Critical Pillars of Knowledge Economy – An Indian Experience * K.Bhanu Prakash & ** K.Prabhakar Rao ABSTRACT The biggest single source of sustainable competitive advantage in the future will be the ability to crate and mobilize knowledge in the interest of new products and services. In order to be a part of the future world India is working towards a knowledge economy. In keeping with its mission, the government has set a target to create a critical mass of people that would propel the knowledg
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  Critical Pillars of Knowledge Economy – An Indian Experience   * K.Bhanu Prakash& ** K.Prabhakar Rao A B S T R A C T  The biggest single source of sustainable competitive advantage in the future will be the ability to crate and mobilize knowledge in the interest of new products andservices. In order to be a part of the future world India is working towards a knowledgeeconomy. In keeping with its mission, the government has set a target to create a criticalmass of people that would propel the knowledge economy. This critical mass isenvisaged as the wealth of the nation and needless to say education will drive this wealthcreation. The real success of the knowledge economy would depend on the quality of wealth and not the quantity and quality can only be achieved by having people who havean orientation towards research and innovation. To promote innovation and research, it isimportant to improve access and quality both at the micro and macro levels. Innovationand research steer India’s knowledge economy. To create and sustain an effectiveknowledge economy and to strengthen its competitive advantage India must embark onsystemic integration of reforms on four critical pillars of the knowledge economy viz.,the domains of economic and institutional regime, education, innovation, and informationinfrastructure.An attempt has been made in this paper to appraise India’s readiness to embracethe knowledge economy and highlights some of the key emerging possibilities andconstraints confront India on the four critical pillars of the knowledge economy.*Mr.K.Bhanu Prakash, M.Com.,M.Phil.,D.C.A.,(Ph.D.,) SAP FI/CO & HR Consultant,Placement Officer, Vestal Institutes, Vatluru,Eluru. E-mail: ** Mr.K.Prabhakara Rao, M.Com.,M.Phil.,(Ph.D.,) ANU College,   I n t r o d u c t i o n The current economic era label as “knowledge age, or “entrepreneurialsociety, or intangibles economy” characterized by the rapid and global dissemination of information and capital. Technological and productivity improvements continue tohighlight on physical assets, physical tools, intangible assets and socio-cultural toolswhich pace the economic prosperity of an economy. Knowledge Economy may bedefined as “ An economy that creates, disseminates, and uses knowledge to enhance itsgrowth and development. The knowledge economy is often taken to mean onlyhigh-tech industries or information and communication technologies (ICTs)”. It would bemore appropriate, however, to use the concept more broadly to cover how any economyharness and uses new and existing knowledge to improve the productivity of agriculture,industry, and services and increase overall welfare. India has many key ingredients for making this transition. India’s economic andinstitutional regime has several strengths viz., flourishing entrepreneurship and freeenterprise, a strong infrastructure for supporting private enterprise, capital markets thatoperate with greater efficiency and transparency, an advanced legal system and anindependent judiciary. Property rights are fairly secure, and the protection of privateownership is strong. The rule of law generally prevails. Corporate governance has alsoimproved dramatically.India has other intrinsic advantages, such as macroeconomic stability, a largedomestic market, and a large and relatively low-cost and skilled workforce. It also has acritical mass of well-educated workers in engineering, science and abundant rawmaterials. All this should allow the country to emerge as a major hub for manufacturingand service industries.  India - The Knowledge Economy  Since ancient times, our society has greatly valued knowledge. Ourdemocracy has enabled us to spread the benefits of knowledge more widely. Todaywe live in a knowledge era in which every social and economic activity is driven byknowledge.   The access to knowledge is a fundamental goal of India’sstrategy. One of the world’s largest economies, India has made tremendous stride in itseconomic and social development in the past two decades and is poised to realize evenfaster growth in the years to come. After growing at about 3.5 percent from the 1950s tothe 1970s, India’s economy expanded during the 1980s to reach an annual growth rate of about 5.5 percent at the end of the period. It increased its rate of growth to 6.7 percent between 1992–93 and 1996–97, as a result of the far-reaching reforms embarked on in1991 and opening up of the economy to more global competition. Its growth dropped to5.5 percent from 1997–98 to 2001–02 and to 4.4 percent in 2002–03, due to the impact of  poor rains on agricultural output. India’s economy surged ahead to reach a growth rate of 8.2 percent in 2003–04. This is very much in line with growth projections cited in India’sTenth Five-Year Plan, which calls for increasing growth to an average of 8 percent between 2002–03 and 2006–07. Such sustained acceleration is needed to provideopportunities for India’s growing population and its even faster-growing workforce.India has made tremendous pace in its economic and social development in the past two decades. Its impressive growth in recent years can be attributed to thefar-reaching reforms embarked on in 1991 and to opening the economy to globalcompetition. In addition, India strives to maximize its inborn inimitable strengths andtransform itself into a knowledge-based economy which is characterize by the availabilityof skilled human capital, macroeconomic stability, a vibrant private sector, institutions of a free market economy, a local market which is one of the largest in the world, a well-  developed financial sector, a broaden horizon of science and technology infrastructureand global niches in IT. Rank CountryKEIKIEconomicIncentiveRegimeInnovationEducationICT -2 India3.09 2.95 3.5 4.15 2.21 2.49 The Critical Pillars of KnowledgeEconomy   There are four critical pillars of the knowledge economy viz.,strengthening the economic and institutional regime, developingeducated and skilled workers, creating an efficient innovation system andbuilding a dynamic information infrastructure. 1.STRENGTHENING THE ECONOMIC AND INSTITUTIONAL REGIME


Oct 10, 2017
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