ICT Diffusion for Economic Growth and Sustainable

Development of SMEs: A Powerful Tool for reducing Spatial

Disparities and enhancing Opportunities for development in
India*

Madaswamy Moni@

Mission: Distributed and Mobile Computing for Rural

Prosperity

*Presented at the Workshop on Distributed and Mobile Computing organized by Department of Information
Technology, Madras Institute of Technology, Anna University, Chennai , March 2005.
@
Deputy Director General, National Informatics Centre, Department of Information Technology, Ministry of
Communications and Information Technology (Government of India), New Delhi – 110 003. e-mail: moni@hub.nic.in;

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 1. Introduction

1.0 Globalization and liberalization are increasingly shaping the

international economic system, which present both threats and
opportunities for Developing Countries. Globalisation is being
argued as a positive force for poverty reduction but, in fact, is
remaining as a theoretical model in many developing countries.
The realization of the importance of Information and
Communication Technology (ICT) in economic development, led the
UN Commission on Science and Technology for Development
(UNCSTD) to devote the years 1995-1997 to the study of the
linkages between ICTs and Development. Information &
Communication Technology (ICT) has provided the technological
base for globalization, but followed the old pattern of unequal
development resulting in the digital divide1. This digital divide has
shaped, among the others, the flow of information and knowledge
in the world:-
• Creation of technologies (- IPR Divide)
• Diffusion of recent Innovation (- Digital Divide)
• Diffusion of old Innovation (- Extension Divide), and
• Diffusion of human skills (- Educational skills)

1.1 Information Concepts and Technologies are changing very

rapidly and the economic importance of “information” has grown
steadily. Information is a vital resource and has its applications in
rural, agricultural, social, and industrial development, immensely.
The extent of the use and application of scientific, technical and
social information to advance development, determines the
progress of a Nation. Informatics Networks, besides Computer
Networks, are increasingly considered as development tools for
achieving:

• Reaching the Unreached : Public Services

1 Digital Divide - Unequal access to information and communication technologies (ICTs) .

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 • From Digital Divide to Digital Opportunities for sustainable
development and economic growth.
• Fostering agricultural growth, poverty reduction and sustainable
resources use.
• Sustainable Development & Earth Care Policies in the areas of
Water, Energy, Education, Health, Agriculture & Rural Development,
Biodiversity.
• A Cluster of Villages - Sustainable Societies in Viable Rural Space.

1.2 The major problems faced by the Country are unequal

distribution of resources, poverty due to acute unemployment,
bonded labour, child labour, lack of social security, non-
exploration and utilisation of traditional and natural resources
for both employment and setting up of industries. Among various
sectors, SMEs constitute the 2nd largest sector in employment
generation and constitute almost 40 – 50 % export annually. Our
economic and industrial growths are dependent on production and
productivity in agricultural sector. “Networking of People” and
“Networking of Information” through localization are essential.
One of the major problems of using ICT for rural prosperity is
language barrier i.e. “localization”.

2. ICT & Governance: Models of Digital Governance

2.0 Models of Digital Governance (e-Governance) are

continuously evolving and improvising to harness the potential
offered by the Information and Communication Technologies
(ICTs) and deal with new realities in the area of governance.
There are no rigid and finite models of Digital Governance. In
fact, several developing countries are putting into practice
innovative e-Governance models that may technologically simple
but are changing the way information is distributed in the
society. Based on primary experimentation and secondary
research, a few generic models (http://www.digital

3
governance.org), which have emerged and are being practiced,
have been identified, on the basis of: emergence of knowledge
societies and knowledge networkers, role of information in
governance process, and link between ICT and governance, are as
follows: -
• Broadcasting / Wider-Dissemination Model: National and Local
Governments in developing countries need to aggressively adopt this
model if they want to enhance participation of citizens in the
governance processes.
• Critical Flow Model: Different organizations can use it differently
depending on the aspect of governance they want to address. By
focusing on the critical aspect of information and locating its
likeable users, the model corrects information failure, raising
awareness about the bad governance practices, and acts as a
hindrance to bad governance practices.
• Comparative Analysis Model: Developing countries could very
effectively use this comparative model as ICT opens their access to
the global and local knowledge products at a relatively low-cost. The
model however becomes ineffective in absence of a strong civil
society interest and public memory that is essential to force
decision-makers to improve existing governance practices.
• E-Advocacy/ Lobbying and Pressure Group Model: The model
enhances the scope of participation of individuals and communities in
debates, which affect them and help them, build a global alliance.
• Interactive-Service Model: The potential of ICT for the
governance is fully leveraged in this model and leads and can bring
lead to greater objectivity and transparency in decision-making
processes. This Model facilitates establishing decentralized forms
of governance (G2C2G or G4C4G).

2.1 Over the past decade, many have cited the international
information superhighway or the Internet, as the means by which
the concept of a global village2 could be realised. India’s
Broadband Policy (2004) envisages facilitating “using internet
towards doubling per capita rural GDP in ten years “. ICT has
broadened our definition of poverty3 also, as it has a place

2 Global Village is a vision of a future in which, every citizen of the Planet Earth experiences
life-- personal, professional, cultural and social -- as a member of a virtual village.
Hans d’Orville : “IT for Development Programme”, UNDP
3

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alongside with adequate food, health care, education, and other
fundamentals for livelihood security. Most discussions on digital
technologies: “Technology for Development” or “Development of
Technology”, were couched in optimistic versus pessimistic
perspectives (Hamelink, 1997)4 – “expanded productivity”,
“improved employment opportunities”, “improved democratic
process”, “reinforce historical trends towards socio-economic
disparities” and “inequalities”, etc. However the guiding principles
of designing ICT for development projects are: -

• Focus on the Disadvantaged Communities, who otherwise will be

excluded
• Provide that information or service which otherwise will not be
provided
• Focus on utilizing and where possible building upon what is
existing rather than thrusting a new intervention
• Create an outcome which in absence of ICT, will not be produced
efficiently or timely
• Understand the difference between direct benefits and trickle-
down benefits for the disadvantaged community.

