kapur appealed to the audience for its support at a moment when Indian companies need training in the tools and techniques of innovation, since innovation, he observed, "doesn't just happen." In its initial year, the CII's Innovation Mission Plan would target 10 to 20 companies in each of five focus sectors: machine tools, automobiles and auto components, electrical equipment, chemicals, and leather.
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From page 72... ...
Kapur expressed particular regard for U.S. institutions of higher learning: "I am so glad that so many people from academia are here," he said, "because that is really what is required." In light of India's strong motivation to generate jobs in manufacturing and of the increased attention paid the sector's problems and opportunities in recent years, he predicted: "We will create winners." DISCUSSION Thanking all three speakers for making rich presentations in such a short time, Dr.
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From page 73... ...
Common to many countries is an attitude that Dr. Wessner summed up thusly: "Small business is important; now let's talk about big business and universities." His question was whether India had programs at either the national or state level designed to encourage technology transfer from universities to SMEs or to provide the early-stage financing for entrepreneurs.
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From page 74... ...
Patel. His own view, however, was that India's macroeconomic reform program had to continue and that it had to take into account all the issues regarding the overall economic environment in India so far raised at the symposium.
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From page 75... ...
Additionally, many of India's southern states had far better systems of basic education and nutrition, a fact related to these states' response to public developmental issues under democracy. But this was also linked to broad macroeconomic development and came back to fundamentals: Without concentration on public health and primary education, nothing else will flow.
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From page 76... ...
However, the real issue, he stressed, is that R&D is required by companies creating their own products and processes, their own intellectual property, rather than by contract manufacturers. He noted that Swati Piramal was to speak later in the day about the R&D efforts that Nicholas Piramal India Limited is making because such efforts are now required of pharmaceutical companies whereas they had not been in the past.
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