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Information Technology as an Engine of Broad-Based Growth in India

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  • Nirvikar Singh

    (University of California, Santa Cruz)

Abstract

In this paper, we survey some of the developments in India’s IT sector, and prospects for broad-based growth led by this sector. We examine the IT sector, discussing the role of software versus hardware, the growth pattern of the software industry and software exports, and the potential problems in IT labor supply to support future growth. We focus on a current bottleneck for the IT sector, namely the telecommunications infrastructure. Issues considered include the basic driver of technological convergence across voice and data communications, problems with current infrastructure, innovations that have the potential to dramatically alter the economics of access to telecoms, and the evolving structure of the telecoms industry. We also examine the policy environment more closely, arguing that government policy is better focused on removing labor market distortions and infrastructure constraints, rather than providing output or export subsidies to the software industry. We discuss the appropriateness of specific policy goals such as universal access, as well as issues of implementation of more general objectives of broader telecoms access. Finally, we map out the possibilities for broad-based IT-led growth, including increasing value-added, using better telecom links to capture more benefits domestically through offshore development for industrial country firms, greater spillovers to the local economy, broadening the IT industry with production of telecom access devices, improving the functioning of the economy through a more extensive and denser communications network, and improving governance.

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File URL: http://128.118.178.162/eps/dev/papers/0412/0412012.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0412012.

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Length: 45 pages
Date of creation: 10 Dec 2004
Date of revision:
Handle: RePEc:wpa:wuwpdc:0412012

Note: Type of Document - pdf; pages: 45
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Web page: http://128.118.178.162

Related research

Keywords: information technology; software; complementarities; telecommunications;

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References

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  1. Abhijit Banerjee & Esther Duflo, 1999. "Reputation Effects and the Limits of Contracting: A Study of the Indian Software Industry," Working papers 99-14, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
  3. Rivera-Batiz, Luis A. & Romer, Paul M., 1991. "International trade with endogenous technological change," European Economic Review, Elsevier, vol. 35(4), pages 971-1001, May.
  4. Arora, Ashish & Arunachalam, V. S. & Asundi, Jai & Fernandes, Ronald, 2001. "The Indian software services industry," Research Policy, Elsevier, vol. 30(8), pages 1267-1287, October.
  5. Pohjola, M., 1998. "Information Technology and Economic Development: An Introduction to the Research Issues," Research Paper 153, World Institute for Development Economics Research.
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Cited by:
  1. Kala Seetharam Sridhar & Varadharajan Sridhar, 2009. "Telecommunications Infrastructure and Economic Growth: Evidence from Developing Countries," Working Papers id:2247, eSocialSciences.
  2. Singh, Nirvikar, 2006. "Services-Led Industrialization in India: Assessment and Lessons," Santa Cruz Department of Economics, Working Paper Series qt8jn2b8z6, Department of Economics, UC Santa Cruz.
  3. Singh, Nirvikar, 2004. "Transaction Costs, Information Technology and Development," Santa Cruz Center for International Economics, Working Paper Series qt3wq7n6nq, Center for International Economics, UC Santa Cruz.
  4. Singh, Nirvikar, 2006. "ICTs and rural development in India," MPRA Paper 1274, University Library of Munich, Germany.
  5. Chakraborty, Suparna, 2008. "Indian Economic Growth: Lessons for the Emerging Economies," Working Paper Series RP2008/67, World Institute for Development Economic Research (UNU-WIDER).
  6. Sridhar, Kala Seetharan & Sridhar, Varadharajan, 2007. "Telecommunications Infrastructure And Economic Growth: Evidence From Developing Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(2), pages 37-56.
  7. John Bailey Jones & Sohini Sahu, 2008. "Transition Accounting for India in a Multi-Sector Dynamic General Equilibrium Model," Discussion Papers 08-03, University at Albany, SUNY, Department of Economics.

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