While the late US President Ronald Reagan presented the country’s first trillion-dollar budget in the 1980s, India is now a $3-trillion economy. So we are catching up. Development economics proclaims that convergence occurs for the developing world because they do not have to reinvent the wheel to speed up economic growth: the innovations from the developed world already exist to emulate from. There are several examples of this from the developed world to India.
The internet is the first of those technological innovations which originated in the US in the 1970s. As we all know, technology and the internet greatly reduce the transaction costs of conducting business, which in turn improves productivity and efficiency. The internet became accessible in India in the mid-1990s.
The internet was followed by the mobile phone, with which the developing economies leapfrogged as a quick and inexpensive way of increasing telecom penetration, given landline penetration continued to be low in many developing countries as late as the 1990s. The mobile phone has greatly facilitated exchange of information and interaction even while on the move.
In a study, the authors have found that mobile phones contribute positively to the national output of developing countries, being on average 2.48 per cent, allowing for country-specific effects. Mobile phone penetration in the developing countries of our sample started increasing rapidly during the second half of the 1990s due to changes in telecom regulation and moved to competitive market structures everywhere in the developing world.
Most of these developing countries leapfrogged into second-generation mobile cellular systems, thereby bypassing the first-generation analogue cellular systems, deploying them at a much higher rate compared to landline installations. India has now deployed 5G, barely two years after it was in other developed countries.
The convergence of digital technologies (such as mobile, internet access), by which telecom service providers are also offering broadband services now, has enabled new business platforms. This is rapidly changing the way in which technology-enabled services are being provided.
Last but not the least, toll free numbers were introduced by the US (AT&T) first in 1966. This has also come to India, where businesses find the need to connect with customers all over the world. As is clear, with toll free service, customers who call do not pay, but the business, which is being called, pays for the same. This has greatly increased the competitiveness of businesses in India, as with those around the world.
While these technologies are being emulated from their deployment in advanced countries, of late we have developed certain indigenous technologies and inventions that are being emulated by other countries (enabling their convergence to higher incomes and economic growth). The notable one developed in India is the Unified Payment Interface (UPI) developed by the National Payment Corporation of India, as the standardised interface for digital payments across different types of payment instruments and entities.
The foundational digital ID system Aadhaar, that has covered almost all the Indian residents, is also a case in point for its large scale deployment. Further, the indigenous 5G mobile protocol stacks being developed in India showcase our software development capability. Covid has demonstrated our innovation in vaccine development, along with manufacturing and distribution at scale.
While we have been making significant strides in engineering, technology and, to some extent, pharmaceuticals and medicine, in reinventing the wheel, social science research needs further attention for emulation, to enable greater and faster convergence. In this context, it is useful to note that a National Research Foundation is being established for the first time in the country, to strengthen the governance structure of the research-related institutions and to improve linkages between R&D, academia, and industry.
As India joins the league of middle-income nations it needs to leapfrog much more into social science research than in the areas of science and technology research to enable further convergence. Even with its traditional emphasis on evidence-based research in the social sciences, we note the US allows a number of exceptions for STEM (Science, Technology, Engineering and Math) in H-1B visas and Optional Practical Training, which President Obama increased from one year to three years for foreign students in the US.
But who should worry about the applications of STEM to policy? Neither managers nor engineers. We need social scientists who understand the implications of STEM for the society and economy, and help evidence-based policy-making in the country. Since the policy steps affect millions, the STEM-based solutions need to be critically reviewed by social scientists for their suitability. There have been policies based on pure technology-based solutions, which often lead to digital divide and exclusions. So even for technology policy to be more inclusive and equitable, robust socio-economic assessment of technology interventions are needed.
Thankfully, we already have the Indian Council of Social Science Research providing funding to promising social science research proposals. More funding is needed for this. There are several international funding agencies such as the Bill and Melinda Gates Foundation (of the US), the Ford Foundation (US), International Development Research Centre (Canada), Economic and Social Research Council (UK), and so on. But we need more indigenous funding for social science research.
One hopes India’s National Research Foundation will bring about this much-needed change in the higher education landscape, and support policy relevant social science research.
The writers are professors, Institute for Social and Economic Change, and International Institute of Information Technology, respectively