India’s Growing Knowledge Economy (Part II)
LAST WEEK, I spoke about the view that India needs a Knowledge Economy (KE) to sustain its high growth rates, and to reduce its social and economic disparities; and it can develop a KE through leveraging its Diaspora’s Knowledge Networks; India has, for some time now, been engaging its Diaspora in this regard.

Professor Jagdish Bhagwati of Columbia University (l), and Dr. Prem Misir

This was the basis of the paper I presented on a panel with the Chancellor and President of the University of Houston, Dr. Renu Khator; Pro-Vice Chancellor of the University of KwaZulu-Natal, Dasarath Chetty; and Dr. Ramesh Patel at the 8th Pravasi Bharatiya Divas in New Delhi, January 7-9, 2010.

India already is engaging its Diaspora, among other methods, in its quest to consolidate its growing KE. And, initially, development of the KE required some sense of the ‘what is?’ in the Indian economy; and application of the following World Bank’s pillars of the KE could be the next step in the developmental process:

 Consolidating the economic and institutional regime.

 Increasing the number of educated and skilled workers.

 Producing an efficient innovation system.

 Constructing a dynamic information infrastructure.

India has to make these four pillars happen in order to become competitive in the global KE; and India would need its Diaspora’s assistance to achieve the four pillars of a KE. India, nonetheless, is in a state of readiness to embark on the KE road.

Panel discussion

The KE paradigm is a superimposition on the crude brain-drain concept, a misguided concept. For years, factoring the brain drain thinking as a dominant concept in migration studies retarded new thinking on the growth process; there are no sweeping answers to the drain-gain question; and benefits and costs accrue to sending countries, receiving countries, and to the migrants themselves.

The brain-drain perspective fails to consider social capital; the social capital could flow from homogeneous and heterogeneous Diaspora Knowledge Networks, while at the same time helping to construct a KE; this is brain-gain. Diaspora Knowledge Networks can convert brain-drain into brain-gain, where it perceives drain not as a loss but as a gain to the sending country.

The Diaspora Knowledge Networks provide knowledge sharing. Knowledge sharing refers to the receipt of information, know-how, and feedback pertaining to a good, service, or procedure. Knowledge sharing involves the coordination of expertise. Knowledge economy – an economy that produces, disseminates, and applies knowledge for growth and development.

Skilled overseas Indian migrants/Diasporas are assets requiring mobilization in order to really consolidate the Indian KE; and it is this mobilization that can produce brain-gain networks/knowledge; Knowledge Networks, by virtue of their capacity to engage in knowledge sharing, are effective conduits to develop a KE; and the amount of knowledge sharing that a KE emits, envelops a broader perspective than mere transferring of monetary remittances; this broader perspective envelops social remittances, as skills transfer, cultural/civic experiences, and the gains from non-Indian socio-professional networks of which these Indian migrants carry memberships.

And the Diaspora would be the critical mover of Knowledge Networks for these reasons:

 Diaspora has a greater proclivity to engage in risk situations than non- Diasporans; Diasporans would tend to have better knowledge and capacity to induce relationship opportunities.

 The rate of return to a unit of investment by the Diaspora may be greater than that of the traditional foreign direct investment (FDI).

 Diaspora provides social capital vis-à-vis Knowledge Networks.

I will continue with some remarks on social capital that flows from the Diaspora’s Knowledge Networks, as a way of showing how to engage the Diaspora, using the Indian experience.