I regret that I am an expert on India, and that I an not an economist professionally prepared to respond to these questions. But the questions are interesting, and I suspect the answers shed light on my views of international development.
Questionnaire on India as a Knowledge Economy
1.India is fast growing as a knowledge economy. How do you view the current scenario and its growth potential?
I see India India's growth in knowledge-intensive fields continuing. and I see that growth yielding substantial long-term economic and social benefits to India.
2.What are the areas of the knowledge sector that are driving the growth of India as a knowledge economy?
Indian culture values knowledge highly, and that cultural value is the main driver of India as a knowledge economy. I would include cultural attitudes toward knowledge as within the “knowledge sector”.
Educational services, especially those in the elite secondary schools and the world class universities, have provided the human resources that enable progress so far in developing a knowledge economy. Surely the educational system is part of the “knowledge sector”.
There seemed to be little progress until government policies open the economy, encouraging a greater export orientation and resulting in increased investment. Thus, one has to include the enabling policy environment as part of the “knowledge sector”.
Clearly software and ICT enabled services are important industrial drivers. I expect to see areas such as pharmaceuticals increasingly important, and I hope to see India benefit economically from nanotechnology based industries.
3.How important do you think is the development of knowledge economy for the progress of a country as a whole?
I am not clear what you mean by this question.
In the sense of using improved knowledge as a driving force behind all aspects of Indian development, I think the development of the knowledge economy is central to development. I think the experience in Western nations is that improved technology and improved organization drive the productivity improvement that in turn drives long term growth. Thus, modern knowledge institutions are critical to improving agricultural productivity, providing good health services, etc.
In the narrower sense of the explosive growth of knowledge intensive economic activity in Bangalore and Mumbai, I think there is a significant opportunity and some threat. The growth of this sector provides resources, impetus and an example that would serve India’s national development well.
However, many have commented on the curse of mineral wealth, suggesting that countries that have relatively large mineral exports have often failed to utilize the income generated to educate their people, and have utilized the resources in ways to allow reforms to be postponed. Elites have benefited greatly, but their countries did not develop. I suppose something of the same kind could happen in India, based on the export of knowledge intensive goods and services, produced in an enclave productive environment. The best brains in India might do India more good focusing on India’s problems and India’s development, than being rented out to solve problems of rich countries.
4.Education being the fundamental enabler of the knowledge economy, what does the education system of the country needs to do in order to develop the skills of knowledge workers?
Interesting that there should be a gramatical error in the phrasing of the question.
The success to date has been based on elite schools and especially a capacity in science, engineering and other technology fields developed over decades. This of course has to be continued.
I would suggest that educational excellence must be spread much more widely if India as a whole is to enter the knowledge economy. I would hate to see a dual society institutionalized with an educated elite participating fully in globalization, and an uneducated majority left behind.
5.It is being said that while knowledge workers can further advance as entrepreneurs in a knowledge economy, the industrial worker or the layman is being left behind and thus creating a divide. Your comments on this.
I think that pay reflects the supply and demand for job skills. The development of India, driven by certain knowledge intensive industries, is increasing the demand for goods and services. But the increase in demand is not uniform, and the demand for some services is increasing faster than for others.
Development means, importantly, increasing productivity, and specifically increasing worker productivity. This too is proceeding unevenly.
Globalization also means that the markets affecting the supply and demand for labor are expanding. As India gets richer, its low-wage labor force will be facing competition from other nations with still lower labor costs.
The industrial worker or agricultural worker with little education and few skills, producing in sectors where productivity is increasing faster than demand, is in real trouble. The balance between demand and supply for his labor is changing in the wrong direction.
The solution to the problem is in part mobility. It involves the willingness to move from geographic areas with poor job prospects to others with better prospects. It also involves the ability to move from occupations with poor prospects to others with better prospects. This in turn depends on a social and educational system that prepares people to move over, and to move up.
6.What are the key issues that India needs to address to spur growth and innovation in the knowledge sector? What does India need to do to create and sustain an effective knowledge economy?
The economists would probably say policies and institutions. I don’t think India will progress as much as it should without a policy environment that encourages investment and innovation. And I think it important to strengthen institutions including India’s participation in international markets, legal institutions, governance institutions, intellectual property rights institutions, etc.
The security specialist would probably emphasize stability. Certainly war with China or Pakistan would not enhance India’s development. (History suggests that the great wars usually were not predicted decades in advance, so today’s peace can not always be depended on tomorrow.)
The engineer would probably point to India’s infrastructure, which seems inadequate to the task before the country and fragile.
Anything that can be done to insure good fortune should be done. Pandemic diseases, climate change, and global competition for natural resources seem to have significant potential to emerge as threats in the next couple of decades.
7.How do you view India in the next two decades as a knowledge economy in the global scenario?
“Through a glass, darkly.”
The continuance of current trends seems more likely than any other scenario. India would grow rapidly, while China grows still more rapidly.
Globalization would continue, supported by continuing technological development, and by further expansion of a global trading system that encourages specialization in which countries increasingly exploit their comparative advantage. India would look increasingly outside its borders.
Environmental problems and resource shortages would be exacerbated, and India would struggle to make the institutional changes necessary to apply the increasing global understanding of these problems to their solution.
The world’s largest democracy, serving a huge nation with a hugely diverse population, will struggle to adapt politically and institutionally to an ever increasing rate of social, economic and environmental changes.
8.Any other comments?
Good luck!
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