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Trends in Public and Private Investments in ICT R&D in India

  • Authors: Payal Malik and P. Vigneswara Ilavarasan
  • EUR Number: Technical Note: JRC 64578
  • Publication date: 5/2011

Abstract

The Information Society Unit at IPTS (European Commission) has been investigating the Information and Communication Technologies (ICT) sector and ICT R&D in Asia for several years. This research exercise led to three reports, written by national experts, on China, India and Taiwan, each one including a dataset and a technical annex. This report covers India. The report describes the Indian ICT sector, and gives a company level assessment. It also analyses Indian ICT R&D strategies, and assesses the innovation model. Information and Communication Technology (ICT) is an important emerging sector in contemporary India. The Indian ICT industry contributes to the national economy in many ways and almost all the Indian states are targeting the ICT sector as a vehicle for economic development. This sector employs about 2 million people directly, with indirect employment projected at four times direct employment. The Indian ICT sector is growing in all domains, but is predominantly driven by software services. Here growth is driven by services – a real "service revolution" with unusual innovations. Since the Indian ICT sector concentrates on services, innovation is predominantly on processes. The domestic industry is expected to grow faster as ICT expenditure by the other industrial sectors increases. The presence of a domestic market of critical mass is crucial for the long-term growth of the firms and the industry. However, the small size and low income potential of the domestic sector force firms to depend exclusively on the export market, making this sector more vulnerable to foreign market and policy fluctuations.

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