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It could truly be a good idea to have knowledge based economy for development and on the second thought it might appear an overhyped thought. The transition of the global economy from agriculture based economy to Industry based economy and the efforts to gradually make it knowledge based economy recently would make the economy evolve a great deal. It has helped the global economy to get driven by much sounder means like intellectual acumen, knowledge, advanced skills and innovation than natural resources and availability of cheap labor which are much less reliable resources.
Knowledge Based Economy: Background
The knowledge driven economy focuses on products and services fueled by knowledge intensive activities. Knowledge economy makes use of knowledge and information to create goods and services. It requires skilled workers with sound analytical abilities and command on their subjects that can manipulate information and are research and innovation driven.
India: Taking Steps to turn into Knowledge Based Economy
With the advent of the Digital India program, India declared its vision to quickly transform itself into a digitally empowered society and a knowledge based economy. Despite being an essentially, agriculture based economy, India realizes the prospect of changing times and developing technology, and it is high time for India to look into this prospect much more seriously as it can’t put pressure of the massive population on agriculture or manufacturing alone.
Knowledge Based Economy: Benefits for India
- India with the onset of globalization, gigantic youth population and massive growth in IT sector perfectly fits the bill for evolving into a knowledge based economy. It will help in creating new better paying jobs, good infrastructure and technology upgrade.
- The knowledge based economy uses modern Information &Communication Technologies principles, innovation and research, specialized skills to create, disseminate and apply knowledge. It works towards reducing poverty through inclusive economic growth.
- All the leading developed countries like USA, Japan, South Korea, France have either migrated or migrating towards Knowledge economy in order to make the most of their resources and brightest minds.
- Indian Economy will rely more on intellectual capabilities than on physical inputs or natural resources. The overall ability of employees acts as the business product as well as the asset. It promises to be more stable than the other two forms of economy.
- With the advent of newer and advanced technologies like Artificial Intelligence (AI), Machine Learning (ML) and Internet of Things (IOT), conventional manual jobs would easily get replaced. Newer jobs requiring specialized skills will be created. Therefore, Knowledge economy is the way ahead for India as well as the globe.
- Knowledge economy will foster the ever growing entrepreneurial spirit among the Indian people. It will help in establishment and growth of many startups especially service based startups and IT focused startups.
- With Earth’s depleting natural resources and value of typical manual labor going down. An economy that relies on knowledge, innovation and problem solving abilities only makes much sense.
- Successful places or trade zones where Knowledge based economy has thrived are -Silicon Valley in USA, Aerospace and Automative Engineering industry in Munich, Germany. Electronics and Digital media industry in Seoul, South Korea and Biotechnology industry in Hyderabad, India they are also successfully working in Knowledge based Economy model.
- A shift to Knowledge based economy is required for India since with changing times it is comparatively advantageous in Labor intensive and Capital intensive markets which are fading.
- New technologies most notably, Robotics and increasing stress on resources like water and energy, have emerged as threat to India’s competitive edge. A proper shift to knowledge based growth will allow India to rise over the problems of middle income trap and income inequality.
India Not Ready for Knowledge Based Economy
- It is no mystery that a great portion of Indian economy is still labor intensive. India has a huge amount of unskilled labors and untrained workers, thus, a sudden migration to knowledge economy will prove disastrous for this class of people which forms a major chunk of the Indian population.
- India’s education and education system is still not upto the mark for it to become a Knowledge economy. India doesn’t have the right amount of highly skilled professionals mainly because of lack of skill based trainings and academics focused on rote learning than thinking abilities and innovation.
- Many things with coordinated activities are required for Knowledge based economy. These could be coordinated government policies coupled with investment in ICT, better education, skill focused training and a culture of research and innovation with stress on being intellectually strong. India is far from achieving all this at a mass level.
- An abrupt transition to Knowledge based economy is likely to cause problem like mass unemployment which a developing nation like India can’t afford to bear.
- Requirement of a network of Information and communication Technology infrastructure is a must. India with 26% illiteracy and 7.6% unemployment rate and still having 32 million homes without electricity has a long way to go in this regard.
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Way Ahead for India to become Knowledge Based Economy
The Industrial Revolution didn’t end agriculture as people still have to eat. Similarly, Knowledge Revolution cannot undermine the importance of industries as people still need physical goods. Thus, Knowledge Economy in India must be paired up with sound agricultural and sustainable industrial growth, only then it can benefit India all round.
It is said, ‘Failing to plan is planning to fail’, it might just be the case if precise planning and proper execution is not followed to develop India into a Knowledge based economy. It is a good idea yet its pre-requisites are plenty which if we fail to meet can easily turn the good idea into a bad one.
India, with its youthful population and tremendous potential in Information and Communication Technology has the ability to transform itself into a knowledge based economy if it manages to overcome the barriers that lie in the way. Regulatory, education and infrastructure when transformed can easily see India transform into a Knowledge based economy.
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