WP-50

A CRITIQUE OF THE DRAFT TECHNOLOGY POLICY 1993

by

Dr. M.R. Gopalan*

INDIAN INSTITUTE OF MANAGEMENTBANGALORE

* Professor, Indian Institute of Management, Bangalore

A CRITIQUE OF THE DRAFT TECHNOLOLGY POLICY 1993

By

DR. M.R. GOPALAN

Indian Institute of Management, Bangalore (IIM-B)

June 1993

INTRODUCTION

The 'draft new technology policy 1993' has been widelydiscussed in the press as well as in journals and also invarious forums. The contents of the policy has been widelysubjected to criticism and some have also given constructivesuggestions. The aim of this article is to look into allthe dimensions of developing a technology policy and then tolook critically into the 'draft technology policy 1993'already brought out in February, 1993.

AIM OF TECHNOLOGY POLICY STATEMENT:

A technology policy statement should aim at providingguidelines for formulating systems and procedures forsubsequent implementation of the policy intents as such indifferent sectors of the economy to achieve the desiredgoals. In order to give proper directions for implementingthe technology policy, it should focus on the following:

1. It should first of all review the earlier policy fortheir success and failures. In many of the policystatements the success and failure parameters are notclearly spelt out. As a result, on does not know whatto evaluate and also how to go about. For example oneof the policy statements ocild be :"Technologydevelopment should facilitate improving the standard ofliving of the rural population". The parameters whichwill measure standard of living should be specified andshould be used in evaluation (at least in this case itis not difficult). Such evaluation should be carriedout for each identified areas. For example, they couldbe:

(a) Electronics(b) Telecommunication(c) Software development(d) Space Technology(e) Use of technology for competitiveness in various

manufacturing and service industries, etc.

2. It should spell out broadly the specific objectives ofthe proposed currrent policy. The areas of coveragecould include the following:

(a) TECHNOLOGY ADOPTION,ABSORPTION AND DEVELOPMENT

This means that the policy statement shouldhighlight the specific areas wherein the technologyadoption, absorption and development is desirablewith a specific purpose as indicated in (b) • Thetechnology to be developed and adopted should not

only focus on indigenously developed ones butshould also focus on technologies to be adoptedimported from abroad and adopted.

As the reasources are limited, specific areas onpriority basis should be identified. In many casesit could be related to adopting to a newtechnology to upgrade the unit.

(b) REASONS FOR TECHNOLOGY INTRODUCTION

The technology to be introduced should facilitateachieving the following in the industry and servicesector:

- Increase in the value addition- production of gooods and services which areexpoortable

- Effective utilisation of the criticalresources.

- make ise of locally available resources- competitive advantage- Globalisation- Environment friendly (less pollution)•

In many situations the above could be achieved bysimply adopting to the existing available bettertechnology. The policy, in fact, shouldspecifically mention the critical areas wherein theavailable new technology could be introduced asfast as possible so as to ahieve the aboveobjectives. The example that can be cited here isthe case of Software Exports. In order to increasethe Software Exports, one may have to upgrade theexisting telecommunication technology. If this hasto be done, we should think of adopting to thestate of the art of technology which most probablycould be obtained from abroad (we will discussabourt the funding later) . If one startsdeveloping the indigenous technology now for this,you may miss the bus with regard to SoftwareExports. Therefore, the technology policy shouldfocus on the areas which require immmediateupgradation of technology so that our products andservices become competitive in the short-run.

(C) BUILDING UP INFRASTRUCTURE

Competitivenss through technology could be achievednot by just installing a new technology into yourbusiness. Maximum results can be achieved onlywhen proper infrastrcture support is available.This may involve:

- development of human skills through continu-ous training

- Develop more knowledge workers- Standardisation of inputs and outputs toreduce variety and maintain quality

- Introduction of Quality Systems Certifica-tion through reputed agencies

- Installation of Testing facilities- Introduction of fast communication systems- Efficient transport system- Uninterrupted power supply- Basic needs of the people must be met on apriority basis (food, clothes, water,housing and health)_this, in turn, could beachieved by technology introduction

- Existence of venture capital organisationsfor sponsoring new innovations,

It requires an enormous amount of resources toprovide such infrastructure facilities. How do wegenerate such an enormous amount of .resources tocompletely revamp our infrastructure? In theabsence of such an infrastrucutre, introduction ofnew technology into our system will be somethingequivalent to building a house without any properfoundation .Therefore funds management assumes lotof importance.

