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The Knowledge Economy Framework Read chapter Read first chapter

2019 | OriginalPaper | Chapter

4. Engagement

Author : Anand Kulkarni

Published in: India and the Knowledge Economy

Publisher: Springer Singapore

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Abstract

This chapter has a number of parts. It introduces the novel idea of a Knowledge Footprint designed to measure the extent and magnitude of a nation’s embrace of a knowledge economy. It encompasses both domestic and international elements of knowledge flows. The chapter measures India’s Knowledge Footprint against other countries, and finds that out of 15 countries India is ranked a disappointing fourteenth. The chapter then delves into key focus areas of exports to assess India’s performance on this critical dimension of internationalisation. India is making some tentative inroads into becoming a knowledge intensive exporter. The chapter then turns to another ‘E', that of entrepreneurship and finds that despite the optimism surrounding India’s entrepreneurship, there are a number of missing elements in the overall ecosystem. The chapter also considers environment as an important element associated with the ‘E' framework. A number of strategies are outlined in this chapter.

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Appendix
Available only for authorised users
Footnotes
1
The author was the lead in considering the Knowledge Footprint in the context of a University or educational institution (Kulkarni et al. 2015). This book takes the broad concept of a footprint and analyses it for countries in an extensive way.
 
2
The Production Readiness Index, prepared by the World Economic Forum, captures environmental parameters.
 
3
The Global Innovation Index also has a classifying system, including denoting innovation leaders who perform 10% better than their GDP would suggest.
 
4
The Global Innovation Index feature comparisons with GDP per capita.
 
5
Distance to frontier is a common approach in these sorts of analyses, for example the World Bank Doing Business Index.
 
6
Figures for Business Environment are largely drawn from the World Bank Doing Business Index (2018), noting that India has continued to gain in the 2019 Index.
 
7
The section on trade builds on, modifies and enlarges a conference presentation by the author and subsequent journal article in the Indian Journal of Economics and Business (Kulkarni 2016). Permission has been granted by the editor of the journal, and Springer.
 
8
The calculations by the author performed for exports, imports and foreign direct investment in this and the following sections are drawn from data from the United Nations Conference on Trade and Development (UNCTAD). Data is for 1996–2016. Trade data was accessed on 17/8/2017, and investment data on 12/4/2018.
 
9
Labour intensive and resource intensive manufactures comprise leather, textiles and clothing, glass, paper and wood industries.
Low skill and technology intensive manufactures include iron, steel, tubes, wire products, base metals, tools, motor cycles, trailers and semi-trailers, railway vehicles and equipment, ships/boats and office and stationery supplies.
Medium-skills and technology intensive manufactures cover household electronic equipment, apparatus for electrical circuits, rubber products, boilers and steam turbines, engines and motors, tractors, agricultural machinery, machinery for textiles, leather, paper, food processing, heating and cooling equipment, pumps, motor vehicles, prefabricated buildings, lighting fixtures.
High Skill and Technology Intensive Manufactures comprise office machines, automatic data processing machines, television and radio receivers, parts for machines, telecommunication equipment, chemicals and chemical products, medicinal and pharmaceutical products, aircraft and equipment, optical instruments and goods, measuring instruments, watches and clocks, musical instruments and art, photographic equipment, instruments an appliances and jewellery.
Source UNCTADSTAT Manufactured goods by degree of manufacturing.
 
10
The Revealed Comparative Advantage is measured by country a’s exports of good or industry b/world exports of good or industry b divided by total exports of country a/total world exports Mukherjee and Mukherjee (2012) for the formula based on Belassa’s work.
 
11
Commercial Knowledge Intensive Services include business, financial and information services.
 
12
Author calculations based on National Science Foundation (NSF) data.
 
13
Emerging Market economies are defined as: Argentina; Brazil; Chile; China; Colombia; Hungary; Indonesia; Korea; Malaysia; Mexico; Peru; Philippines; Poland; Romania; Russia; South Africa; Thailand; Turkey and Ukraine.
 
14
Modern services are defined as: finance; computer and information systems; royalties and licensing fees and other business; Traditional services comprise communications; insurance; transportation; travel; construction; personal, cultural and recreational services. The focus in the IMF paper is on commercial services exports, including Government services.
 
