An International Comparative Analysis
New Horizons in the Economics of Innovation series
Chapter 7: The Indian Experience
India has the reputation of having one of the largest pools of technically trained personnel. Recently, the quality of India’s IT personnel has been much in the news and governments across the market-oriented economies, especially the United States, Germany and Japan, have been importing these ‘knowledge workers’ to oﬀset shortfalls in this much-needed skill.1 India has an international reputation in some areas of high technology such as advanced computing, computer software, space research and pharmaceuticals. It also has an elaborate network of government research institutes (GRIs), which are engaged in various ﬁelds of industrial research. In terms of our schema, India is a Type 12 country with the requisite skills to design, manufacture and sell a whole host of products. At the same time, the country has depended on foreign sources of technology for a large number of its products and continues to do so and its exports of manufactured products have been unimpressive,3 in terms of both quantity and technology content. India’s national system of innovation has several weaknesses. Among the various countries in our sample, it has had the longest history of government intervention not only in technology development but also in manufacturing. Since 1991, India’s manufacturing sector has been undergoing a wave of liberalisation, the main objective of which is to reduce both external and internal barriers to entry. Such a reduction, it was argued, would enhance the competitiveness of the sector, thereby making it more eﬃcient. But recent research (Nagaraj, 2000) has shown...
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