Inspite of having world-class firms and access to FDI, limited rural diffusion of technology hold back overall economic progress in India, says a new World Bank report.

Additionally, India is still grappling with slow adoption and limited penetration of new technologies across all sectors, suggests the report, ‘Global Economic Prospects 2008: Technology diffusion in the developing world.’

The report stresses that the weak diffusion of technology within developing countries holds back overall technological achievement in many countries. For example, in India productivity in small formal-sector firms is only 15 per cent that of top performers.

Key findings

Thus technology progress is an important driver of income growth and poverty reduction which is not showing progressive results, the report notes.  One of the key findings is that progress in developing countries is by absorption of pre-existing technology and not at the frontier innovations. “What matters for India isn’t just the frontier; equally important is the extent to which simpler technologies spread across the entire economy,” said Andrew Burns, main Author of this year’s report.

Also one of the key drivers of technological progress is globalisation, Mr Burns said.The report also  stated some final suggestions, but did not give any specific roadmap for promoting technological progress. Also a second report by World Bank ‘Unleashing India’s Innovation - Towards Sustainable and Inclusive Growth’ was revealed on the occasion.