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Friday, December 22, 2023

Great Tech Race: How fast does India need to run?

The idea of war is not the same as it was during the two world wars. The wars today, cannot solely be won by putting men and ammunitions on the battle field. The definition of ‘wars and ammunitions’ has changed in the past few decades. During the cold war, there was a space and technological race between erstwhile USSR and USA, wherein the two countries were always up against each other. Back then the world seemed more bipolar, however, now it is not the case. It is a multipolar world, wherein each country is up against each country. In this great tech race of the century, China is one of the biggest players. It has been established that Chinese have a great hold on the market throughout the world. Chinese goods are so penetrated into the local markets that, for any commoner it is difficult to differentiate.

India has always been its own person. During the cold war, India did not side with either NATO or the WARSAW, rather it began with a separate movement altogether called the Non-Aligned Movement (NAM). The benefit of this is that India is that one country that is in good terms with both Russia and the USA. This is seen in light of the market economy that India has aimed for, especially since it opened its market and went for a mixed economy. India has already began playing the big game but now the time is to pick the battles to win the war.

Senator James Patterson, in his speech to the American Enterprise Institute, Washington on 13th September, 2022 had pointed the foundational technological battlegrounds that are likely to define the 21st Century. These being – Artificial Intelligence, Semiconductors, Quantum Information Science and Technology, Biotechnology, 5G and Green Technology. It is pertinent to note that all the developed countries of the world are putting in all their resources to ensure that they are the leaders and India is also in that race. However, with the kind of policies that China implements, like usage of human resources at all levels of economy, state-controlled market and trade, mass production at cheaper rates and the cost of products also being less, has led to a lot of different markets of the world being flooded with Chinese goods. This flood of Chinese goods has made the world market dependent on China for different produces.

The problem is the state-sponsored surveillance through different usages of Artificial Intelligence. Moreover the military applications of quantum computing, communications and sensing technology are no longer in the realm of the hypothetical. Quantum communications could see state secrets stolen through broken encryptions. Energy security is national security, and China is now the world’s leading manufacturer, user and exporter of low-emissions technology. With the mounting pressure due to climate change and environmental degradation, majorly the developing countries are rushing to transition to renewable energy, thereby, they will become increasingly dependent on China’s technology to meet their climate targets – a troubling dependence both strategically and morally given much of it is being made by forced labour from persecuted minorities like Uyghurs in Xinjiang.

China already spends $70 billion more annually on commercialising scientific developments than America. China will overtake the US in R&D expenditure within the decade on current trajectories, according to the OECD.

The bad news is that India is lagging far behind in such technological developments. The India Innovation Index, 2021 published by NITI Aayog shows that India’s expenditure in research and development is one of the lowest in the world. Research and Development investment in India, in fact, has declined from 0.8% of the GDP in 2008–09 to 0.7% in 2017-18. Data shows that India’s GERD is lower than the other BRICS nations. Brazil, Russia, China and South Africa spend around 1.2%, 1.1%, above 2% and 0.8% respectively. The world average is around 1.8%.

On the other hand, India jumped from 81 in 2015-16 to 46 in 2021 in the Global Innovation Index (GII) when it comes to innovation, which looks like the good news we want to hear. Yet, while India was granted a record 58,502 patents in 2021, it is way behind other competitive economies such as China (5.30 lakh) and the United States (3.52 lakh patents).

In 2021, the government rolled out the fifth draft of Science, Technology Innovation Policy, 2020, for multi-stakeholder consultation. Also, the recent establishment of the National Research Foundation (NRF) with the aim to catalyse, facilitate, coordinate, seed, grow, and mentor research in institutions around the country, is the step in right direction. Moreover, to become atma nirbhar (self-reliant), it has allocated ₹76,000 crore for the Design-Linked Incentive (DLI) scheme to start greenfield semiconductor and display fabs. The growth of domestic semiconductor R&D and manufacturing will be a catalyst for growth across sectors, leveraging new-age technologies.

However, as important these steps are in developing India’s tech regime, they are still insufficient. As per an Asian Development Bank report, the private sector’s contribution to GDP increased from 66% in 1980s to over 80% in 2000s. It also shares over 75% of domestic capital formation, attracting massive investments over the years. The private sector contributes less than 40% to GERD, whereas its contribution goes beyond 70% in other advanced countries. India needs its public and private sectors to collaborate on a war footing on the following fronts.

In his speech, senator Patterson pointed that during the cold war with the Soviet Union, it was America’s uniquely powerful model for creating and sharing wealth under a free market system enabled it to outcompete the Russian economy which could not keep up. Human ingenuity, creativity and entrepreneurship ultimately always flourish most strongly in free societies. According to him, it was the competitive markets, rule of law, private property rights and free trade which fuelled the growth of USA and ensured liberal democracies prevailed against inefficient, corrupt and inflexible centrally planned economies. If that is true, then going by the same pattern, the kind of closed market, communist regime and state-controlled, behind the door, policies of China may seem to fuel its growth for now, thereby helping it in becoming the next superpower of the world, but this may not last.

India, on the other hand, is a mixed economy with free market, rule of law, free trade and new and improved labour laws, which can cater to the Big Tech companies. It knows when to give a free hand to such companies and when to control their hindrances in policy making. With privatisation in defence, science and technology, space technology and education, the goal of India to create a name for itself in Great Tech war is increasing. It needs increase its spending in the right direction in order to become a superpower in the war of modern times.

Furthermore, with the new UN Report on the atrocities of the Chinese government on the Uyghur Muslims in Xinjiang province, the world has shifted its attention to the humanitarian crisis therein. Chinese apps, companies and their operations have either been banned or restricted by certain countries like USA and India. The focus of the world on curtailing the Chinses dominance is a blessing in disguise for India. It is time for India to swoop into the field of Tech race, climb the ladder and make sure that its presence is felt.

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