Science, Technology and Liberalization Promises and Challenges

Pranav N. Desai ()

Centre for Studies in Science Policy School of Social Sciences

Jawaharlal Nehru University

New Delhi - 110 067


The challenges of engineering and sciences have posed many questions regarding the paradigm of modern S&T in the twenty-first century. Increasing environmental degradation, population pressures, consumption levels against the backdrop of depleting resources, glaring socioeconomic disparities and a relative ineffectiveness of modern S&T to solve many problems have raised many questions. The emerging technologies like information technologies and biotechnology that have promised to revolutionize the production process, dissolve organizational walls and accelerate 'globalization' have also witnessed accompanying ethical, political and socioeconomic issues. Simultaneously, the rapidly changing international environment and economic liberalization in the recent past have promised higher productivity, efficiency, increased mobility of capital and technology but is also threatening to widen the existing disparities between nations and groups of people. The fierce competition, rapid technological change and the new patent regime have created stress for the S&T system in the developing as well as developed world. Moreover, declining financial assistance and especially in the field of S&T from bilateral as well as multilateral organizations in the last two decades or so to the developing world has raised the importance of TNCs. Thus, this phenomenon has brought into question the existing S&T policies and strategies of various countries. In the preceding context, the present paper is an attempt to analyze some of the global experiences of S&T and liberalization with a focus on a developing country like India. In this paper, it is being argued that in spite of the fact that Indian economic policy environment can favourably be compared with any other Asian country, the unprecedented inflow of FDI has yet to reach the potential. Thus, the determinants of FDI are not simply the liberalized policies but many other factors. An important issue being discussed here is whether FDI would help accelerate technological capability and export intensity? The concept of technological capability is more complex and found to be involving learning, human resource, innovative capability and hence integral part of development process as a whole. An analysis of issues such as patterns, impact and determinants of FDI has been carried out and whether this has helped enhance the technological capability of a developing country like India. The trends in private R&D funding along with patenting pattern have revealed an increase in the last decade. The export structure has also changed drastically but no conclusive evidence has been found between the relationship of FDI, export intensity and technological capability. Therefore, it is essential to discuss the issue of complementarity vs. competitiveness between FDI as a mode of technology transfer and the domestic technological effort. There are other issues that need attention are whether in case of market inefficiency/failure some policy interventions will be required ? or some sector-specific or technology-oriented incentives will be required to induce market signals to guide FDI into desired directions.