ICT Growth and Diffusion: Concepts, Impacts and Policy Issues in the Indian Experience with Reference to the International Digital Divide

Abstract

This chapter examines the role of technology in economic and social development in developing countries, with a particular emphasis on India as an example. The concepts of ICT growth and ICT diffusion are examined. From this the chapter reviews the Indian government’s successful policies encouraging ICT Growth through the support of the export-oriented service industry. This industry has witnessed long-term growth primarily as the result of the increasing tradability and consequent internationalization made possible by changes in ICTs. However, the export focus policy has created enclaves within the Indian economy without significant forward and backward linkages. Evidence suggests that the International Digital Divide may be increasing. This chapter suggests that in order to maintain its relative technological position and to increase its comparative advantage in the IT sector, government policy should focus on domestic ICT Diffusion. The chapter reviews several local public, private, and public-private initiatives to spread the use of ICT throughout Indian regions that have been successful and may serve to offer examples for future development. We conclude that ICT-driven development may be achieved with supportive central government policies, lessening the International Digital Divide.