Needed a Policy Framework in Step With Technology

Context: An holistic industrial policy framework inclusive of the tangible and intangible component could attract greater investment and capital formation.

Role of Information based Technologies in Industries:

• Blurred the boundaries between goods and services: By virtue of Moore’s law, computing capabilities have surged faster than capabilities in traditional industries.
• Data as the new currency powering economies: a paradigm shift in which the amount of “value adds” from intangible technology services is being transformed by information.
  • For E.g. Modern automobile has 40% of its component value from electronic-based products.
• Influences skillset: Increasing digitization and electronification of industrial activities, products and services, influences the evolving skill sets in the industry.
• Increases efficiency and value accretive: for customers by providing greater control over the product and its surrounding environment.

Issues with current industrial policy framework:

• Departmentalization: Departments have a tendency to operate in silos. For E. Drones for use in agriculture require a lot of inter-departmental clearances outside of the Department of Agriculture.
• Focused on manufacturing: Industrial promotion policies in India look at encouraging capital formation from a manufacturing perspective.
  • For E.g. Increasing digitization of the automobile are not covered by industrial policies that govern the Electronics and Information Technology Ministry.

Way Forward:

• Develop Inter-departmental cooperation and synergy: is needed not only in policy framework but also in deployment.
• Encourage capital formation by way of intangibles: in traditionally tangible industries.
  • Ensure a nourishing ecosystem for industry: including the hard infrastructure and softer areas such as education, skilling, technical institutions, laboratories and testing centres.
  • Encourage the creation of clusters of companies: in complementary areas for ensuring multi and cross-disciplinary learning and spurring innovation and economic development.
• An Empowered Policy Clearing Cell: could ensure a holistic view on policy across departments of State and Central government.