Relevance: GS-3 :Government policies and interventions for development in various sectors and issues arising out of their design and implementation; Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment; Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.Achievements of Indians in science & technology; indigenization of technology and developing new technology.

Key Phrases: Indian-born techies, technology giant, information technology, market-driven growth opportunities, new generation technologies, technological capabilities, state-owned enterprises, strategically important sectors, demand and supply factors, STEM programmes, localise production, strategic and knowledge asset.

Why in News?

• Recurrent news of India-born techies becoming leaders of technology giant, begs the question, Why is India still not a major player in technology?

Causes:

• Although the growth of sectors like information technology and pharmaceutical industries has been one of the fastest in Bengaluru and Hyderabad.
• Despite that the talented left the country in droves for the developed economies like U.S.,
  • As of 2019, there were 2.7 million Indian immigrants in the U.S.
  • They are among the most educated and professionally accomplished communities in that country.
• The roadblocks to progress have been many, including India’s poor achievements in school education.
• India’s failures have also been linked to its inability to make use of the market-driven growth opportunities.
• In 1991, when India embraced markets and globalisation, it should have redoubled efforts to strengthen its technological capabilities.
• Instead, the spending on research and development as a proportion of GDP declined in India from 0.85% in 1990-91 to 0.65% in 2018.
• In contrast, this proportion increased over the years in China and South Korea to reach 2.1% and 4.5%, respectively, by 2018.

Role of State:

• In United States, the state has been crucial to the introduction of the new generation of technologies, including the computers, the Internet, and the nanotech industry.
  • Public sector funding developed the algorithm that eventually led to Google’s success and helped discover the molecular antibodies that provided the foundation for biotechnology.
  • The governmental agencies were proactive in identifying and supporting the more uncertain phases of the research, which a risk-averse private sector would not have entered into.
• The role of the government has been even more prominent in shaping the economic growth of China.
  • Shunning its image as a low-wage manufacturer, China as part of a 2011 government plan, has made successful forays into ‘new strategic industries’ such as alternative fuel cars and renewable energy.
  • China’s achievements lies in the combined strengths of the public sector, markets and globalisation.
  • China’s state-owned enterprises (SOEs) which were seen as inefficient and bureaucratic, were restructured by the state.
  • The state retreated from light manufacturing and export-oriented sectors, leaving the field open for the private sector.
  • SOEs strengthened their presence in strategically important sectors such as petrochemicals and telecommunication as well as in technologically dynamic industries such as electronics and machinery.
• When India inaugurated planning and industrialisation in the early 1950s, public sector funding of the latest technologies of the time including space and atomic research and the establishment of institutions such as the Indian Institutes of Technology (IITs) were among the hallmarks of that effort.
  • Many of these institutions have over the years attained world-class standards.

Road Ahead:

• India still possesses favourable supply and demand factors that can propel it into the frontlines of technology.
  • The number of persons enrolled for tertiary education in India (35.2 million in 2019) is way ahead of the corresponding numbers in all other countries except China.
  • Further, graduates from STEM (Science, Technology, Engineering and Mathematics) programmes as a proportion of all graduates was 32.2% for India in 2019, one of the highest among all countries (UNESCO data).
• India needs to sharply increase its public spending to improve the quality of and access to higher education.
  • An overwhelming proportion of tertiary students in India are enrolled in private institutions: it was 60% for those enrolled for a bachelor’s degree in 2017, while the average for G20 countries was 33%, according to OECD.
• India will soon have twice the number of Internet users as in the U.S., and hence is a large market for all kinds of new technologies presenting a huge opportunity.
• However, the domestic industry has not yet managed to derive the benefits.
• For instance, the country is operating far below its potential in electronic manufacturing.
  • Electronic goods and components are the second largest item, after oil, in India’s import bill.
  • The country’s imports are almost five times its exports in this industry (based on 2020-21 data).
  • High-value electronic components needed in the manufacture of, say, mobile phones are technology and design-intensive.
  • Big multinational companies control these technologies and corner the bulk of the revenues.
• In comparison, China has used its large market size as a bargaining chip in negotiations with the foreign firms: stay in our markets only if you localise production and share technologies with the local firms.
• Meanwhile, there have been aggressive efforts to enhance China’s own technological strengths through its research institutions and SOEs.

Way Forward:

• The ‘Make in India’ initiative will have to go beyond increasing the ‘ease of business’ for private industry.
  • Indian industry needs to deepen and broaden its technological capabilities.
  • This will happen only if universities and public institutions in the country are strengthened and emboldened to enter areas of technology development for which the private sector may have neither the resources nor the patience.
• In this light, PSUs needs to be valued for their potential long-term contributions to economic growth, the technologies they can create, and the strategic and knowledge assets they can build.
• A strengthened public sector will create more opportunities for private businesses and widen the entrepreneurial base.
• Small and medium entrepreneurs will flourish when there are mechanisms for the diffusion of publicly created technologies, along with greater availability of bank credit and other forms of assistance.

Conclusion:

• India has the potential to occupy the upper echelons of the global technology ladder if only it identifies its shortcomings and acts upon them urgently. The next big story about Indian prowess does not have to be from the U.S., but could come from thousands of such entrepreneurs in far-flung corners of the country.

Source: The Hindu

Mains Question:

Q. India has the potential to occupy the upper echelons of the global technology ladder if only it identifies its shortcomings and acts upon them urgently. Comment. (250 Words).