Introduction

Every country or firm must have education and training in technology and science, even if the research is not on par with that being conducted elsewhere. Knowledge cannot be absorbed unless some knowledge is already possessed. Countries and firms must be open to new ideas, have multiple sources of new ideas, and see that ideas are diffused. This point strongly argues for freedom of entry, even when it seems to forgo economies of scale. (Arrow, 2000, p. 19) The knowledge economy in India seems to be approaching norms laid out by such Arrowian imperatives. Liberalization and globalization of the Indian economy is taking place when its economy is toddling on the two legs of the old and the new – the former characterized by lack of competition and lack of openness, and the latter exhibiting germinal openness, competitiveness and knowledge intensity. Undeniably in its transition to a knowledge economy, this new economy has received its support mostly from the markets of the OECD countries while its own home market has remained saddled with the old economy struggling for its existence. Diffusion of ICT (information and communication technology) in the home market has remained pitiably low. R& D intensity of manufacturing, often used as a surrogate for knowledge intensity of an economy, also puts India to shame when one compares statistics even with Chinese counterparts. Interfacing ICT usage with indigenous languages and with indigenous cultures has thus received very low attention. This has been compounded by one of the lowest levels of literacy, threatened further by cuts in public expenditure on higher education which has failed to achieve laurels internationally over the last couple of decades. The old economy syndrome had put nails in the coffin of local entrepreneurship.