India as an emerging high tech giant, But does she have feet of clay?

Abstract

India’s economy has been performing well since the onset of reforms in 1991: growth rate in real GDP averaged around 5.7 per cent per annum during the 1990s and it has now increased to 6.9 per cent per annum during the period since 2000. Estimates on total factor productivity show that this increased growth is accompanied by improvements in the efficiency of resource use. On many indicators of innovation, the country is doing quite well not only compared to its past performance, but compared to the other star-performer China as well. An interesting aspect of this growth performance is the growth of high technology industries such as IT, Biotechnology and the pharmaceutical industries. India has also become a major recipient of R&D outsourcing deals from especially western MNCs. While this is all very fine, questions are now raised as to whether this high growth in technology and innovation can be sustained. This is because there is now strong feeling that the country is experiencing shortages in skilled manpower. Further questions have been raised about its quality as well. Fortunately there is appreciation of this problem in government policy circles and the government has tried to respond to this problem of quantity and quality of technical manpower in various ways. If she is successful in getting the numbers and quality right, the country will be on a firm footing to become an innovation power house in the future.