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Literature Review On Indias technological

capability: An analysis

of its achievements and limits-Asokh V Desai

Submitted by,Manu V Thampy

2010 CET 3047

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Introduction

Indigenous Technological Capability[ITC]

Feasibility of ITC in Indian perspective is

discussed Performance criteria of ITC is

considered as they reduce complexitiesand discussable.

Studies regarding ITC are basicallyProbabilistic.

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Indicators Of ITC Generally there are four types of technological

capabilities to be distinguished:

Purchase of technology

Plant operationDuplication and Expansion

Innovation and Technical Improvement

These indicators are helpful in

interpreting inter-industry differences observed inIndia as well as differences between India andother countries.

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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 suppliersbased on the market positions of suppliers and mostof them have previous familiarity with the product.

Major issues is the lack of ability to attracttechnological suppliers.

Choices opened to the technological buyers are alsolimited.

Smallness of Indian markets add to it which can betackled by technical competence (most reliable forinvestments under 5 lakhs).

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In order to adopt Major technology, licensing andmarket sharing arrangements have to be done.

It includes technology generation ( R & D ) andtrading of minor technical improvements which

includes cross licensing and patent leasing. Usually there are two strategies which are not

mutually exclusive like setting up independentR & 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,

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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 ofplant.

In case of Modular industries (chiefly Engineeringindustries), product designs are imported and smallscale production technology is adopted with lessautomatic machines and manual machines.

For an engineering firm, the prime objective is to save

their own capital. The extensive trade in componentshave their own efects.

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It increased the capacity utilisation of componentmanufactures and saved capital and encouraged thespecialised small scale industries thereby diversifyingtheir design pattern.

Technology transfer in India has encountered a set

back due to their failure to adapt processes to Indianraw materials.

The supplier of the technology has little interest inadapting their industry to Indian materials so thatburden is being transferred to Indian buyers.

ITC helps in adopting certain elements from earliergeneration of technologies suited to a transitionalstage in Indias industrialisation.

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Expansion It includes unassisted expansion or duplication of

plant, transfer of concomitant technology.

While building a plant, a firm has to set up askeletal organisation to adopt further

modifications in future. Items that can be imported and those which can

be brought within the country has to bedetermined.

Expansion and modification is a necessity for theIndian firms as Indian technology is quite Non-competitive in terms of cost over-runs.

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Indian Industries have more number ofsubsidiaries and joint ventures than technologyexports and they are focussed on producingcheap 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 forsuccessful duplication and expansion in selectedindustries.

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Technology Improvement &Innovation

It includes modification of received technology,marketable products or process innovations.

Technical progress denotes growth in output ingeneral 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 mainissue.

The technology development in India is mainlyimport-dependent and small scale plantsimported are more labour intensive.

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Conclusion Technological capacity of India is very unevenly distributedacross 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 ofplants 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 plantswere costly and unreliable as they experienced technologicalregression.

Occasional innovation was part and parcel of the industries inwhich 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 operationalefficiency of the equipment using in the industry.