Knowledge Economy in India – UPSC GS3

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Examples of India’s Knowledge Prowess in recent times:
  • ISRO launches many satellites of foreign countries.
  • India exported COVID-19 vaccines to many countries.
Examples of India’s Knowledge Prowess in past:
  • Students from across Asia and Africa sought admission to Indian universities for post-graduate courses.
  • Indian expertise was sought by global organisations such as the FAO, UNIDO, etc.
  • The government of South Korea even sent its economists to the Indian Planning Commission till the early 1960s. They got their training in long-term planning.
  • Rail India Technical and Economic Services (RITES), had acquired a global profile with business in Africa and Asia.
  • The development of India’s dairy and livestock economy also attracted global interest.
What is the reason behind the success of pharma and space sectors?
  • Sustained state support: India’s current knowledge economy leadership in space and pharmaceuticals is due to 50 years of sustained state support.
    • It was Prime Minister Indira Gandhi who authorised the creation of ISRO in 1972.
    • Again, it was her decision to enact the Indian Patents Act, 1970. The Act facilitated the growth of the domestic pharmaceuticals sector.
    • Subsequent governments have all contributed to the development of both industries.
  • The credit to Indian engineering, scientific and technological talent. There is large scale development of educational institutions throughout India. This made Indian students pursuing world-class standards at a fraction of the cost compared to developed countries.
  • It has to be noted that these two sectors were successful even when the western countries created constraints for indigenous technology development. For instance,
    • Unilateral sanctions were imposed by the US to deny Indian industry access to technology and markets.
    • A multilateral regime for intellectual property rights (IPRs) protection was created, under the patronage of the World Trade Organisation.
    • Even today, many developed countries oppose India’s Compulsory Licence of medicines.
Why India lost its leadership in the Knowledge Economy in other sectors?
Irrespective of the dominant position during the 1950s, India lost its leadership in the production of the knowledge economy. The reasons are,
  • Flight of Indian talent to other developed countries. It had accelerated since the 1970s and has sharply increased in recent years.
  • China has emerged as a major competitor offering equally good S&T products and services at a lower cost.
  • The appeal of higher education in India for overseas students has decreased. This is the biggest setback for India trying to become the powerhouse of the knowledge economy. This is because of two reasons:
    • The quality of education offered in most institutions is not up to date. The education institutes in India still teach old technologies instead of new ones.
    • The social environment offered in India is no longer as cosmopolitan as it used to be. There is a significant growth in the narrow-minded ideologies in India.
The success of the ISRO and Pharma sector is a tribute to public policy, government support, private sector involvement and middle-class talent. This has to spread across the sector to regain India as the leader of the Knowledge Economy.
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