3. Digital Economy and Development: A Myth or Reality

in Developing Country?

3.0 A global economic transformation - digital economy5 - is now

intensifying and leading to a rapid economic growth. Internet
Technology and other new enabling technologies have facilitated
companies to integrate and maximize changes (i.e. restructuring,
business-process standardisation, enterprise resource planning,
etc.) during 1990s. Virtually, all Information & Communication
Technology (ICT) investments have become a part of inter-linked
communication systems, whether Organisation (internal) to a
business (O2B), between businesses (B2B), between individuals

4
C. J. Hamelink: “New information and communication technologies, social development and cultural change”, DP 86,
United Nations Research Institute for Social Development, Geneva, June 1997, p. 27.
5 Digital Economy – Information (0s & 1s) Management and Movement

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and business (B2C), and individual to individual (C2C). The rate of
change is just as rapid as ever, and the direction is irreversible.
Software Industry is the world’s most critical industry and will
be of “the same status” for years to come. The major
characteristics of today’s business opportunities include:

• Time-to-market (less and hence quick production)

• Increased productivity due to ICT and Computers
• The “weightless economy” – increased valuation of
intellectual property – displacing oil, gas, and other types
of durable or physical goods from the old economy as the
primary means of making money
• Globalization, Liberalisation and Privatisation
• Consolidation – Global Mergers and Acquisitions

3.1 Internet Commerce (e-Commerce) is growing fastest among

businesses and four types of economic activities drive its growth
(i.e. formation of Free Trade Zone on Internet):

• building up the Internet

• e-Commerce among Businesses
• digital delivery of goods and services
• Retail sale of tangible goods.

3.2 This has led to a growth of supply capacity through capital-

augmenting technological change, which in turn, changed the
capital and labour markets, and has generated greatest demand in
the following areas: Web Services Development, User Interface
Design, Business Domain Expertise, Security Expertise, and
Mobile Application Development. XML (eXtensible Markup
Language) standards bodies such as BizTalk, cXML, and
RosettaNet are working to develop the syntax for XML that will
streamline and enable B2B Commerce, using a standards-based
approach, which will align Supply Chain Management (SCM) on a
global basis.

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3.3 In today’s economy, finding ways to leverage technology and
services to be more efficient, reduce costs, and develop
flexibility to respond rapidly to the changing market, is critical
for survival. Value Chains6 are today being perceived as the next
logical step for enterprises in order to cut costs and increase
Return-On-Investment (ROI) in terms of: Return-On-Process,
Return-On-Knowledge, and Return-On-People. Integrating
disparate applications on the “Process and Data” level is one of
the greatest challenges in Value Chain Integration. While
vendors are gearing up with process integration capabilities,
harnessing the tools’ capabilities is tied to the ability to design
efficient business processes.

3.4 Value Chain Markup Language (VCML)7 is a comprehensive

set of XML-based, industry-specific vocabularies8 (words and
meanings) and documents required to conduct business over the
Internet, allowing for the integration of Supply Chain (SC) and
Demand Chain (DC) resulting in true Value Chain Collaboration
over Internet. VCML vocabularies are currently based on
industry-specific implementations of ANSI X12 and EDIFACT/
EDI, and adoption of VCML is a sound interim step, in moving
from standards such as EDI towards emerging B2B standards
such as ebXML (e-Business XML).

3.5 Various international and regional organisations such as

APEC, WTO, OECD, G-8 Nations, ITU, EU, UN, World Bank,

6
Value chain is a high-level model of how businesses (production and services) receive raw materials as input, add
value to the raw materials through various processes, and sell finished products to customers; and spans vertical
and horizontal relationships within and across industries: Production Æ Exchange Æ Distribution Æ Consumption
7 Ref: http://www.vcml.net/resources/overview.xml
8 A vocabulary is a collection of business terms and their associated meanings as they relate to their use in

business. Each industry, as well as each company within an industry, has a vocabulary in which they conduct
business.

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WIPO, ISO etc., have attached much importance on the potential
for international e-Commerce over the Internet. WTO has largely
addressed e-Commerce under “trade in service”, where as Trade
facilitation is being handled by GATT. However, the growth of e-
Commerce has overtaken the pace of development of regulatory
mechanisms and philosophy. North-South digital divide may
possibly widen, unless the issue is addressed realistically and e-
commerce is used as a tool for involving more enterprises and
institutions.

3.6 In the present “crucial decade” of this millennium, a high

rate of investment in Information Technology capital and a
supportive environment are expected to achieve “digital
economy”. Its rapid growth however depends on9 :-

• A higher rate of productivity growth related to

investment in Information Technology;
• A rise in Total Factor Productivity (TFP) growth due to
Information Utilisation across the economy and resulting
in “spill-over” effects;
• An increase in factor utilisation; and
• A decline in the non-accelerating inflation rate and rate
of unemployment.

