India an emerging 'knowledge' economy

One of the world's largest economies, India has made enormous strides in its economic and social development in the past two decades, but can do much more to leverage its strengths in today's knowledge-based global economy, a new World Bank report has said.

The report – 'India and the Knowledge Economy: Leveraging Strengths and Opportunities' - argued that when supported by government policy incentives, the country can increase its economic productivity and the well-being of its population by making more effective use of knowledge.

The report which acknowledged that the country already had many highly qualified people making their mark globally in science, engineering, information technology, and research and development, however, said that they represented only a small fraction of the total population.

Urging the improvement in quality of all institutions of higher learning and not just few selected ones, the report said, "India needs to make its education system more demand driven to meet the emerging needs of the economy and to keep its highly qualified people in the country."

Favouring private sector participation in higher education, it said bureaucratic hurdles were needed to be removed along with better accreditation for it to happen.

"Increased university-industry partner ships to translate research into applications can yield economic value," the report co-authored by Anuja Utz said.

Calling India a "relatively closed economy" compared to other Asian economies, the report said, "India should increasingly tap into the rapidly growing stock of global knowledge through channels such as foreign direct investment, technology licensing, and so on, so that it can catch up to countries like China, where reforms have moved a head much more rapidly".

The report also asked the government to promote the use of application and use of Information and Communication Technologies throughout the economy to raise productivity and growth.

"This requires increasing access to ICTs, such as widespread availability of telephones, including mobile phones, computers, and connectivity to the Internet; enhancing ICT literacy and skills among the population; and developing

ICT applications that can provide much-needed social, economic, and government services to citizens," it said.

World Bank Country Director for India, Michael Carter, said, "The report serves as an important bank input into the domestic consultation and reform process which will move India further into the global knowledge economy of the twenty-first century".