(d) FUNDS MANAGEMENT

The technology policy statement should also addressto the related problem of generating enoughresources to buy latest technology whereverrequired and also to develop the infrastructurewhich will facilitate effective utilisation of thetechnology. The only way this can be done fast isto attract foreign companies to invest in Indianindustry. Therefore, the changes in the Industrialand Trade Policy are required to attract ForeignDirect Investment (FDI). The recent liberalisationpolicies are aimed at this. What are the benefits?

(i) Investment in Indian industry by foreigncompanies increases (ii) Expected to bring inbetter technology than what exists in the country(iii) Production of Exportable goods and services(iv) Exports bring in more foreign exchange intothe country (v) Surplus foreign exchange should beencouraged to be reinvested in developing betterinfrastructure facilities and also to upgrade thetechnology further.

This process should continue till such time that weare at least comparable to economies such asMalaysia, South Korea, Taiwan and Singapore,Meanwhile, we whould also be concentrating on ourR&D activities by investing enough of resources toupgrade and develop technologies on our ownwherever appropriate.

(e) R&D AND MANAGEMENT QF R&D

Another area where proper focus is required is withregard to investment in R&DE and also themanagement of R&DE. A comparison is alwaysmade with other developed countries with regardto the investment made in R&D. This percentageshare of R&D in the GNP as far as India isconcerned is very low and hence it is being feltthat our investment in R&D should increasesubstantially. In many organisations the usualcost reduction activities that are undertaken arereported as R&D. The policy should, therefore,emphasise that the companies , and otherorganisations should focus on research which willresult in a new process or a new product which willensure better quality at affordable price. It isalso a wrong notion which many people are havingthat if investment in R&D is increased the countrywill be far better off in developing and usingtechnology. It is not at all going to be truekeeping in mind the past-Indian experience.

Incidentally we are the third largest in the worldas far as the inventory of S&T personnel isconcerned. But our output is very minimal. Onewould always prefer to measure the output of S&Tpersonnel as achieving competence in theinternational market with regard to productsmanufactured and services provided. It could alsobe in the form of patents registered.

It is also expressed that if S&T manpower isincreased sizably in relation to population, thedevelopment and use of technology is going toincrease manyfold. In fact, on the contrary, astudy conducted by IIM-Bangalore for the Departmentof Science & Technology, Goverment of India,showsthat many of the existing S&T personnel all overthe country are under-employed. Therefore,effective utilisation of the existing S&T personnelshould be the key focus and not increasing theinventory of S&T personnel as such. Here comes therole of R&D Management. The policy should focus on

as to how to motivate our R&D staff as well as toreorient our research laboratories, so that thescientific community can identify themselves aspartners of our manufacturing, service units andthe industries rather than living in ivory towers.For this process to succeed the proportion ofinvestment in R&D shoiuld be more from industry ascompared to Govt. investment. What we normallyexpect over a period of time is that investment inR&D should be need-based.

<f) THRUST AREAS

It is important to identify certain thrust areaswherein India should participate and invest intechnology development. It will not be possiblefor us to focus on each and every areas. Thereason could be serious limitations of resourcesand expertise in the proposed field of study. Incertain areas we will not be able to catch up withothers. Since enough help will not be forthcomingwith regard to certain technologies from countrieswho possess such technologies especially in thefield of defence and space technology, one has togive priorities for indigenous development. Forexample, in order to provide drugs at cheaperprice, India would be interested in developing itsown processes for manufacture of common andessential drugs. If we manufacture these drugsunder licence from foreign companies, the prices ofthese drugs are going to be exhorbitant due toroyalty payments for product patents.

While arriving at this list of thrust areas oneshould investigate and estimate the amount ofinvestment required (money, manpower, etc.) andshould arrange them in the order of priority andtake up only those which are possible within thebudget. But areas like space technology anddefence oriented projects cannot be dropped.Similarly, atomic research cannot be neglected.

Whereas in the draft proposal we find thirteenthrust areas. It is an impossible task to take upall these areas. The following areas may beimportant ones:

1) Space Technology for communication, remotesensing and for other purposes.

