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Regional & Social Dimensions of
Innovation Systems
Dinesh Abrol
BRICS Workshop, April 25-27, 2007
Rio de Janeiro
Introduction
• Is India really a success story of globalization?
What criteria should we use to define success?
• Growth rates, absence of financial crisis, reduction
in income poverty, employment, inequality?
• What explains “success” for whom and to what
do we attribute failures?
• My view is as follows:
Development, growth &
innovation
• Distinction between development and growth
• Social, economic and environmental as against economic;
involves appropriate structural transformation;
• Development under capitalism as an evolutionary process and
crisis ridden
• Connection between innovation, growth and
development
• Innovation as central to economic change and development,
balanced regional development needs ecologically and socially
just innovations
• Plan and market debate in respect of achievement of the
principles of ecological, economic and social justice
Regional development and innovation:
Pre-liberalization Indian experience
• Priority to innovations for structural
transformation, utilization of local resources
and regional development & scope for
social sector development to states during
pre-liberalization phase
– Balanced regional development & the role of
democratic influences
– Local economies still not upgraded and marginalized.
– Lessons learnt: methods of catching up & development
paths, lack of appropriate technological planning,
demand creation & entrepreneurship.
Post-liberalization experience
• Two phases: Internal liberalization & external
liberalization
• Impact on poverty, regional inequality,
employment growth & the distribution of income
generating opportunities, health, nutrition &
education, technological & organizational
capabilities, innovation patterns
• Explanation of success and failure is in policy
change
Patterns of innovation and prospects of social
justice for rural areas
• Agrarian crisis, lack of appropriate
technological change, neo-liberal
reforms and demand deflation
– Rising costs of cultivation, falling harvest-time
prices, collapse of the extension services, cut
back in formal sector credit; resulting in falling
incomes & employment
– Impact on farm employment, farm incomes &
food security
Prospects for rural employment under
the current approach to innovation
• In general, the news from the 1990s and onwards on
rural employment is bad news
– Declining labour absorption in rice & wheat production
due to mechanization.
– Lack of labour absorption due to changes in cropping
pattern, increased orientation towards niche-markets,
– Failure w.r.t market creation for alternative systems of
cultivation of primary production opportunities
– Hollowing out of local rural production
Sustainability of productivity &
employment
• Technological change directions, land
degradation & biodiversity loss.
– 187.8 mha (57%) area degraded, inappropriate cropping
patterns, lack of soil & water management,
agrochemical pollution, loss of forest area and agrobiodiversity, making agriculture, animal husbandry &
fisheries unsustainable. As a result of this degradation
livelihoods of rural poor are affected far more severely.
– Changing patterns of industrialized agriculture: broken
linkages, irrational use of chemicals and transition to
biological agriculture or corporate biotechnology based
agriculture
Innovation in rural & traditional
industries: Structural & policy context
• Over 50 percent of the employment in
manufacturing is in unorganized sector and in
rural areas;
• In policy, shift away from traditional occupations,
disadvantaged sections & co-operatives to
individual entrepreneurs, modern SSI aiming
mainly at urban middle class consumers and their
emulators among a tiny section of the rural rich
• Approaches to technology development focus on
making individual petty producer competitive
Non-agricultural rural employment
during post-liberalization
– No new directions to technological &
institutional change in non-farm sector
– Area development reduced to cluster
development; not suitable for multi-sectoral
network horizontally linked occupations
– Safety net approach, targeted support through
schemes for large scale employment of hired
manual workers, not integrated with
agricultural recovery/ transformation
– Large scale schemes for self-employment were
also necessarily state driven and state financed,
Emerging tensions for the NIS: in
Health & Environment
• New patterns of technological integration reduce
the private risks & costs of introduction of new
technologies for the large firms only by enhancing
the social costs and risks for the Indian people that
are already quite well manifest in the forms of
technological fragmentation, import dependence,
unsustainable production and shift into luxury
consumption.
• Loss of autonomy in decision-making, citizens
resorting to judicial interventions
Ideological obsession with the
markets weakens regional innovation
– Reduction in public investment, changing
composition of private & public investment,
State planning processes weakened.
