Innovation and prosperity

Innovation sets the developed countries apart from underdeveloped ones. By Amit Sharma*.

Globalisation and the phenomenon of outsourcing have led to many countries of the developing world becoming the talk of business circles. CEOs of several large-sized companies in the West are increasingly concerned that unless they develop sound outsourcing arrangements, they might be compelled to pack up.

This has translated into newer employment avenues in other, lower cost countries.

It is estimated that over 100,000 people, mostly engineers, work for the top three Indian IT service giants (Tata Consultancy Service, Infosys Technologies and Wipro).

But as economists point out repeatedly these opportunities in developing countries are simply too small and insignificant to overhaul the entire economy in any real sense. The IT / ITeS services sector contributes only 3.3 per cent to India''s GDP. So while there is the warmth of hope surrounding us, there is also the cold reality lurking in the larger beyond — will the islands of growth that globalisation has created encompass the larger canvass?

The answer, to a large extent, lies in one skill that developed countries are on an average much better at and, which has accelerated and sustainable economic development in the last century — innovation.