2) Missile Technology development.

3) Development of processes for drug manufac-turing.

4) Atomic Power Generation.5) Biotechnology.6) Superconductivity.7) Technologies that are needed to enhancesoftware development and exports.

These are the technologies which are not going tobe available easily and hence maximum priority tobe given. However, these requirements should bematched with the funds availability.

(g) CREATING AM ENVIRONMENT FOR TECHNOLOGY DEVELOPMENTAND USE

Successful technology development and use isdependent upon several factors:

1) Creating an atmosphere forcompetitive-ness in all sectors of theconomy. To certain extent this could beachieved by allowing large number ofplayers in the market place. Simplifyingprocedures and relaxations of the variousconstraints could also facilitateorganisations to perform the tasks fasterand efficiently.

2) All consumers of various goods andservices should organise themselves andexercise their rights to get better goodsand services. Consumer education shouldplay a critical role in creating awarnessamong consumers about their rights fordemanding quality product and servicewith regard to various types ofactivities. This is the only way by whichan impact could be made on themanufacturers or Indian goods to becomecompetitive.

3) Certain basic technologies should, at anycost, be made available in everyorganisation. Today for fastercommunication FAX machine is a must inmost of the organisations. Large numberof PCs are getting installed in everytype of organisation and hence theinformation processing is undergoing adrastic change.

4) A technology audit should be mademandatory for every organisation as it isdone for financial audit. The auditshould aim at establishing the gap thatexists in adopting to minimum technologystandard required.

5) All aspects of intellectual property actsshould be critically looked into tofoster innovation and commercialisationof the same. To take advantage ofglobalisation, the government should tryto integrate the law with regard to theIndian Intellectual Property acts withthe International Conventions. This maygive us an advantageous position when theIndian Business goes global.

(h) POLICY IMPLEMENTATION

The following questions will arise with regard toimplementation of the above policies:

(1) Who wil prepare the implementation plan?(2) What are the things that are required to

develop an implementation plan? It couldbe:- various types of resources needed- sources of funds- amount of resources that could be mobi-

lised- time-frame within which the tasks are

likely to be completed (depends uponthe quantum of resources)

- Identification of various agencies whowill be executing the tasks atdifferent levels (central, state,district, taluk and panchayat). Respon-sibilities and authorities of theseagencies should be clearly speltout.

- What are the various activities to beperformed according to some priorityorder? (taking into account fundsavailable)

(3) Implementation to be effective, what isthe type of organisational set-up thatis envisaged at all the levels asmentioned in (2)?

(4) How is the monitoring going to becarried out?

What type of set-up is envisaged formonitoring?

What are the parameters to bemonitored and how often?

What is the action going to be takenif there are deviations?

During implementation some of theactivities may have to be taken, up bythe organisations themselves based onthe policy directive. For example,investing in R&D to improve the competi-tiveness should be the task of the orga-nization/industry.

To ensure whether the organisations areadopting the policy directive or not,government can think of introducing atechnology audit and quality audit.These auditing tasks could be entrustedto organisations such as confederationof Indian Industry (CII) and Bureau ofIndian Standards (BIS) and to any otherapproved agencies. But this is going tobe a massive task and hence we have tocreate the infrastrucutre first beforeone ventures upon this approach.

3. CONCLUSIONS

A. It can easily be concluded from what has happened in thepast that no systematic approach has been attempted atimplementation, monitoring and control of the activitiessupposed to emanate from technology policy statements.

B. Preparation of the document itself was deficient invarious aspects.

(a) It does not specify a time frame.(b) It does not mention anything about the resources

required to implement the contents of thetechnology policy.

(c) No discussion on the type of organisation requiredfor implementation.

(d) A holistic approach is not attempted at, especiallywith regard to improving the basics in varioussectors of activities.

C. No methodology has been specified for monitoring andcontrol of programme activities.

D. In the light of the above remarks it may be mentionedthat the new technology policy statement (1993) is notgoing to produce any substantial results as anticipated.

Therefore, finally it may be concluded that it ishightime that the team formulating the 'technologypolicy 1993' looks into the above aspects andincorporate the relevant ones which will result in easyof implementation.