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The success of developing economies around the world can be attributed to the global competitive advantages that they have been able to build over the years. IT and ITeS have been the engines of Indian economic growth in the past decade or rather our areas of competitive advantage.
Thanks to globalization, we have been able to exploit our cost competitive advantage in some other areas as well. A typical example is that of the Pharma Industry the world over.

Pharmaceutical majors have realized that in order to be competitive in the market they will have to set up manufacturing bases in low cost countries. Partner with them in research and development of new drugs and also take advantage of the market opportunities these nations provide. However, this cost competitive advantage is fast reducing. What we need to focus now is to build quality competitiveness that will make people coming to India stay back even if the cost advantage is neutralized.

In 2006 Geneva World Economic Forum, India moved up two places and was ranked 43rd among the most competitive economies in the world while Switzerland replaced USA at the top of the list which fell to the 6th position. Surprisingly, China suffered a fall from the 48th to the 54th position. According to this report, India scored well in areas of capacity for innovations and sophistication of firms' operations. India also managed to get credit in area of quality scientific research and increasing number of scientists and engineers. This has increased the flow of highly-skilled professionals to the private sector, according to the report.

The report also shows the areas where we have performed poorly such as weakness in coverage of educational opportunities and poor quality infrastructure. This is where the problem of inequitable distribution of benefits of high growth rates arises. It is clearly visible that some regions prosper more than the others leading to lopsided development. Another problem faced by India and China is that of low penetration of latest technologies as per international standards, which reflects low per capita income and high incidences of poverty.

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* Contributed by: -
Aadarsh Himmatramka, an M.Com. from Mumbai University, worked as Marketing Assistant with Pentafab Textiles Pvt. Ltd. for a year, and is currently a student of PGP2 at BIM, Trichy.