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Notes on tech

Notes on technology, business, enterpreneurship, economy, markets along with interesting general tidbits.


Notes on India and the Knowledge Economy

7/06/2005 06:30:00 PM, posted by anand

Here are some of my scribbled notes from a World Bank presentation on "India and the Knowledge Economy - Leveraging Strengths and Opportunities".

The Four Pillars of the Knowledge Economy (KE):
- Economic and Institutional Regime
- Education and Training
- Innovation System
- Information Infrastructure

Growth rate
1950 - 1970: 3.5%
1980s : 5.5%
6.7% between 1992- 1997, as a result of 1991 reforms and opening up of the economy to more global competition
5.5% from 1997 - 02
4.4 percent in 2002 - 03, due to the impact of poor rains on agriculture
8.2% in 2003 - 04 thanks to lavish monsoon.

China growth rate - 9.8% from 1991 - 2003

India: with 17% of the world’s people, it accounts for less than 2% of global GDP and 1% of world trade.

In terms of Purchasing Power Parity, India is 4th largest economy

Share of global merchandise exports:
started around 2% in 1960, went down to less than 1% in 1977 to almost 6% in 2003

Why focus on knowledge strategies
- advanced countries are at the forefront of creating and using that knowledge. Developing countries have limited means of taking advantage of whats already in place.

FDI: India received $4.26 billion in 2003, compared to $53.5 billion in China

India: entrepreneurs have to go through 11 steps to launch a business and takes an average of 89 days; China: 12 permits, but half the time (41 days)

Private sector views "Regulations and Corruption" as the biggest obstacle to growth.

Availability of venture capital is low, but VC market is emerging: VC increased from $3 million in 1995 to $342 million in 2000.

India is weak in tapping global knowledge.

Emerging as a major global R&D platform: about 100 MNCshave set up R&D centers in the country.

Landline phones: 46.30/1000
Mobile phones: 24.70/1000
Computers: 7.20/1000
TV: 83/1000

- India has made several-fold increase in ICT penetration ratios in absolute terms(fixed line telephones, mobile telephones, computers, and Internet users),
- But, in relative terms, India maintained position in telephones (fixed plus mobile), made progress in computers, but fell behind in Internet users, while the world as a whole made much more significant improvement in all indicators!
- as rajesh jain puts it, we have to tackle non-consumption

47 million people had mobile phones at end of 2004!
- IT market grew to $19.9 billion in 2003–04 or 3.82% of India’s GDP; provides employment for 1 million people.

Infosys ranked 9thmost respected company in the world in 2004 (HP, IBM, Dell, MS, SAP, Cisco, Intel and Oracle). In chip design, Intel and TI using India as an R&D hub for microprocessors and multimedia chips.

Steps to strengthen ICT:
Provide suitable incentives to promote IT applications for the domestic economy, including local language content and applications.

Merchandise and service exports in 2002 (billions):

China: 325.59 (merchandise) - 39.74 (service)
India: 49.31 (merchandise) - 24.86 (service)
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