India must enter the milieu of innovation for which it must create an endogenous capacity for innovation to move to the upper end of the global economy in the information technology (IT) industry, according to Mr Romi Mahajan, Economist - Technology & Innovation, University of Texas & Associate, Telecommunications & Information Policy Institute, Austin, USA.

Mr Mahajan was delivering the keynote address at a Confederation of Indian Industry (CII-Gujarat) session on Indian Software in the global economy.

For a global presence, the Indian software industry needed some institutional changes and the state, according to Mr Mahajan played an important role in this.

"In the value chain, India is still at the lower end while countries like US and the top end as they are into selling products," said Mr Mahajan.

For creating a milieu of innovation, the state must usher in some institutional changes, promote the circulation of knowledge and look for more product-related work. At the moment, India's edge in the global economy was its low-cost labour, but in the long run and for a larger share of the global IT pie, this is not enough.

Citing an example of the Y2K, Mr Mahajan explained that for one Y2K was episodic, secondly, it was lower end work and labour intensive and finally, India lost a lot of Y2K work to the Philippines who did it at a much lower cost.

"India must be able to create a demand for IT in the country and banking is an industry the focus can begin with," said Mr Mahajan. "One Infosys does not mean India is doing well. We must create global giants in all corners of India. After all technology is empty rhetoric unless it bring change to people," ended Mr Mahajan.

Ms Jayanti Ravi managing director, Gujarat Informatics Ltd., (GIL), the government of Gujarat's (GoG) nodal agency for IT elaborated on the measures the state was taking in the IT sector with particular reference to connectivity. Ms Ravi spoke of the possibility of VSNL setting up an Earth Station in Gujarat, of DoT's Optic Fibre Cable (OFC) which had reached 220 of the 230 talukas and the promise of 1,150 rural exchanges by March 2001. Besides this, she pointed out to the national grid which would be passing through Gujarat, the power grids which pass through Gujarat and the Telecom sector which can boast of such giants as Reliance.

"Technology is adapting so fast resulting in the lowering of costs. Earth Stations we are given to believe can be set up in such low sums as Rs 50 lakh whereas a few months ago it is figures like Rs 5-10 crore," said Ms Ravi.

While Gujarat had the physical infrastructure, the bottlenecks were created by humanware. Social infrastructure, admitted Ms Ravi, was a hurdle such as education for which seats were capacity was being increased in engineering institutes.

The government of Gujarat has also chalked out a separate venture capital fund of Rs 9 crore which had every possibility of being increased to 15 core. This fund was specially for start-up ventures.

Besides this, the setting up of the Wide Area Network in Gujarat, information kiosks, upgrading of PCO's to info-kiosks, a portal website on GoG and training people under chief information officers was all on the GoG agenda, said Ms Ravi.

Mr Madhukumar Mehta, chairman CII Gujarat Task Force on IT, ended the session and spoke of the enabling environment needed to encourage the private sector to participate on a larger scale in the IT industry.

Compiled from local news media