An essential component of comprehensive national power, especially for major countries like India, is technological power. However, India lags far behind countries like South Korea, Israel and now even China. This is evident from the composition of our exports to the major economies, with high-tech products composing only a small proportion of the total. But the starkest proof lies in the fact that India continues to import 70 per cent of its defence requirements 63 years after Independence.
It should be evident that India needs to acquire high-tech capabilities if it wants to play a role commensurate with its size and potential on the international stage and sustain productive strategic alliances with its partners. India has made advances in some sectors like remote sensing, information technology (IT), automotive components, pharmaceuticals and shipbuilding. However, a bigger push needs to be given to the process of indigenisation of high technology and therefore a radical overhaul in the conceptual approach as well as implementation strategy is required.
India needs to move away from compartmentalised paradigms to one which encompasses civil and military integration, utilising the “spin-on” effects of an upgraded civilian economy for the defence production sector. Most major advanced countries have created dual use economic infrastructure in their countries, recognising the importance of synergies between the two sectors. This is not surprising, as even a simple product requires thousands of parts in the form of advanced circuitry, components, composite materials, and so on. India needs to adopt a similar approach.
The effort has therefore to start with upgrading the civilian economy. China’s example is very instructive. China had, like India, started out with a centralised planning system which penalised growth, as it had in India. Apart from some successes in the nuclear and defence weaponry fields, the level of Chinese technology was similarly low.
The arms embargoes after Tiananmen forced China to focus on a stronger indigenous technological capability. But China proceeded, guided by Deng Xiao Ping’s intuitive understanding of priorities, to first create a strong civilian economic base before it started to leverage the economy’s technological capabilities for its defence sector.
China initially went in for a comparative advantage model of development, in which it shifted gears from a heavy industry development strategy to releasing the productivity potential of its natural factor endowments such as labour and light industry, while slowly dismantling the trappings of centralised planning (Justin Yifu Lin, now Chief Economist of the World Bank).
It then implemented measures outlined in Michael Porter’s theory of competitive advantage (The Competitive Advantage of Nations), in which he established the umbilical relationship between technology, productivity, high living standards and a growing internationally competitive economy.
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China realised that it needed to move beyond the low to high-tech phase of development based on the paradigm sketched by Michael Porter. An important complement to China’s high-tech strategy (and defence structural reforms) was simultaneous initiatives in higher education through the 211 and 985 programmes.
But the most interesting part of the Chinese strategy was the need to build linkages between their civil and military sectors and achieve civil-military integration, as they realised that a sophisticated defence technological infrastructure cannot be built by firewalling defence production from the civilian economy.
The reforms that China adopted to open up its defence economy and make it conform to the laws of the market facilitated its technological progress. In fact, rather than “spin off”, the Chinese indigenisation drive has depended more on “spin on”, which means that the civilian economy has contributed to the technological modernisation and increasing sophistication of its defence infrastructure.
China of course also used other strategies such as reverse engineering and copying of technology. But without the systemic reforms it implemented this could not have gone beyond imitation. India should study China’s multi-dimensional strategy for achieving success in high technology in the context of its ongoing manufacturing, infrastructure and defence sector reforms.
India also started out with central planning and vestiges of the compartmentalised, bureaucratic systems continue to thwart rapid progress in developing indigenous technology. Inventors of breakthrough technologies feel that India discourages and actively impedes innovation and R&D start-ups in the brick and mortar space. Technological miracles witnessed in IT would have been possible throughout our economy if not for the dead weight of bureaucracy. The end result, as noted earlier, is that India still imports 70 per cent of its weapons requirements, while China has started reducing its dependence on Russian imports.
The lessons learnt from China’s experience and other countries’ successful science development strategies can provide an impetus for further far-reaching defence sector reforms, particularly in the offsets regime, which should be leveraged to increase the competitive advantage of the entire economy rather than focus on a few narrow sectors. They should also provide impetus to much-needed reforms in the scientific infrastructure of the country, as well as in the education sector, both higher education and vocational. Above all, it should provide the impetus for removing the dead weight of bureaucracy from every field and replace it with efficient systems and a motivated, incorruptible cadre.
Foreign partnership is of course desirable, but the focus should be on starting with and focusing on domestic reforms and indigenisation in a non-autarkic framework, however challenging these may be. That's where China’s example is worth studying, since it reformed cumbersome internal structures and systems and created an environment for systemic innovation.
For foreign partnerships, India will have to undertake protection of intellectual property rights of every such venture with every such country. There is a possibility that we will meet with resistance to this idea from foreign partners. That is why it is essential to start with indigenous efforts and reforms. Thereafter the ambit of participation could be broadened to multiple foreign partners, which would generate competition to offer India the best technology transfer terms. India could then leverage its market just as China did, with mandatory targets for indigenisation. The recent India-China-Russia meeting in Wuhan focused on innovation for trilateral cooperation. Russia has also initiated a project to build an innovation city — Skolkovo — on the outskirts of Moscow.
The time is ripe to push forward on making India too a high-tech power.
The author is a diplomat, on loan to the Institute for Defence Studies and Analyses as senior fellow. The views are personal