External Technology Sought during Complex Transition

By Steele, Lowell W. | Research-Technology Management, May/June 1998 | Go to article overview

External Technology Sought during Complex Transition


Steele, Lowell W., Research-Technology Management


India is often called a continent, not a country. Its potential has long tantalized entrepreneurs: giant population (900 million); stable, if fractious, democracy; on the cusp of industrialization; impressive heritage of intellectual achievement; and a remarkable reservoir of highly talented, technically trained people. But it has been, until recently, a prickly business partner and a frustrating market to gain access to.

A recent trip to India to help conduct seminars for senior managers of the Council of Scientific and Industrial Research (CSIR) reinforces, for me, the complexity of the transition underway in that huge, ancient, intricate country. Two considerations must dominate every impression and judgment: her history of occupation and her incredible fragmentation in terms of customs and language.

After a thousand years of occupation-800 by Moguls and 200 by the British-India has been free to chart her own course for 50 years. This history of occupation inevitably colors every aspect of Indian life and every policy issue. Fragmentation clearly eased the path for invaders. India is an amalgam of hundreds of subgroups, cultures and languages that severely inhibit coalescing opinion or effort on virtually any issue. On the one hand, the security created by local identity and pride in local culture is a source of comfort; on the other, the inability to capitalize on the benefits of scale that population, geography and technological heritage should make possible creates frustration.

India's distinguished tradition in science and technology is perhaps best recognized in mathematics-the concept of zero was invented in India-and is deeply embedded. Two seminar participants who were parents of subteen children said they simply demanded, almost unthinkingly, that their children excel in math. Anything less than 100 percent was unacceptable. Perhaps less widely recognized are accomplishments in astronomy (instruments of amazing accuracy hundreds of years old), dramatic architecture, and textiles, carvings and marble inlays of incredible intricacy and delicacy.

Legacy of Self-Sufficiency

The history of occupation colors attitudes toward technology and economic development. Gandhi's advocacy of self-sufficiency, partly as a statement of defiance to occupation ("we don't need you") and partly to encourage local pride in capability, have been both a stimulant and a drag. Policy has consistently fostered the development of indigenous technology, but that situation is changing. The inevitable maturation of nationhood that makes it possible to approach economic and technological issues more dispassionately, combined with the rush to globalization in all countries, is driving the transition to be more open to external technology and to direct investment.

The emphasis on self-sufficiency has influenced the approach to licensing, investment and intellectual property. India's insistence on access to technology, even proprietary information, in licensing negotiations and in establishing a local business base, has been a major obstacle to foreigners-witness the decision of Coca Cola to withdraw years ago rather than disclose its formula. Similarly, insistence on maintaining controlling interest in investment has impeded capital flows. Interestingly, the greater understanding gained by Indian industrialists when they contemplate foreign investments and are confronted with the same demand for local control, has helped increase awareness of the impediments these demands create for flows of capital.

Intellectual Property Concerns

In technology, the drive for selfsufficiency has been evident in policy regarding intellectual property. India has interpreted patent rights narrowly. It has not recognized composition-ofmatter patents, which has encouraged a focus on working on processes that get around patent constraints. The new global protocols that take effect in the year 2000 are forcing a challenging change in focus. …

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