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

Author

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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.

Suggested Citation

  • Nirvikar Singh, 2004. "Information Technology as an Engine of Broad-Based Growth in India," Development and Comp Systems 0412012, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0412012
    Note: Type of Document - pdf; pages: 45
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    File URL: http://econwpa.repec.org/eps/dev/papers/0412/0412012.pdf
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Pohjola, M., 1998. "Information Technology and Economic Development: An Introduction to the Research Issues," Research Paper 153, World Institute for Development Economics Research.
    4. Luis A. Rivera-Batiz & Paul M. Romer, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 531-555.
    5. Abhijit V. Banerjee & Esther Duflo, 2000. "Reputation Effects and the Limits of Contracting: A Study of the Indian Software Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 989-1017.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Singh, Nirvikar, 2006. "ICTs and rural development in India," MPRA Paper 1274, University Library of Munich, Germany.
    2. Chakraborty, Suparna, 2008. "Indian Economic Growth: Lessons for the Emerging Economies," WIDER Working Paper Series 067, World Institute for Development Economic Research (UNU-WIDER).
    3. Nirvikar Singh, 2008. "Transaction costs, information technology and development," Indian Growth and Development Review, Emerald Group Publishing, vol. 1(2), pages 212-236, September.
    4. 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.
    5. Singh, Nirvikar, 2006. "Services-led industrialization in India: Assessment and lessons," MPRA Paper 1276, University Library of Munich, Germany.
    6. John Bailey Jones & Sohini Sahu, 2017. "Transition accounting for India in a multi-sector dynamic general equilibrium model," Economic Change and Restructuring, Springer, vol. 50(4), pages 299-339, November.

    More about this item

    Keywords

    information technology; software; complementarities; telecommunications;

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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