N. S. Siddharthan

Human Capital, Labour Productivity and Employment

This paper analyses the importance of human capital in determining the inter-state differences in labour productivity and its growth in India. The paper also examines the impact of human capital differences on the growth of employment for a cross section of Indian states for the period 2003- 2007. It argues that the current technology is human capital and knowledge intensive and cannot be used in the absence of skill development. Due to the presence of skill bias in the new technology, persons with less education would become victims. The panel model results of Generalised Least Squares using cross section weights show that after controlling for other determinants, variables representing human capital emerge significant determinants of productivity. Furthermore, higher enrolments in high schools not only contribute to higher labour productivity but also to higher growth in productivity. In addition, states that have higher high school enrolment rates have been enjoying higher growth rates of employment. On the whole the results presented show strong skill bias in productivity and employment growths across states.

Introduction to innovation and global competitiveness: case of India's manufacturing sector

In the post-liberalization period, India has slowly but steadily tried to foster innovation to boost global competitiveness of the industrial sector. Since innovation in Indian industries for a long time has been supported by adaptation, assimilation and incremental changes on technology transferred from overseas, reforms smoothened the progress of the inflow of foreign direct investment (FDI). Several efforts were made to facilitate technology paradigm and technology trajectory shifts, in order to improve competitive efficiency of Indian manufacturing so that they could become globally competitive. FDI was looked upon as a major source of technology paradigm shift for Indian manufacturing, especially since the research and development (R&D) intensity of majority of the firms in the manufacturing industry has been very low (less than 1%) for long period of time. Industries where R&D intensity has been higher than the national average have looked for opportunities to world markets and earned the crucial foreign exchange (Kumar 2002). Firms in Indian manufacturing industries have also attempted to bring about technological upgradation through imports of design and drawings (disembodied technology) against lump sum, royalty and technical knowhow fees, and imports of capital machinery (embodied technology), where the technology is embodied in the capital good itself. The in-house R&D efforts were often directed to adapt the imported technology to suit the local resource and market conditions. The role played by innovation in determining global competitiveness of Indian industries has been well researched (Kumar and Siddharthan 1994; Siddharthan and Nollen 2004). Most of them report a strong positive role for technological efforts (representing innovation)] in decision to export as well as boosting export intensity (proxy for global competitiveness, Bhat and Narayanan 2009). One of the major conclusions that emerges from the literature is that the impact of FDI on export performance of industries will vary not only with respect to the conditions specific to the host economy but also according to the types of industries that FDI enter (Bhaduri and Ray 2004). Studies of the Indian economy have found that majority of the FDI in India may not have entered the export-oriented industries and therefore could have little impact on the exports of India (Aggarwal 2002). During initial stages of liberalization, Indian firms depended mainly on technology spillovers for survival (Kathuria 2002). However, in recent times, some of the Indian firms have increased their productivity, some times higher than that of developed-country MNEs. Furthermore, industrial firms from India have been investing overseas, even in countries to which they were exporting until then,

Innovation and Global Competitiveness: Case of India's Manufacturing Sector

1. Introduction to innovation and global competitiveness: case of Indias manufacturing sector N. S. Siddharthan and K. Narayanan 2. R&D intensity and exports: a study of Indian pharmaceutical firms Bishwanath Goldar 3. Mergers and acquisitions, technological efforts and exports: a study of pharmaceutical sector in India Vidhisha Vyas, K. Narayanan and A. Ramanathan 4. Innovation and competitiveness among the firms in the Indian automobile cluster Rahul Z. More and Karuna Jain 5. Influence of outward-foreign direct investment and technological efforts on exports: Indian auto component firms Neelam Singh 6. Technological determinants of firm-level technical efficiency in the Indian machinery industry Pradeep Kumar Keshari 7. Exporting by Indian small and medium enterprises: role of regional technological knowledge, agglomeration and foreign direct investment Jaya Prakash Pradhan and Keshab Das