December 1, 2012 1 Information Technology and its

Transcript:December 1, 2012 1 Information Technology and its:
December 1, 2012 1 Information Technology and its Role in India’s Economic Development: A Review Nirvikar Singh Department of Economics, University of California, Santa Cruz IGIDR Silver Jubilee International Conference on “Development: Successes and Challenges: Achieving Economic, Social and Sustainable Progress” December 1-3, 2012 December 1, 2012 2 Overview Introduction IT-BPO Industry Rural Development E-Commerce Manufacturing E-Governance Conclusions Introduction: Conceptual Issues Why Information Technology (IT)? Is IT special in theory? Or is IT just the dynamic sector of the times? IT in growth models As a sector amenable to developing dynamic comparative advantage IT as a General Purpose Technology (GPT) Pervasiveness Technological dynamism Innovational complementarities Complementarities: horizontal and vertical December 1, 2012 3 December 1, 2012 4 Conceptual Issues (contd.) IT and information Reduce transaction costs Improve market efficiency Improve government efficiency Improve intra-firm resource allocation IT and innovation Combinatorics and feedback loops Falling Costs of Computing (US$) December 1, 2012 5 IT-BPO Industry Industry components Software services and products Business process outsourcing IT enabled services Hardware The story so far Rapid growth Upgrading Diversification Positive spillovers December 1, 2012 6 IT-BPO Industry (contd.) Spillovers From software to BPO and ITES Into higher education National reputation Attitudes, goals and expectations Other sectors, e.g., manufacturing Individuals December 1, 2012 7 Rural Development Is IT a luxury? Not any more Rapid, long distance communications a necessity Of course nutrition, health, sanitation, housing, basic education are higher priorities IT can play an enabling role Reduce transaction costs Reduce production costs Improve allocative efficiency December 1, 2012 8 Rural Development (contd.) How well have Indian efforts worked? Digital mobile telephony for voice communications has done well Other efforts have been less successful Delivering Internet services to rural India is difficult precisely because rural India is under-developed Tightly focused corporate efforts have succeeded the best Small non-profit efforts require constant subsidies and cannot scale Hybrid efforts (public/private-for-profit/private-non-profit) have also not taken off Government efforts have had some impact, but suffer from incentive problems December 1, 2012 9 Rural Development (contd. 2) Challenges Scarcity of organizational and managerial skills Lack of physical infrastructure Government is simultaneously overbearing and inefficient Newness of market Limitations of existing software applications Opportunities Latent demand has been demonstrated Falling cost of technology hardware Scaling up to spread fixed costs December 1, 2012 10 December 1, 2012 11 E-Commerce B2B and B2C B2B is still very limited, restricted to larger firms B2C