15
India’s trade openness i.e. exports+ imports/GDP has risen from 22% in 1996 to 40% in 2016. Author calculations from World Bank data https://​data.​worldbank.​org/​indicator accessed 11/3/2019.
 
16
As mentioned previously, foreign investment author calculations are from UNCTAD data.
 
17
The author has classified the data into advanced manufacturing and advanced services, based on the sorts of industry classifications observed in UNCTAD and the National Science Foundation.
 
18
Where knowledge intensive services are defined as commercial knowledge intensive services from NSF, and medium and high skill manufactures from UNCTAD, and knowledge intensive investments as defined above.
 
19
Note that a fuller assessment would involve outward investment growth, however this is not available by industry.
 
20
A somewhat similar notion is that of an Asian area Research Zone put forward by the Australian Chief Scientist Australian Government: Chief Scientist Science, Technology, Engineering and Mathematics, Australia’s Future (2014).
 
21
Award to Indian Diaspora on the day of the birth of India’s most famous expatriate Mahatma Gandhi.
 
22
Data refer to 2016.
 
23
Excluding individuals who are involved in any stage of entrepreneurial activity.
 
24
According to UNESCO (2017), innovative firms are those that have implemented product or process innovations, while innovative active firms are those that implemented or abandoned or are undertaking innovative activities for product or process innovations regardless of organisation or marketing innovations. Non-innovative are those that did not implement, nor have abandoned nor undertaking ongoing activities for product or process regardless of organisational or marketing innovation. Unless otherwise specified, innovative activities cover product or process innovations.
 
25
There is not necessarily concordance between the definitions of firm size employed by UNESCO and the Indian Government Ministry of Micro-, Small- and Medium-Sized Enterprises. The UNESCO definition is based on employment while the Ministry is based on investment. In the UNESCO database, micro are 0–99 employees, small 100–499 employees, medium 500–999 and large greater than 1000 employees. According to the Ministry, micro manufacturing is investments not exceeding twenty five lakh rupees, small is between 25 lakh and 5 crore, medium is greater than 5 crore but less than 10 crore, while for services micro service businesses are those that do not exceed ten lakh, small are between ten lakh and 2 crore and medium are more than 2 crore but not exceeding 5 crore. An Indian Lakh is 100,000 rupees and a crore is 10 million rupees. It should also be noted that the UNESCO survey is based on manufacturing alone, while the MSME is both manufacturing and services, and India is not a strong performer in manufacturing.
 
26
This data refers to 2009.
 
27
Author classifications consistent with UNCTAD and other definitions. Author calculations.
 
28
In 2017–2018, GEM used discontinuity rates of all businesses, including early stage and established business. The discontinuity rate was significantly lower in 2017–2018 compared to 2016–2017. We use the 2016–2017 data to highlight the issues concerning early stage possibly more vulnerable enterprises.
 
29
The lack of finance was even stronger as a reason for discontinuation in 2017–2018 as is unprofitability.
 
30
The 14 broad variables are: opportunity perception; start up skills; risk acceptance; networks; cultural support; opportunity start up (motivation by opportunity rather than necessity) technology absorption; human capital; competition; product innovation; process innovation; high growth; internationalisation; and access to risk capital.
 
31
Bottom of the pyramid firms is the term coined famously by Prahlad (2005) to indicate lowest income segments and how firms can exploit these markets by developing products and services specifically for them.
 
32
Startup India also has a fund of funds approach, different in size and scope from ours.
 
33
Other jurisdictions use vouchers.
 
34
The IdeaBank does have elements in common with the Honeybee network, but also key differences in that we envisage IdeaBank to be constituted as a formal bank, offering interest payments and loans, and deposit facilities, and being linked to the NEIF to provide a seamless and integrated whole.
 
35
Subramanian (2018) articulates similar propositions regarding relative mix of renewables and coal, in calling for consideration of broader costs in making policy, including stranded assets and impacts on spatial development.
 
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Metadata
Title
Engagement
Author
Anand Kulkarni
Copyright Year
2019
Publisher
Springer Singapore
Book
India and the Knowledge Economy

Print ISBN: 978-981-13-9377-8

Electronic ISBN: 978-981-13-9378-5

Copyright Year: 2019

DOI
https://doi.org/10.1007/978-981-13-9378-5_4