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ROUNDTABLE
Case Study: Transforming India into a Knowledge Economy
Two Perspectives on How One Country Uses ICT
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Whether it is the growing export market or the burgeoning domestic market, India has made major advances in information and communication technologies (ICT). What steps did India take to transform into a knowledge economy? What can other developing countries learn from India’s experience?
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 What goals for India do you hope to achieve as chairperson of its Knowledge Commission? How are you ensuring that your objectives capture India’s social and cultural complexity? |
 Sam Pitroda: The underlying goal of the Knowledge Commission is to improve efficiency and productivity which will eventually lead to greater prosperity for the large number of people in India who are at the bottom of the pyramid. We are looking at knowledge from five different angles:
- Access to knowledge, for example, access and connectivity, right to information, affirmative action programs, and connecting academic institutions.
- Knowledge concepts, including primary and secondary education, universities, vocational training, e-learning, etc. Currently only 6-7 percent of Indians go to college. For a country of 1.2 billion people where we have 500 million people below the age of 25, this number is not good enough. We need to create more colleges, vocational training and distance learning programs so that 50 percent of our people can have some form of higher education after high school. We have good engineering and management programs but we need similar institutions for liberal arts education.
- Creation of knowledge: More research needs to be conducted in our universities. We are also looking at patents, trademarks, copyrights and other areas of intellectual property. We also have a lot of traditional knowledge in the country in areas like medicine and art. A lot of this knowledge is not documented and we would like to capture this.
- Application of knowledge in agriculture, health and industries: How are we packaging knowledge? Is knowledge being presented in a way that is useful for farmers?
- Knowledge services which relate to e-governance: A lot of our procedures and processes are left behind from British Raj. To some extent we have computerized these processes. Now we are starting to question the processes themselves. How do you open a bank account? How do you apply for admission in a school? How do you get a ration card? How do you get a land record? By focusing on access we are trying to capture the complexity that you described. To us knowledge is not about learning at universities. It covers the whole spectrum from traditional knowledge to getting a PhD. We want to make sure a large number of people have access to knowledge and that’s where ICT comes in. Today if you have access to the Internet in a little village in India, you can go and visit the Guggenheim Museum.
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| In the ICT arena, how has India managed to create an environment that is conducive to private sector investment? What can other developing countries learn from this experience? |
Kiran Karnik: The Indian IT industry has seen rapid growth over the past 6-8 years. Revenues from the industry have grown from USD $ 5 bn in 1997-98 (1.2 per cent of GDP) to over USD $28 bn in 2004-05 (4.1 per cent of GDP). Having identified ICT as a sunrise industry, the Indian government has taken many concrete steps to ensure an investment-friendly environment both at the center and at the state levels. Export promotion strategies, reform in overseas investment regulation, telecom deregulation, updating labor laws to facilitate 24X7 working environment and ensuring information security were some of the steps taken to stimulate investment. It would seem that the primary lessons for other developing countries are: to open the sector to local and international players with minimum barriers; to provide incentives to all players, particularly to compete in the global market; to invest in human resource development; and to generate competition in the telecom sector.
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Sam Pitroda: Most ICT success stories in India come from the private sector. This is due in part to the incentives provided for export and the strong private sector focus in India during the early days on software jobs abroad. Y2K gave us the momentum and now business outsourcing has taken off. A lot of large corporations are outsourcing their work to India and this has given a fair amount of confidence to the private sector. The public sector has contributed in strengthening infrastructure through various channels including research on high-performance computing at Centre for Development of Advanced Computing http://www.cdac.in/ (CDAC), development of telecom technology in defence, space labs, research in agriculture and medical. So far the private sector has become very visible in IT, but it is geared to take on other areas like the automotive industry and pharmaceuticals. So there is an awareness about integrating the Indian IT industry into the global market and a lot of that is happening.
Over 20 years ago, India decided to focus on IT, software and telecom. The Indian Institutes of Technology was set up with a clear understanding that engineering talent is needed to build institutions and infrastructure in the country. What we have learned from this is that it takes a long time and there are no shortcuts. You need to make investments in human capital and this process takes 20 years. You have to make investment in education. Indian parents spend a lot of time and money educating their children. Unfortunately the funnel is so narrow that only a few people have the opportunity to go to college. There is a lot of competition and that is where we have to really increase the base. |
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| What is the impact of global outsourcing on the rich-poor gap in India? How can the Indian government and businesses ensure that the benefits of outsourcing are dispersed more evenly instead of being concentrated in the hands of a few? |
Kiran Karnik: We have to look at this question both from the short term and the long The requested resource (/editor/default/) is not availableterm. While in the short term the direct benefits may be limited to a small group, in the long run the benefits from the IT industry would reach across the entire economic cross-section of the population. One of the most significant impacts of the IT industry and especially the outsourcing industry is on employment – both direct and indirect. It is estimated that there are over 1 million people directly employed in the industry, and approximately 1,150,000 indirect employment opportunities have been created in tertiary industries such as transport, catering, construction, hotels, security and housekeeping services, etc. This has in turn led to an increase in the disposable income in the hands of the young urban population leading to an increase in consumer demand. Interestingly, a great deal of the spin-off employment (e.g. in construction) is for people at the bottom rung of the socio-economic ladder. This has been an important and positive impact of the IT boom in India.
Internet and PC penetration along with better telecommunication infrastructure, has brought technology within reach of the Indian rural segment. This is expected to increase access to information that would directly affect the economic well-being of the rural population, improve access to education and healthcare facilities, empower women, etc.
The government and the corporate sector can work hand-in-hand to ensure that the benefits of ICT reach the poorest of the poor. The Indian government has recognized the far-reaching implications of IT and has established a “National e-Governance Action Plan (2003-07)”. Various e-governance projects have been taken up both at the central and state level aimed at improving the efficiency, responsiveness and accountability of government towards its citizens. NGOs and corporate houses are also involved in various IT projects that have had a positive impact on the lives of ordinary people. Examples include ITC’s e-choupal scheme, which links farmers to markets and supplies them weather information; Pondicherry’s Information Village implemented by the M.S. Swaminathan Research Foundation, wherein in each village there has a small community-owned and operated Village Knowledge Center. There are many such examples of projects in which ICT has contributed directly to the well-being of the disadvantaged and the poor. The challenge is to scale-up these success stories. NASSCOM itself has created a Foundation to promote this, and many others (including IT companies and, individually, their promoters) are also doing the same. | |
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 How did Development Gateway members respond to our Information
Society Survey questions?:
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- Nov
3, Fill-the-Gap!, Netherlands
- Nov 9-Nov 11, World Summit of Cities
and Local Authorities and the role Information Society, Spain
- Nov 10 -11, Libraries and the
Information Society in Action, Egypt
- Nov 13-15, Past, Present and Future of
Research in the Information Society
- Nov 16-18, World Summit on Information
Society, Tunisia
- Nov
17, Creating Transformations: Intel at WSIS, Tunisia
- Nov 28-Nov 30, IEEE International
Workshop on Wireless and Mobile Technologies in Education, Japan
- Nov 28 - Dec 5,
GKP/MSSRF South-South Exchange Traveling Workshop 2005, India
- May 25 – May 26, First
International Conference on Information and Communication Technologies and
Development, USA
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