3.7 As the world economy is being integrated through ICT,

developments policies need to be rethought to help developing
regions with in a country connect to the new information-based
world economy, i.e. digital economy.

9
M.Moni (2000): “New Productivity Paradigms and Strategies in the e-Age – Government Initiatives on IT-led
Development in India”, International Conference on Productivity in the e-Age, Asian Productivity Organisation, 22-
24 November 2000, New Delhi.

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 4. ICT Diffusion: A Sine que non for Productivity
& Growth

4.0 Various study results strongly support that the “payoff”

effect of ICT on economic growth can be achieved only through a
robust National Information Infrastructure (NII) that supports
ICT adoption and application. ICT diffusion derives economic
force from the complementary development of a knowledge-
intensive society(Eunice Wang, 1999)10. The diffusion of ICT
throughout all sectors (primary sector, secondary sector and
tertiary sector) is, therefore, far more important than the
production of ICT industries per se, to usher in economy growth
and development based on “digital technologies”. India is
expected to gain from the “emerging Digital Economy”, as it has:

• affordable access to core information resources, cutting

edge technology and to sophisticated telecommunication
systems and infrastructure;
• the capacity to build, operate, manage, and service the
technologies involved;
• policies that promote equitable public participation in the
information society as both producers and consumers of
information and knowledge; and
• a work force trained to develop, maintain and provide the
value-added products and services required by the
information economy.

4.1 Indian ICT Industry has tremendous potentials to become

an engine of growth and productivity improvement for all
sectors of the economy and for the country as a whole, with
special emphasis on multi-lingual technologies11. Research studies

10 Eunice Wang (1999) : ICT and Economic Development in Taiwan : Analysis of the Evidence”,
Telecommunications Policy, 23(3,4), April/May 1999, pp235-243
11 Annual report of the Ministry of Information Technology, Government of India, 1999-2000

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in the 1990s confirm, “While the full economic impact of
Information Technology cannot be precisely evaluated, its impact
has been significant”12. It is a well-established fact that: “there
exists a complementarity relationship between Information
Technology and Productivity”. Productivity implies the effective
and efficient use of resources: labour, Capital, land, materials,
energy, time, information, etc.

4.2 Innovation is one of the keys to success in a knowledge-

economy (k-economy) and it is R&D that determines innovation.
St. Thiruvalluvar, the Poet and a Philosopher from South India
(Tamilnadu) who belongs to the first century B.C. (31 B.C.), states
that “Knowledge guards one against distress” (“Arivu Attram
Kakkum Karuvi” - Thirukkural 43:421), and that “the Wise have
everything” (“Arivudaiyar Ellam Udiayar” - Thirukkural 43:430).
The economist, Joseph Schumpeter, defined in 1912 in his book,
(the Theory of Economic Development) that innovation comes
from the "Neuer Kombinationen", New Combination. The concept
is still alive today. In the words of the knowledge scholar
Takeuchi, "in an economy where the only certainty is uncertainty,
the sure source of lasting competitive advantage is knowledge".
The focus of industrialized economies is surely shifting from
natural resources to intellectual assets, whereas the agricultural
economies are shifting to sustainable natural resources
consumption, conservation and management.

4.3 The innovation process is a Value Chain and Research is the

sine qua non of innovation (Knowledge Value Chain). In this
process, the role of Technology Business Incubators (TBIs) as
part of the system of innovation has become all the more

12
The United States of America (Department of Commerce) (1997) : “The Emerging Digital
Economy” http://www.ecommerce.gov

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important for transformation of technological ideas into
commercial benefits. Rapid emergence of knowledge-based
economies required a paradigm shift in technology transfer
services from traditional (i.e. horizontal company-to-company
transfer of commercialized technology through a worldwide
network of technology brokers) to Internet and vertical transfer
of technology from R&D laboratories to industries.

4.4 IT Enabled Services (ITES) market – a sunrise industry

for next 15 years - is expected to touch Rs 81,000 Crores by
2008, generating direct and auxiliary employment for two million
Indians. India is a sustainable destination for ITES but a lot
more needs to be done to leverage off and maximise the
opportunity that this segment represents for India’s economic
development and prosperity i.e. a sustainable competitive
advantage (Arun Seth, 2002)13. Research findings of recent past,
by international consultancy firms (Forrester Group, McKinsey &
Co, Giga Information Group) re-endorsed India's prowess in this
field.

4.5 Studies on indicators of technology-based competitiveness

indicate that India has a high standing in terms of the
institutions and resources that contribute to a nation's capacity
to develop, produce, and market new technology. The employment
dynamics in Information Economy, as categorised below, can move
the “Value Chain up in India” to attain “Win-Win-Win” situation,
if appropriate researched policy guidelines are available:

(a) The Indian software industry not recognised that well for its products
(Product Software) but more for its services (Project Software):

13Arun Seth (2002) : “Destination India”, Economic Times, March 27, 2002 & Managing
Director, BT Worldwide (India & SAARC) and Head of the Call Centre Forum at Nasscom)