– Lack of investment in the State S&T Councils,
S&T planning for the States, Area development
schemes abandoned
– Reduction of public investment on technology
development (CSIR); shift away from R&D for
regional development
Innovation and Regional Development :
Post-liberalization Indian Experience
• Private investment (domestic and FDI) in
driving seat, uneven development, further
accentuation of peripheral regions
– Outsourcing investments in IT and Pharmaceuticals
flow to Bangalore, Hyderabad, Delhi, Pune and other
such places, leading to enclave like development
– FDI and private investment concentrated in five states
uneven development
– Special Economic Zones, increased corporate power,
consequences for balanced regional development
Innovation in the culture of innovation:
Challenge for social justice
• Big business interested in using the publicly
funded S&T; not much collaborative R&D
• Changing nature of balance in the ethos of
individuals and institutions (S&T personnel)
• Changing development priorities of the
development administration (infrastructure vs
development)
• Changes in the nature of policy instruments
(systemic policy instruments lacking
(MOST,DOE)
• Mobilization of core constituencies for popular
constructive action
Measures of progress
• Regarding the notions of progress, both the
scientific elites and social movements have been
guilty of neglect and lack of sufficient reflection.
continuing debate on perusal of goals of poverty
reduction, social justice, and sustainability vis-àvis competitiveness
• Within the social movements there exists
considerable confusion today in respect of what to
expect from the S&T due to the poor modernity
notions.
Need for new strategic thinking
• Innovation practice needs to be linked to the goals
of development of productive capacities of rural
and urban poor, social justice and environmental
protection
• Consistent efforts have been missing on the part of
social movements; appropriate bridging
institutions (socio-technical) are not being
strengthened by them to the required level;
• Theoretical gaps in their development thinking are
also coming in the way of design of IS for people
oriented development.
Prospects for new directions in rural
economy: Innovations seeking new carriers
• Vision of agricultural development –ecologically
and socially just agriculture, local economy inputs.
• Development of non-arable wastelands using silvipastoral approach to wasteland recovery which
will include diversification strategy for rural
economy
• Development of local economy as a system in
itself
• Making critical inputs available with this
approach-some ongoing experiments
Technology choices and local
economy development
• Biomass based strategy to augment supply of
inputs for infrastructure industry
• Multiple benefits of shift to biomass and
renewable energy based techniques
 Infrastructure and biomass production becomes an
important avenue for income generation
 Overall reduction in capital cost recovery liability
resulting from adoption of cost effective
technology which also enables use of assistance to
reduce capital cost
Social movements experimenting with
technological planning
• Implementation of a new approach to network
system of technology implementation under the
leadership of rural and urban poor
– (System development) Embedding of ‘System Design’ in local
economy development.
– (User development) Development of ‘Worker Owned Units’ for
the implementation of network system of enterprise.
– (Network formation) Formation of network system of enterprise for
the attainment of economies of scale & scope.
– (Continuous technology improvement) Improvement of technology
& completion of package for the development of viable system
design.
System Design & Development
Choice of Mother Cum Satellite Units
System of Production
N Level: Marketing & Technology Incubation
B Level: Mini Dal Mill and One TPD Oil Units,
Tertiary Processing: Sattu, Besan etc.
M Level: Units for Pulse dehusking, Cattle feed & Seed production
M
S
M
S
S
S
S Level: Drying and Storage Units
M
S
S
S
Alternate policies needed for employment
generating technological transformation
• Realizing employment potential of LEISA &
ecological farming through alternate social
carriers.
• Reducing cost & increasing service area of irrigation systems
through local resource augmentation.
• Reducing energy charges by replacing conventional energy &
materials with renewable energy, biomass and local materials,
use of local labour, biomass and materials based techniques
without compromising performance.
• Motivating Landowners and resource poor to
accept technology shift by using employment
assistance and concessional credit
Challenge of formulation of alternate
policies
• Influence of the democratic movements on the vision of
farmers Commission,
• Challenge of struggle against corporate driven innovations
in agriculture
• Ecological agriculture & wasteland development need
change in the orientation of social movements in respect of
employment guarantee & subsidy pattern
• Restoration of public degraded lands with tenancy rights to
the rural poor & prospects for silvi-pastoral approaches
• Support to down stream post-harvest value added activities
& struggle of food vendors for promotion & incubation.
Transition to alternate path of
development
• This journey of systemic change has to
begin now & in the midst of emerging
environmental degradation, social
deprivation, regional
underdevelopment and ongoing
attempts of technological and
ecological modernization.