Government, Innovation and Technology Policy

Government, Innovation and Technology Policy

An International Comparative Analysis

New Horizons in the Economics of Innovation series

Sunil Mani

This unique book offers a comprehensive analysis of the changing role of government with respect to domestic technology development in eight countries in both the developed and the developing world. The author distinguishes between those countries which can be classed as creators of new technologies (Japan, Korea and Israel) and those which possess the potential to create new technologies (Singapore, Malaysia, India, South Africa and Brazil).

Chapter 7: The Indian Experience

Sunil Mani

Subjects: economics and finance, economics of innovation, innovation and technology, economics of innovation, innovation policy


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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