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 (b) Economic value of software production through projects (Software
services) in the global market higher than that of software production
through products (Software Products).
(c) As the IT Enabled Services (ITES) Industry moves up the maturity
curve in India, it is facing new challenges with the changing pricing
models demanded by the client companies (i.e. no more a fixed time
employee - FTE – model).
(d) ITES industry as a “lighthouse industry”, as the next 15 years would
belong to ITES; ITES is the brass ring that India will grab it.
(e) Long Term Business Models (LTBM), for India IT Services Enterprises,
emerging in India: - Global Contract Manufacturing, Global Systems
Integrator, IP-led Service Player and Sliver focussed Service provider,
to grow in the changing business environment;
(f) Despite low production and labour costs, India’s inability to compete with
Thailand, Korea and the Philippines, in “e-games” segment;
(g) Need to develop R&D, design and engineering capabilities while
participating in leading edge technologies;
(h) Target 2008: IT Services to be 7 Per Cent of GDP and 30 Per Cent of
India’s Foreign Exchange Inflows, and create 4 Million Jobs.
(i) Indian IT Sector is on track of achieving its ambitious goal of over $50
Billion exports by 2008 despite depressed economic scenarios and
marked slowdown in the growth of industry during the last two years
(NASSCOM-McKinsey Study-2002)

4.6 A recent Price Waterhouse Coppers (PWC) study report,

however, reveals that the most interesting shift has come in the
form of "management consultancy firms” providing “IT solutions”
and “Indian IT services companies” pitching for “consultancy
assignments” to grab a larger spectrum of the IT Value Chain.
This is not advisable, as it is not going to be advantageous to
India in the long-term. India should concentrate on “core
process” and “stay for years” together to get maturity and
digital dividends through “pervasive ICT diffusion in all aspects
of production and services”.

4.7 Small & Medium Enterprises (SMEs), which are a crucial

part of their economy in terms of employment as well as growth,
are at crossroads now. While developed countries have already
taken a lead in this direction, developing countries have yet to
fully exploit this system particularly to invigorate Small &

12
Medium Enterprises (SMEs), which are a crucial part of their
economy, in terms of employment as well as growth (Jürgen
Bischoff, 2001)14.

5. ICT Diffusion: A Value-Up-Chain for SMEs in

India

5.0 The challenge for entrepreneurs is to think about creating

solutions for the twin engines of future growth – Rural India and
SMEs. Cluster approach has been one of the spatial policies for
infrastructure development of SMEs. Other approaches (non-
Cluster) included Industrial Estates, Industrial Growth Centres,
Export Processing Zones, Industrial Parks, Integrated
Infrastructure Development Centres and National Programme for
Rural Industrialization. This SME category will also include, for
the purpose of this paper, these categories of industries also:
SSEs – Manufacturing and service oriented Units, SSIs, Ancillary
Undertakings (AUs), Exports Oriented Units (EOUs), Women Enterprises
(WEs), Small Scale Service Business oriented (Industry Related) Enterprises
(SSSBOEs). It has been understood that the proximity of a
web of businesses lowers the unit cost of infrastructure,
leads to accretion of skills and is a source of informational
economies.

5.1 Small and Medium Enterprises (SMEs) have always been the
engine of growth in developing as well as in transition economies.
Many developed economies (i.e. Japan, U.S.A) owe their
industrialization to SMEs. SMEs are proven Innovators and the

14
Jürgen Bischoff (2001): “ An Overview of Successful International Technology Business
Incubator Programmes”, The First International Workshop on Technology Business Incubators in
India (ITBI India 2001), 29-31 January 2001, Bangalore, India & Director, Asian and Pacific
Centre for Transfer of Technology (APCTT), New Delhi (India).

13
driving force behind a number of technological breakthroughs.
SMEs have been identified as high potential sector for
employment generation and source of livelihood to millions of
people in Asian, African, and Latin American countries. Many
studies show that SMEs worldwide largely under-utilize the
intellectual property (IP) system (Wolfgang, 2001)15. This may be
due to (i) unawareness of the IP system and its usefulness, (ii)
perceived high costs and complexity of IP system, (iii) lack of
easily accessible assistance.

5.2 SMEs sector today is at a crossroads in India and the

World over, as the process of globalisation has impacted SMEs
much more than larger business enterprises. SMEs are the
second biggest employment generators after agriculture,
providing jobs to over 9.2 million people in India. In India, the
SME sector accounts for 39 per cent of industrial production and
34 per cent of exports. It is estimated that there are around
350 SME Urban clusters and approximately 2000 Rural and
Artisan based clusters in India.

5.3 Micro, Small and Medium Enterprises (Micros/SMEs) face

information asymmetries in two ways: (i) in their own access to
market- and business-related information, and (ii) as providers of
services to poor people. Informational costs of isolation and low
volume can be reduced through formation of groups,
associations, business clusters, and franchising. Innovative use of
information technology and telecenters can cut down transaction
costs, and enable micro-entrepreneurs and SMEs to connect to
information about markets more effectively. There is a need for
serious global thinking on how to ensure greater stability of
SMEs, how to provide greater social security for those working in

15Wolfgang Starein (2001): Intellectual Property and SMEs - A Brief Account of WIPO’s Strategy
and Activities, (Director, SMEs Division, WIPO) September 2001.

14
this sector, and, at the same time, how to retain the dynamic
force that drives this sector (Vajpayee, 2002)16.

5.4 International Business Centre (IBC) survey report17 for the

Department of Scientific & Industrial Research (DSIR) on
Transfer of Technologies (TOT) shows that developing countries
traditionally import technologies from America & Europe, and but
in recent years, they have turned attention for technologies to
other countries like Japan, South Korea, and Australia.
According to the report, the merits of technologies of Indian
SMEs are categorised as follows:

• Intermediate technologies proven in Indian market,

• Less capital intensive & hence better utilization of human resources,
• Easy to assimilate and operate,
• Moderate Price (cost-effective),
• Reasonable operational cost/Low cost of trouble- shooting,
• Value-addition to natural resources,
• End products successful in both domestic & international market,
• SMEs’ preference for African countries, due to the presence of
development banks, to Central Asian Countries, and
• Hardly any psychological resistance of units & government agencies
in accepting technology from SMEs from India.

