Literature Review On Indias technological capability: An analysis of its achievements and limits-Asokh V Desai

Submitted by, Manu V Thampy 2010 CET 3047

Introduction
Indigenous Technological Capability

[ITC] Feasibility of ITC in Indian perspective is discussed Performance criteria of ITC is considered as they reduce complexities and discussable. Studies regarding ITC are basically Probabilistic.

Indicators Of ITC
Generally there are four types of technological

capabilities to be distinguished: Purchase of technology Plant operation Duplication and Expansion Innovation and Technical Improvement These indicators are helpful in interpreting inter-industry differences observed in India as well as differences between India and other countries.

Purchase Of Technology
It includes price, terms, quality of technology as

judged by its operation, costs and quality of products. Indian buyers have the ability to sort out the suppliers based on the market positions of suppliers and most of them have previous familiarity with the product. Major issues is the lack of ability to attract technological suppliers. Choices opened to the technological buyers are also limited. Smallness of Indian markets add to it which can be tackled by technical competence (most reliable for investments under 5 lakhs).

 In order to adopt Major technology, licensing and

market sharing arrangements have to be done. It includes technology generation ( R & D ) and trading of minor technical improvements which includes cross licensing and patent leasing. Usually there are two strategies which are not mutually exclusive like setting up independent R & D wing or carrying out export operations within the frame work of multinational licensees. Technical competence is necessary for the stable export markets especially for industrial products,

Plant Operation
It includes productivity of inputs, quality of product. Imported technology has to be adapted well & the

best means is scaling down of plant. Scaling down depends on the degree of integration of plant. In case of Modular industries (chiefly Engineering industries), product designs are imported and small scale production technology is adopted with less automatic machines and manual machines. For an engineering firm, the prime objective is to save their own capital. The extensive trade in components have their own efects.

 It increased the capacity utilisation of component

manufactures and saved capital and encouraged the specialised small scale industries thereby diversifying their design pattern. Technology transfer in India has encountered a set back due to their failure to adapt processes to Indian raw materials. The supplier of the technology has little interest in adapting their industry to Indian materials so that burden is being transferred to Indian buyers. ITC helps in adopting certain elements from earlier generation of technologies suited to a transitional stage in Indias industrialisation.

Expansion
It includes unassisted expansion or duplication of

plant, transfer of concomitant technology. While building a plant, a firm has to set up a skeletal organisation to adopt further modifications in future. Items that can be imported and those which can be brought within the country has to be determined. Expansion and modification is a necessity for the Indian firms as Indian technology is quite Noncompetitive in terms of cost over-runs.

 Indian Industries have more number of

subsidiaries and joint ventures than technology exports and they are focussed on producing cheap and sturdy machinery such as textile, sugar, paper industry etc. Indian equity capital acted as a guarantee of performance of Indian equipment. The successful adaptation of the engineering industry to the Indian market is the basis for successful duplication and expansion in selected industries.

Technology Improvement & Innovation

It includes modification of received technology,

marketable products or process innovations. Technical progress denotes growth in output in general terms. It can be considered as growth in the productivity of an index of capital and labour. Rise in the capital-output ratio with a declining employment opportunities has been the main issue. The technology development in India is mainly import-dependent and small scale plants imported are more labour intensive.

 This slow growth is attributed partially due to the

unregistered firms as they escape from registration fees, licensing fee and taxes . Due to their growth, official industrial statistics have become increasingly unrepresentative. Indian plants often doesnt employ imported managerial expertise so that procedures have to be evolved and practices followed has been inadequate. Other factors affecting capital-output ratio is rise in the relative price of capital goods and progressive import substitution. Capital-output ratio is significant in integrated industries where large plants predominate and number of plants built is small.

Conclusion
Technological capacity of India is very unevenly distributed

across the industries. They offer products and services and also sets up plants for making them. The balance of cost and benefits depends upon the number of plants that the Indian market could support. For those industries in which number of plant required to meet domestic demand was small (steel, fertiliser etc), Indian plants were costly and unreliable as they experienced technological regression. Occasional innovation was part and parcel of the industries in which number of plants were large say sugar, textile industry. Technological capability of the engineering industries depends on its scale of output and also depends on the operational efficiency of the equipment using in the industry.