Making India an ICT Powerhouse: The role of Innovation System
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Transcript of Making India an ICT Powerhouse: The role of Innovation System
K J Joseph BRICS workshop Rio 25-27 April 07
Making India an ICT Powerhouse:The role of Innovation System
K J JosephCentre for Development Studies
Trivandrum, Kerala, India
K J Joseph BRICS workshop Rio 25-27 April 07
How do we proceed
India’s unmatched ICT credentials
Innovation system and India’s IT development
The weak links
K J Joseph BRICS workshop Rio 25-27 April 07
India’s unmatched ICT credentials: Some indicators
K J Joseph BRICS workshop Rio 25-27 April 07
India: Aimed at hardware, gained in software (export $mill)
Year Software Share (%)Electronics HardwareShare (%) Total1985-86 27.79 22.01 98.51 77.99 126.31990-91 111.47 21.5 406.97 78.5 518.441995-96 702.55 53.74 604.79 46.26 1307.332000-01 5910.11 85.32 1016.54 14.68 6926.652005-06 23243.24 92.39 1914.41 7.61 25157.66
K J Joseph BRICS workshop Rio 25-27 April 07
India: Aimed at hardware, gained in software (the trend)
Share of Software and Hardware in IT Exports
0102030405060708090
100
Year
Software
Hardware
K J Joseph BRICS workshop Rio 25-27 April 07
IT and the Economy
0
5
10
15
20
25
30
35
40
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06E
Year
IT O
utp
ut
0
1
2
3
4
5
6
Sh
are
of
Nat
ion
al G
DP
IT Output
Share of NationalGDP(%)
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IT and the Economy (Employment)Year IT,Engineering and R&D, Software
Products ExportsIT-enabled services Exports
Domestic sector
Total
1999-00 110000 42000 132000 284000
2000-01 162000 70000 198114 430114
2001-02 170000 106000 246250 522250
20002-03 205000 180000 285000 670000
2003-04E 296000 216000 318000 830000
2004-05E 390000 316000 352000 1058000
2005-06E 513000 409000 365000 1287000
*:Does not include employee numbers relating to the hardware sector
Quated in:NASSCOM Strategic Review 2006,Page 145
K J Joseph BRICS workshop Rio 25-27 April 07
Shift from onsite to offshore
0
20
40
60
80
100
120
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05*
Offshore
Onsite
K J Joseph BRICS workshop Rio 25-27 April 07
Moving up and down the value chain?
Moving up??…. Increasing presence in SW products &
embedded Software Expanding Supply Base Growing range of domain expertise and
applications Increasing presence in knowledge processing - Moving down?? Higher growth in BPOs & ITEs
Geographical Diversification Broad based development High employment intensity
K J Joseph BRICS workshop Rio 25-27 April 07
International Quality Accreditations
Description No. of Firms
ISO 9001 330
ISO 9002 23
ISO 9001/9002 345
ISO 9001:2000 72
SEI CMM Level 5 82
SEI CMM Level 2,3,4 41
CMMi Level 5 32
CMMi Level 2,3,4 14
PCMM Level 5 13
PCMM Level 2,3,4 11
Six Sigma 44
Others 41
Total 401
K J Joseph BRICS workshop Rio 25-27 April 07
Innovation System and India’s ICT Development
K J Joseph BRICS workshop Rio 25-27 April 07
Innovation System and India’s IT Development
Institutions Bhabha Committee of 1963, Electronics
Committee 1966 Department of Electronics (1970) Electronics Commission 1971 National Conference -potential of software
exports - Manpower and Infrastructure Setting up of SEEPZ and liberal trade and
investment policies
K J Joseph BRICS workshop Rio 25-27 April 07
Innovation System and India’s IT Development
Computer Policy 1984 Computer Software Policy (1986) Further Policy reforms in 1990s including tax
exemptions Setting up of Software Technology Parks Initiatives by the regional governments National Taskforce on IT and Software (1998) Policy Reforms in the Telecom Sector
National Telecom Policy in 1994 Telecom Regulatory Act of 1997 (TRAI) New Telecom Policy of March 1999
K J Joseph BRICS workshop Rio 25-27 April 07
Innovation System and India’s IT Development
Interventions towards developing manpower ICT