5.5 An effective strategy to overcome this inherent weakness

of SMEs is to network enterprises (Figure-1) with institutions
and organisations active in the area of SME development,
information networks, and data banks as well as with technology
generators. The IBIS programme18 of UNIDO, the
AGMARKNET project of the Government of India for

16
Atal Bihari Vajpayee (Hon’ble Prime Minister of India) addressed the Global Summit on Small
and Medium Enterprises (SMEs) in New Delhi on 20-12-2002.
17 International Business Centre of MITCON set up with the assistance the Department of

Science & Technology and the Ministry of Commerce of the Government of India, and the
Government of Maharashtra.
18 INTERNATIONAL BUSINESS INCUBATION SYSTEMS (IBIS) - an institutional mechanism developed

by UNIDO to help promote individual entrepreneurs, especially those planning new products
based on existing or new technologies in India, by networking them with successful SMEs in
developed countries.

15
farmers, and ITC’s E-Trade Bridge for SMEs in India improve
their e-readiness (i.e. creating internationally competitive e-
commerce competence among SMEs) to penetrate into export
markets. Establishing such an integrated service package on
Internet is a very challenging task (Vadim Kotelnikov, 2001)19.
e-Commerce has drastically shifted the paradigms of
international trade. Cost effective access to international
markets, instantaneous information exchange and changing buying
practices are resulting in a quantum jump in global online exports.
In the 21st Century, e-commerce will really be the engine that will
drive exports globally. Experts from the Indian Ocean RIM
Countries have urged the Member Countries to evolve a unified
and harmonised regulatory framework for e-Commerce.

5.6 Rural development is a process of sustained growth of the

rural economy (agriculture, industry, construction, transportation
and commerce). Industrial growth and Economic growth are
dependent on production and productivity in agriculture.
Agricultural development, along with rural enterprise is therefore
the cornerstone for promoting sustainable rural livelihoods. Rural
towns are essential to farm households, as they offer “economies
of agglomeration”. E-Commerce has the advantage of bringing
SMEs and individuals to the global markets (i.e. reduced cost and
by-pass traditional links in the supply chain). Small and Marginal
farmers (i.e. agricultural SMEs) require this as a public good.

5.7 The development strategy should, inter alia, facilitate skill

improvement, provide employment in rural areas, transfer of
appropriate technology for industrialisation, and promote self-

19
Vadim Kotelnikov (2001): “Development of Web-aided Technology Transfer Services for SMEs
in Asia”, Asian and Pacific Centre for Transfer of Technology (APCTT), New Delhi, India.

16
reliance among the people, and build-up a strong rural community
base. The locus of agricultural growth has already been shifted
from production front to the processing and marketing front.
Rural cooperatives are, once again, emerging as alternatives for
making rural economy vibrant through agro and rural based
industries. The rural economy can be vibrant iff agro and rural
industries are positioned and integrated with the national and
global economy.

5.8 Knowledge based training may provide them a ray of hope

for concretizing their future strategies. However, the concept of
training has not percolated down to the SMEs (Sudhir, 2001)20.
Use of traditional and modern information and communication
technologies (Website, E-mail updates, distance learning, e-
learning, etc) is essential to disseminate information on IPRs for
SMEs. SMEs require training in the following areas:

• Marketing Strategy of SMEs; Role of Trademarks and

Industrial Designs (Case studies with focus on the role of
trade marks, including certification marks, geographical
indication, and industrial designs; introduction to basic
concepts and registration procedures as well)

• Solving Production and Product Quality Problems of

SMEs; Role of the Patent System (Case studies with a
focus on the role of patents; introduction to basic concepts
and patent grant procedure as well; use of patent
information services, and access to patent information
services in India)

• Using IPRs for Safeguarding Business/Trade Secrets

(Case studies with a focus on trade secret protection,
importance of confidentiality agreements with employees

20 Sudhir K. Jain (2001): http://www.isbc2001.org/home/Sudhir%20Jain.pdf

17
 and potential licensing partners, and introduction to licensing
of IP)

• Relevance of Copyright to SMEs (Case studies with a focus

on introduction to basic concepts of copyright and
related/neighbouring rights; copyrights and SMEs in the
handicrafts sector, or those having a presence on the
internet, that is, those having e-mail address or WebPages,
as well as SMEs in e-business/commerce, software
development or the cultural industries)

• Role of International, Government and Private Sector

Agencies in Meeting IP needs of SMEs (Focus on the role
of WIPO, relevant Ministries, the Patent Office,
Trademarks Registry, Courts, Customs, Police, SME financing
and support agencies, and role of IP Law Firms, IP
Agents/Attorneys, Chambers of Commerce and Industry,
Collective Management Associations for Copyrights and
Related Rights, SME Consultants, etc)

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 Urban Rural
SMEs SMEs
Clusters Clusters

Rural Rural
SMEs SMEs
Clusters Clusters

Urban
SMEs
Clusters

Figure – 1: Rural and Urban SMEs Networking

6. Digital Opportunities: A way forward for Reduction of

Spatial Disparities and Enhancing Opportunities for
Development of SMEs to penetrate into export markets

6.0 Digital opportunities now help realize the concept of

“sustainable communities”, which is one where all stakeholders
are partners in progress on the road to economic development –
“sustainable production” and “sustainable consumption”:
“Computerisation of Societal Systems” and “Using Internet
towards Doubling Per Capita Rural GDP in Ten Years”. Rapid
emergence of knowledge-based economies required a paradigm
shift in technology transfer services from traditional (i.e.
horizontal company-to-company transfer of commercialized

19
technology through a worldwide network of technology brokers)
to Internet and vertical transfer of technology from R&D labs to
industries.

