It is an economy that leverages the existing knowledge to improve overall productivity across industries and human development. According to a World Bank publication, India and the Knowledge Economy: Leveraging Strengths and Opportunities, India is at the top of the bottom third in the global knowledge economy.’ India is going to be a knowledge-based economy in the near future’. The Indian software industry has been showing an impressive record over the past decade. The use of e-mail, e-governance and development of information technology shows that India is slowly transforming itself into a knowledge-based economy. Even though the academic sector is hit hard and it is difficult to put in a price on the knowledge economy but the future of the Indian economy is the one worth predicting. India’s economy is likely to grow two and a half times to $7 trillion by 2030, from about $3 trillion now, making India the world’s third-largest economy. This implies that nominal GDP growth is likely to average just over 10% through the next decade, Deutsche Bank said in a research report, Imagine 2030.
Is India a knowledge economy? Is the future of Indian education bright? What is the need for a knowledge economy? Firstly, the knowledge economy is a very vast topic. In traditional models of economic activity, the main factors of production are land, labour, capital, entrepreneur. A knowledge economy is important for widening the scope of labour from producing goods on an assembly line to greater flexibility in design, manufacture and implementation of business ideas. A developing country has manufacturing and service-based economy, and developed countries tend to have service-based economies. Examples of knowledge economy activities include research, technical support, and consulting. “The knowledge-based economy” is an expression coined to describe trends in advanced economies towards greater dependence on knowledge, information and high skill levels, and the increasing need for ready access to all of these by the business and public sectors.
With constant developments in infrastructure and EdTech, India is moving forward to becoming a knowledge economy. Innovation in education as well as the introduction of the new education policy has shown that the Indian academic sector is travelling its path into the very technical world. Surely, the knowledge economy is the future of the brand new India. It is highly necessary for India to travel toward the Knowlege based industry since it enables product innovation and customisation. A greater role for human capital also plays a major role in development. New growth theories emphasise the potential for human capital and increasing knowledge to provide new sources of economic growth and high levels of productivity. The proposed framework articulates that six elements are essential to generate knowledge outputs: Innovation Capability, Leadership, Human Capital, Information Technology Resources, Financial Resources, and Innovation Climate. India is amplifying into a knowledge economy because the knowledge intensity of the country is widely expanding. The knowledge intensity can be defined as an extent in which the knowledge processes are performed and knowledge resources are utilised. Therefore, the knowledge intensity represents an indicator that is worthy to be monitored.
India is an emerging and developing country (EDC) found in southern Asia. However, despite its rapid growth, poverty in India is widespread. The Human Development Index (HDI) places India 136th out of 187 countries, with 25% of the nation’s population still living on less than $1.25 (US dollar) a day. India has made progress in increasing the attainment rate of primary education. In 2011, Approximately 75% of the population, aged between 7 and 10 years, was literate. India’s improved education system is often cited as one of the main contributors to its economic development. Taking about education in India, Education is a very important factor in the economic development of any country. India since the early days of independence has always focused on improving the literacy rate in our country. Even today the government runs many programs to promote Primary and Higher Education in India.
The reforms of 1991 unleashed India’s services sector, which began to clock growth rates of over 8-9 per cent per year. More importantly, it was the Information Technology and Business Process Management (IT-BPM) sub-sector, which had an accelerated take-off. Today, India is an important player in the global IT-BPM industry, which is hinged around the availability of a talented pool of cheap but skilled labour and the growing requirements of firms in Western markets to off-shore their services. However, in the last few years, this IT-BPM model in India has taken a hit for a number of reasons. First, there is a growing backlash in the West against off-shoring, as it is perceived as a way of denying jobs to the locals. Second, the rise of Artificial Intelligence (AI) and its various offshoots — Machine Learning, Deep Neural Networks, etc — are rapidly changing the landscape in which the skilled jobs operate. As a result, while the IT-BPM industry continues to be the dominant player in the Indian economy, its foundation is beginning to get shaky. With rapid developments in the IT sector and business sector, India is developing into a knowledge economy at a good pace.
One of the world’s largest economies, India has made tremendous strides in its economic and social development in the past two decades and is poised to realize even faster growth in the years to come. The time is opportune for India to make its transition to the knowledge economy-an economy that creates, disseminates, and uses knowledge to enhance its growth and development. This enhancement provides a “big picture” assessment of India’s readiness to embrace the knowledge economy, and highlights some of the key constraints, and emerging possibilities confronting India on four critical pillars of the knowledge economy: 1) strengthening the economic and institutional regime; 2) developing educated and skilled workers; 3) creating an efficient innovation system; and, 4) building a dynamic information infrastructure. India should continue to focus its efforts on further reforming its overall economic and institutional environment, and improve its overall trade and investment climate. Addressing issues in this domain will be key because it sets the overall incentive framework needed to improve performance across the economy.