COPING WITH TECHNOLOGY DIVERGENCE POLICIES AND STRATEGIES FOR INDIA INDUSTRIAL-DEVELOPMENT

Recent studies on innovation have demonstrated the relationship betwee n technology and growth. However, as most of them are centered on the experience of the highly industrialized nations, a different approach to technology policy must be taken. As late industrializers, developin g countries lag in adopting foreign technologies. Institutional factor s and economic policy also influence the diffusion process. With decen tralized decision making, the coexistence of diverse technologies in a given industrial branch is inevitable. Consequently, social costs ten d to be high because of duplication of efforts, reduced learning oppor tunities, and adoption of inefficient technologies. This article exami nes the coexistence of diverse technologies leading to technology frag mentation in India's steel industry. Recent innovative behavior in the Japanese and Korean steel industry indicates that the effects of frag mentation can be contained through a policy of ''system integration.'' This is an institutional process by which industry-specific applicati ons of scientific knowledge are fused with basic research itself. This demands a forward-looking policy that rejuvenates older industries, s uch as steel, in socially acceptable ways and organically creates new knowledge for national development and social welfare. (C) 1998 Elsevi er Science Inc.