6.1 Micro, Small and Medium Enterprises (Micros/SMEs) face

information asymmetries in two ways: (i) in their own access to
market- and business-related information, and (ii) as providers of
services to poor people. SMEs use their customers as a key
source of information for innovation, but in future their
customers may instead expect technological innovation from
them. There is a risk that technology foresight will be thought of
as "someone else's job", and may not be adequately addressed
within the Value Chain (Reed and Walsh, 2000)21. In this context,
Innovation22 is of critical importance and plays a central role as
an engine of growth in providing employment and competitiveness,
and as a cornerstone of enterprise policy.

6.2 Technology transfer is a very sophisticated process

requiring substantial expertise in various relevant areas.
According to Vadim Kotelnikov of UN-APCTT, just information on
technology opportunities and simple matching of prospective
technology buyers and sellers does not produce desirable results
in most cases. The Internet, which allows intangible information
and ideas to be traded and exchanged instantly, across any
distance, is the most recognizable symbol of today’s global,
knowledge-driven economy. Technologies that were traditionally
traded mainly through technology brokers and business
consultants now find easier and faster routes to target users

21
F M Reed and K Walsh (2000): “Technology acquisition and the changing face of manufacturing Industry “,
Proceedings of the 3rd International Conference on Stimulating Manufacturing Excellence in Small & Medium Sized
Enterprises (SME-SME 2000), PP.128-139, 17-19 APRIL 2000, COVENTRY UNIVERSITY, U.K. (ISBN
0905949862)
22 Innovation – the capacity to assimilate and convert new knowledge to improve productivity and to create new

products and services.

20
through Web-based Technology Transfer Portals (WTTP).
Science is global, but technology is always local. SME managers
aren't scientists but businessmen, and therefore, require an
integrated technology transfer service package, that would
include technology and business studies, contract negotiation,
finance syndication, and legal advise to successfully implement
such projects.

6.3 Supply Chain Management (SCM) is important for SMEs, as

the supplier, the customer, the logistics partner and the
manufacturer together involve in the material flow, the
information flow and the fund flow. While the material flows
from the back end (supplier) of the supply chain to the front end
(customer), money flows in the reverse direction. The information
flows on both directions. Collaborative planning and information
sharing practices will streamline the information flow in the
supply chain. A good supply chain management will provide
superior value to the ultimate customer23. SMEs can greatly
exploit the web technology to streamline the information flow.
Planning disruptions, delayed delivery, missed opportunities to do
more business are a few to mention. Improved communication will
benefit all the supply chain partners in the long run. Indian SMEs
have realized the importance of productisation and specialization
to survive in an ever-changing market.

6.4 Doing business on the Net is not about creating good-looking

Websites but about re-engineering the entire business process
into a robust system that harnesses the enormous opportunities
that the connected market place will present. Informational costs
of isolation and low volume can be reduced through formation of

23
Mahadevan.B (2001): Why Supply Chain Management is important for SMEs?, Indian Institute of Management,
Bangalore (India) & mahadev@iimb.ernet.in

21
groups, associations, business clusters, and franchising.
Innovative use of information technology and telecenters can cut
down transaction costs, and enable micro-entrepreneurs and
SMEs to connect to information about markets more effectively.
The ingredients of this engineering process would be:

• SME TechWeb (Technology, R&D, Innovation) is a European Commission

Website provides information and resources for technology-oriented
company with fewer than 250 employees (small and medium-sized
enterprises, or SMEs) - especially those wishing to innovate and
internationalize.
• Oracle e-business suite is an integrated suite of Internet business
applications that automates critical business process across both front
and back office operations.
• Sme.com.ph is an e-commerce portal of SME Solutions, Inc. created
exclusively for Philippine SMEs aimed at promoting the key areas of
business operations through the combination of traditional methods and
technology tools.
• Sri Lanka’s web site for SMEs is established with the financial
assistance from the Asian Development Bank (ADB).
• Technology4sme.com & Business e-Coach for Asia-Pacific SMEs,
established by UN APCTT - an Asia network of Model Technology
Transfer Agencies (MTTAs).
• SMEs in India (www.smallindustryindia.com) with over 50 categories and
30 Lakhs records.
• TIFAC (Technology Information, Forecasting and Assessment Council) -
http://www.tifac.org.in – for technology and business links, partner with
TIFAC;
• Indian Patent database - http://www.indianpatents.org.in
• SAP’s mySAP.com Internet business strategy (mySAP.com workplace,
mySAP.com marketplace, mySAP.com business scenarios and mySAP.com
application hosting

6.5 Areas of business that are targeted for improvement of

SMEs are: User profiling, Supply Chain, Value Chain, Customer-
Relation-Management (CRM), SME Networks, and Supplier
Cooperation. These areas require (a) Web services development,
(b) Turn-Key ICT solutions for SMEs clusters, (c) Mobile
Applications Development, (d) Application User Interface Design
and security Enterprise.

