Technological Capability, Employment Growth and Industrial Development: A Quantitative Anatomy of Indian Scenario

Singh, Lakhwinder and Shergill, Baldev Singh (2009): Technological Capability, Employment Growth and Industrial Development: A Quantitative Anatomy of Indian Scenario.

Abstract

The recent spurt of economic growth in India has been described as ‘jobless growth’. In this paper an attempt has been made to examine the question of when industrial development provides required dynamism for generating desired employment opportunities for labour force and when it does not. An industrial technological capability based approach has been adopted to analyse the Indian Industrial development experience during the period 1980 to 2005, which is a quarter century time period. The main finding that emerged from the empirical evidence is that the medium-high-tech industries have shown dynamism in terms of generating employment growth. The labour market regulation view put forward by various scholars supporting the liberalisation policies could not stand the scrutiny of clear demarcation among job creating and job destroying industries under the same circumstances. The relationship between industrial technological capabilities and employment growth turns out to be ambiguous. This implies that weak technological capabilities adversely affect employment growth and heavy dependence on imported technological know-how from the developed countries is labour displacing. It is thus suggested that developing countries should invest both in institutions and industrial firms to develop technological development that suits to resource endowment, specificities of local conditions and suitable to the stage of industrial development. There is a dire need to explore alternative paths of industrial and technological capability development to sustain economic transformation process for achieving prosperity and reducing the time for catch-up development.

• Item Type: MPRA Paper
• Language: English
• Keywords: Industrial development, jobless growth, technological capabilities, employment elasticities
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O25 - Industrial Policy; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; J - Labor and Demographic Economics > J0 - General > J01 - Labor Economics: General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology

References

Abraham, V. (2009) “Employment Growth in Rural India: Distress Driven”, Economic and Political Weekly, Vol. XLIV, No. 16: 97-104.

Amsden, A. H. (2004) “Import Substitution in High-Tech Industries: Prebish Lives in Asia!”, CEPAL Review, Vol. 82, April:75-89.

Amsden, A. H. and R. Van den Hoever (1996) “Manufacturing Output, Employment and Real Wages in the 1980s: Labour’s Loss Until the Century’s End”, Journal of Development Studies, 32 (4):

Audretsch, D. B. and A. Roy Thurik (1999) Innovation, Industrial Evolution and Employment, Cambridge: Cambridge University Press

Commission of the European Communities (1994) Growth, Competitiveness, Employment: The Challenges and Way Forward into the 21st Century-White Paper, Luxembourg: Office for Official Publications of the European Communities.

Edquist, C., L. Hommen and M. McKelvey (2001) Innovation and Employment: Process Versus Product Innovation, Cheltenham: Edward Elgar.

Fallon, P. R. and R. E. B. Lucas (1993) “Job Security Regulations and the Dynamic Demand for Industrial Labour in India and Zimbawe”, Journal of Development Economics, Vol. 40: 241-75.

Goldar, B. N. (2009) “Trade Liberalisation and Labour Demand Elasticity in Indian Manufacturing”, Economic and Political Weekly, Vol. XLIV, No. 34: 51-58.

Government of India (2009) Economic Survey 2008-09, Oxford University Press, New Delhi

Hasan, R., Devashish Mitra and K. Ramaswamy (2007) “Trade Reforms, Labour Regulations and Labour-Demand Elasticities: Empirical Evidence from India”, Review of Economics and Statistics, Vol.89, No. 3: 466-81.

Kannan, K. P., and G. Raveendran (2009) “Growth sans Employment: A Quarter Century of Jobless Growth in India’s Organised Manufacturing”, Economic and Political Weekly, Vol. XLIV, No. 10: 80-91.

Lee, K. (2009) “How Can Korea be a Role Model for Catch-up Development? A Capability-based View”, Research Paper No. 2009/34, World Institute for Development Economic Research, United Nations University, Helsinki.

Mazumdar. D. (2003) “Trends in Employment and the Employment Elasticity in Manufacturing, 1971-92: An International Comparison”, Cambridge Journal of Economics, Vol. 27:563-582.

Morawetz, D. (1974) “Employment Implications of Industrialisation in Developing Countries: A Survey”, Economic Journal, 84 (335): 491-542.

Nagraj, R. (2000) “Organised Manufacturing Employment”, Economic and Political Weekly, Vol. 35, No. 38.

Papola, T. S. (2009) “India: Growing Fast. But also Needs to Industrialise!”, Indian Journal of Labour Economics, 52 (1): 57-70.

Papola, T. S. (1994) “Structural Adjustment, Labour Market Flexibility and Employment”, Indian Journal of Labour Economics, Vol.37, No. 1.

Papola, T. S. (1991) “Industry and Employment: Recent Indian Experience” ISID Foundation Day Lecture, Institute for Studies in Industrial Development, New Delhi.

Ray, A. S. (2009) “Emerging Through Technology Capabilities? Analysis of India’s Technological Trajectory”, in Manmohan Agarwal (ed.) India’s Economic Future: Education, Technology, Energy and Environment, New Delhi: Social Science Press.

Rifkin, J. (1995) The End of Work, New York: G. P. Putnam’s Sons.

Sen, Kunal (2008) “International Trade and Manufacturing Employment Outcomes in India: A Comparative Study”, Research Paper No. 2008/87, UNU-WIDER, Helsinki, Finland.

Singh, Lakhwinder (2004) “Technological Progress, Structural Change and Productivity Growth in the Manufacturing Sector of South Korea”, World Review of Science, Technology and Sustainable Development, 1 (1): 37-49.

Singh, Lakhwinder and Anita Gill (2002) “Post-Reform Employment Growth in the Organised Manufacturing Sector of India: A Disaggregative Analysis”, Manpower Journal, Vol. 30, No. 1: 87-98.

Szirmai, A. (2009) “Industrialisation as an Engine of Growth in developing countries 1950-2005”, UNU-MERIT Working Paper No. 2009-010, Maastricht Economic and Social Research and Training Centre on Innovation and Techology, United Nations University, Maastricht, The Netherlands.

UNCTAD (2005) World Investment Report: Transnational Corporations and the Internationalization of R&D, New York: United Nations.

Van der Hoeven, R. and L. Taylor (2000) “Introduction: Structural Adjustment, Labour Markets and Employment-Some Considerations for Sensible People”, Journal of Development Studies, 36 (4).