Manpower development has been the key component of different S&T policies
But there were certain specific initiatives for the IT and software sector
National Conference - M Tech Program in IITs Rajaram Committee (1978) – MCA Program and
Expansion of Mtech Early 1980s’ Private sector entry to IT Training Sampath Committee (1985) More Active role
by DoE DoE accreditation with AICTE
K J Joseph BRICS workshop Rio 25-27 April 07
Innovation System and India’s IT Development
R&D Capability Building R&D activity in software at different
institutions such as TIFR, IITs, IISc, select universities by DoE
National Centre for Software Technology (NCST), set up in Bombay in 1984, instrumental for development of internet in the country
C-DAC in Advanced Computing Various ER&DC spread across the country Patterns of Spatial Agglomeration of IT sector
K J Joseph BRICS workshop Rio 25-27 April 07
Innovation System and India’s IT Development
Demand creation Procurement policies and other
promotional measures Railway computerization Bank automation Financial support: The role of
EXIM bank of India Venture capital
K J Joseph BRICS workshop Rio 25-27 April 07
Innovation System and India’s IT Development
Firms Skewed and long tailed distribution Home grown success with limited
role for foreign firms But in hardware- foreign firms
Industry associations Addressing Software piracy Projecting India’s Image Nasscom’s role in getting the visa rules
relaxed by the developed countries …..
K J Joseph BRICS workshop Rio 25-27 April 07
The Weak links
K J Joseph BRICS workshop Rio 25-27 April 07
Weak/absence of Networks
Networks integrate complementarities in knowledge, capabilities, and specialization
Hardly any interaction between firms
Interaction with other actors like university is at a very low level
BUT
K J Joseph BRICS workshop Rio 25-27 April 07
Strong networking with foreign firms: (outsourcing & mergers)
Sectoral Composition of M&As in Indian Companies
2000 2001 2002 2003 Total
2000-03 Percent
Primary 2 2 5 9 7.6
Industry 7 3 9 15 34 28.6
Services of which: 28 18 10 20 76 63.9
Software 23 17 9 18 67 56.3
Total 35 23 21 40 119 100
K J Joseph BRICS workshop Rio 25-27 April 07
Demand: weak interface with the domestic market
ICT and Poverty Large number of projects But multiplicity of actors Lack of coordination and Failure to exploit synergies Failure to move beyond pilot stage (role of innovation system not being
appreciated)
K J Joseph BRICS workshop Rio 25-27 April 07
Demand : ICT diffusion
Teledensity in Rural and Urban Areas of India
0.43 0.52 0.68 0.93 1.21 1.49 1.55 1.74
5.78 6.878.23
10.3712.2
14.32
20.79
26.2
0
5
10
15
20
25
30
1998 1999 2000 2001 2002 2003 2004 2005
Rural
Urban
K J Joseph BRICS workshop Rio 25-27 April 07
Demand: IT investment in the Mfg sector (share in fixed investment)
0
0.2
0.4
0.6
0.8
1
1.2
Sh
are (
Percen
tag
e)
Industry
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ICT boom and other Sectors:Competition for skilled manpower?
Performance of Sectors Competing for Skilled Manpower in Karnataka
0
5
10
15
20
25
3082
-83
83-8
4
84-8
5
85-8
6
86-8
7
87-8
8
88-8
9
89-9
0
90-9
1
91-9
2
92-9
3
93-9
4
94-9
5
95-9
6
96-9
7
97-9
8
98-9
9
99-0
0
Capital Share Employee Share output Share
K J Joseph BRICS workshop Rio 25-27 April 07
In the context of BRICS
ICT solutions addressing southern issues Unlike earlier GPTs substantial capability exist in the
South in case of ICTs CorDECT Wirless in Local Loop Technology Developed
in India by the Indian Institute of Technology Chennai • Hardware innovations, like simputer are highly
relevant in addressing the issues of affordability and illiteracy faced by developing countries
• The developments in the Free/ Open Source Software (FOSS)
• Need for bringing together BRICS to achieve scale and minimize risk
• An E-BRICS Framework Agreement???
K J Joseph BRICS workshop Rio 25-27 April 07
Thank You Very Much