22
 7. What is a digital SME?

7.0 A Digital SME is an SME that exploits ICT to its full

potential in a holistic manner, e.g. changing products and services,
changing markets, changing relationships with customers, new
types of value chain and forms of cooperation and alliance, new
organizational and management configurations, new ways to
manage knowledge, etc. There are three sub-categories of digital
SMEs, as given below:-
a. An SME whose products and services are predominantly digital;
b. An SME which uses digital methods as the primary means of
carrying out core operations - marketing, sales, service etc (e.g.
a pure dot.com);
c. An SME that exploits the benefits of digital methods to a
significant extent.
7.1 The focus is on SMEs’ best practices in exploiting the
opportunities provided by ICT to improve performance. Attention
is devoted to SMEs evolution and to the “external” factors,
related to “digital economy” that directly affects SMEs success
and development. This focus will result in addressing:
• Structural changes in SMEs organization and management
related to the impact of digital economy;
• Changes in the competitive scenario that may affect the SMEs
evolution;
• Interventions and policy instruments that have contributed to
foster the SMEs adaptation to digital economy.
7.2 The analysis will consider both single business units and
networks of SMEs. In fact, the networks, both informally and
formally defined, are important organizations for the small
companies and several experiences (such as the industrial
clusters) show that networking is a successful way to improve
SMEs competitiveness. However, it is essential to have an

23
“Integrated Policy Framework for Community and SMEs
Development in Digital Economy” for the Country.

8. Broadband to induce Internet among the Customers

and SMEs

8.0 Internet among the Customers and SMEs is very limited in

India. Further poor telecom and infrastructure for reliable
connectivity is another barrier for adoption for e-Commerce in
India. While internet connectivity is slow, access costs are high
and connections are unreliable. This constraint has been removed
by the National Broadband Policy 2004: “Always On” data
connection with a minimum download speed of 256 kbps through
unbundling of the “last mile” link of the incumbent telecom
operators (BSNL and MTNL). Other means of spreading
broadband includes cable television, satellite (DTH and VSAT),
terrestrial wireless, Fibre-to-Home, Fibre-to-Building, and
Fibre-to-Community.

8.1 Availability of broadband services at affordable price

levels would have a significant impact on GDP, affect new
investment, create job opportunities, provide access to new and
improved services, and increase productivity through
infrastructure creation (Dayanidhi Maran, 2004)24. The Asian
markets including India are poised for a broadband revolution.
But the key to its success lies in meeting the content
development challenge driven by Governments and right
regulatory environment (Neel Rattan, 2004)25.

24
Mr. Dayanidhi Maran, Union Minister of Communications and Information Technology, in The Economic Times, 3
June 2004..
25 Neel rattan (2004): “Broadband growth hinges on Content, Pricing”, Business Line, 19 January 2004..

24
9. Distributed and Mobile Computing: New opportunities for
economic growth and employment

9.0 Recent advances in hardware technologies, such as portable

computers and wireless communication networks, have led to the
emergence of mobile computing systems26. The
simple mobile telephone itself is a product of
convergence of three technologies – telephone,
computer and television. The evolution of
Network Based Computing relates to Distributed
and Mobile Computing (DMC) (Figure-1), and two
new directions of computing; Grid computing27 and Pervasive
computing28. The key of Pervasive computing is middleware
technology, whereas the Grid environment itself is a middleware
designed to coordinate other middleware.

9.1 Pervasive computing enables a wide variety of applications,

ranging from secretarial support to technical support for
customers, to services for automobile drivers, to retail and
business-to-business e-commerce. As computing power becomes
pervasive in a wide variety of environments, traditional keyboard,
mouse, and monitor interfaces is giving way to novel interfaces,
including natural-language recognition of speech and handwriting,
visual recognition of gestures, and even recognition of emotions.
Thanks to such interfaces, pervasive applications thus help people
remain focused on a task rather than distracting their focus
from the task to a computer.

26
Mobile computing allows ubiquitous and continuous access to computing resources while users travel or work at a
client's site.
27 Grid computing coordinates network resources and mimics electrical power grid by bringing remote computing

power uniformly and transparently to the users..

28
Pervasive computing emphasizes everywhere, all-time services and “human-centered” view of computing.

25
9.2 Wireless communication, whether over a wide area, a local
area, or a range of a few feet, is fundamental to many mobile
computing applications. An evolution is occurring in wireless and
portable computing: Wireless Internet. Smart hand-held
devices will drive the Wi-Fi revolution as they are cost effective,
lighter, user-friendly, and can be customized for specific
applications. WiMAX29 is a long distance Wireless networking
Technology designed to replace DSL and Cable Internet Access
(Intel’s Plan – Intel Wireless Connect). WiMAX could be DSL and
Cable what cellular was to landline.

9.3 A user's location will become information that is as

common as the date is today; getting input from GPS, when
outdoors, and other location providing devices, when indoors.
Availability of location information will have a broad impact on the
application level as well as on network level software. The
emergence of new services and the growth of existing services
are expected to expand the overall information market leading to
new opportunities for economic growth and employment.

