Should this news for a country that happens to be the largest benefactor from the World Bank Group come as a surprise? Well, before an element of surprise takes over, this is a revelation from none other than the World Bank itself. Further, it was stamped out by a report released by the Asian Development Bank, titled “Innovative Asia: Advancing the Knowledge-based Economy”, which was incidentally built on a World Bank Index. The report consolidates the Knowledge Economy Index for the Asia-Pacific region at 4.39 compared with 8.25 for OECD (Organisation for Economic Co-operation and Development) countries. With a paltry score of 3.06, India is ranked 110th among 145 countries.
This indeed is a dismal position considering India’s projection around the world as a ‘Knowledge’ hub, and a service-sector-based economy. But, the report has more surprises in store. What is colloquially called the “Jugaadu Technology”, or “JT” for short (This could transliterate into Frugal Technology) emerges as a strong parameter from within rural pockets to lend respectability to this particular position, the absence of which could have further slid the number on the chart. In other words, of the factors that build up the knowledge economy like economic incentive regime, innovation, education, and Information and Communications Technology (ICT), it is innovation that scores the highest.
Does this mean that the Government should rope in technological innovations or innovative technologies from rural pockets, especially at a time when the country is witnessing urbanisation at an unprecedented scale? One way to stop the rural diaspora could be this. But, what this index does point to is the low point of hinging on knowledge-based industries, and addressing it through mechanisms involving fixing of weak primary education, restrictive policies on labour, and general difficulty of doing business in India. But, what is the guarantee of Asian Development Bank refraining from guiding policies intended to set the equation straight? It is hardly envisaged that such a refrain is possible, for in terms of the Creative Productivity Index (CPI), India’s ranking is still dismal with a 14 out of 24 countries. With a low score, CPI calls for investments in physical infrastructure and human capital. This is proclaimed by the ADB and Economist Intelligence Unit. This, on the one hand contrasts growing urbanisation that the earlier report purported, but also emphasizes the need for fixing certain weak indicators that the earlier report highlighted. How does one balance this act?
Ironically, one attributable reason for low productivity has been cited as low yield in agriculture, and innovation needs to come in this sector. There goes the frugality of Frugal Technology. The other way out is by making robust the vast pool of skilled English-speaking graduates to augment the service sector. The ink is still wet on the paper of the report, when a likely disruption comes from what ADB considers a major hindrance in the form of high tariffs impeding trade. According to the report, “The limited trade diversification in terms of both a narrow export basket and geographic trade partners has constrained progress in international markets,” and this lack of translatability into a broader economic model is where international financial institutions could cash in with policy and project recommendations. If growth-led development model is the answer the centre is projecting, then grounds are already fertile for these IFIs to sow in. Nothing could be more away from this fact when Bindu Lohani, VP of Knowledge Management and Sustainable Development at ADB says, “As countries seek to innovate to avoid middle-income traps, all governments, especially those with limited resources, need to be sure that their investments boost both efficiency and productivity, benefitting economies and people, and move to a knowledge-based economy.”