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 agro-biodiversity, 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-à-vis 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 silvi-pastoral 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 & DevelopmentChoice of Mother Cum Satellite Units

System of ProductionN Level: Marketing & Technology Incubation

B Level: Mini Dal Mill and One TPD Oil Units, Tertiary Processing: Sattu, Besan etc.

M M M

SS S

S S S

S

M Level: Units for Pulse dehusking, Cattle feed & Seed production

S Level: Drying and Storage Units

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.