29
WiMAX is a Radio technology that can blanket entire cities with high speed internet access.

26
(Figure-2: Source: OBR Center for Distributed and Mobile Computing (CDMC) Laboratory at
University of Cincinnati, U.S.A & http://www.ececs.uc.edu/~cdmc)

Distributed and Mobile Computing: Complexities and Challenges

9.4 While distributed computing and mobile computing are often

not considered as `new' technologies, a number of technical
issues have not been resolved and are facing new complexities
(Xian-He Sun, http://www.cs.iit.edu/~sun/). Challenges of
maintaining reliable connections with mobile devices and enabling
wireless communications in small, low-power devices are
paramount in nature. Distributed and Mobile Computing
environment has ushered in new database problems. The status of
data management in mobile computing is similar to that of
distributed data management versus centralized data
management in the 1960s.

27
9.5 It is viewed that a mobile DBMS computing environment as
an extension of a distributed system: “Mobile Heterogeneous
Multidatabase System”. By viewing distributed databases as a
special case of mobile databases, Margaret H. Dunham and
Abdelsalam (Sumi) Helal30 have seen that some solutions for
database problems in the distributed environment do not work
well in a mobile environment. Many of the issues are the same, but
the solutions are different. Alonso and Korth [1993]31
concentrated on the impact that mobile computing (or nomadic
computing) has on various database processing activities: query
optimization, transaction models, and security. The relevant
research issues addressed are:-
• Mobile (or location-sensitive) query languages,
specifically SQL extensions;

• Mobile database design, especially those issues related to

the automatic maintenance of metadata that maps data
sets to locations;

• Efficient yellow page archiving that will allow data (about

services) and its associated location to be dynamically
registered and discarded;

• How to specify the degree of consistency between the

mobile application cache and the stationary copy? Should
this be implemented at the system-level or at the
programming language level?

• Migration of data into the mobile host for extremely

long-lived applications (i.e. integration of Mobile Phone
and USB drive with portable operating system)

30
Margaret H. Dunham and Abdelsalam (Sumi) Helal: “MOBILE COMPUTING and DATABASES: ANYTHING
NEW?” (mhd@seas.smu.edu & helal@cs.purdue.edu)
31
Rafael Alonso and Henry F. Korth (1993): “Database system issues in Nomadic Computing” in Proceedings of the
ACM International Conference on Management of Data, pages 388-392, May 1993..

28
 • Migration is dynamic data redistribution, not a form of
caching. How can data be migrated into the mobile
application? This is not achievable by simply invalidating
the primary copy (stationed copy).

• And even if migration is successful, would access to an

already migrated data be allowed only locally? If not, we
end up with a mobile application, mobile server model,
whose behavior is very difficult to predict.

9.6 While enterprise servers and networks are increasingly

protected using standard security technologies, files are not
protected after they are received on employee and partner
computers. Rapid growths in distributed and mobile computing are
tearing down enterprise security boundaries built today with
Virtual Private Networks (VPNs) and Firewalls. Companies have
paper shredding policies but they don’t have the tools to track
and shred electronic documents that are proliferated by the
growth in distributed and mobile computing.

9.7 Organizations cannot afford to keep non-critical data or

stale data on expensive primary memory storage for a long time
and need to shift to secondary storage. Demand for higher
performance is on the increase. Information Lifecycle
Management (ILM) may be the way forward. Implementing
ILM is a policy decision and has become very complex as it needs
to involve every department in the organization. In USA, there
are three important regulations namely: the Sarbanes-Oxley
Act, the Gramm-Leach-Bliley Act and SEC 17a-4, forcing
organizations to craft an ILM strategy.

9.8 Adding to this challenge is the increase in regulations and

legislation requiring increased control and protection of
information. How can companies be confident that their use of

29
new communications and computing networks comply with laws
as well as their own needs to protect information? Ernst
&Young (E&Y)’s Global Information Security Survey 2003 reveals
that:
• Information security is of high importance for achieving
their overall objectives (90% of Organizations surveyed
said).

• Organizations are inadequate in their ability to respond to

incidents (More than 33% of organizations said).

• Compliance with applicable security-driven regulations (Only

34% of organizations claimed to be).

9.9 Security is especially important in mobile computing because

wireless transmissions can be sent and received by unknown
parties, and because mobile devices are susceptible to loss and
theft. Information Security should overcome the hurdles of user
acceptance and IT architecture compliance with easy installation,
intuitive user interfaces, and operation with all popular operating
systems, all popular file formats, and industry-standard
protocols.

9.10 The flexibility introduced by mobile computing brings new

challenges to dependability and fault tolerance. Failures that
were rare with fixed hosts, become common, and host
disconnections make fault detection and message coordination
difficult. This is posing problems for e-Commerce and e-
Business.

30
 Distributed and Mobile Computing: Data Development
Strategy
9.11 Mobile applications are difficult to write without
middleware providing fundamental mobile computing services (viz.,
reliable asynchronous messaging, data storage and
synchronization, disconnected publication and subscription,
transcoding data to a format appropriate for a particular device
and network connection, and service discovery). Mobile Network
Operators (MNOs) need to ensure that Content Partners and
Application Developers get a fair share of revenues to stimulate
constant development and roll-out of new, innovative and
compelling content and services.

9.12 The World Wide Web (WWW) has been designed for static
hosts, connected to static networks, which are capable of sending
and receiving large amounts of data without significant delays.
Mobile phones are becoming more data-centric and evolving into
what the industry calls "smart phones", while PDAs are becoming
commonplace among business people. The two categories are
converging into a new hybrid, providing powerful computer power
and a phone in our shirt pocket.

9.13 Mobile Internet Toolkit facilitates creation of different

mobile media content via a comprehensive set of editors and
wizards. These include Web page creation (editors for creating
WML, XHTML, and CSS content), MMS creation (editors for
creating MMS with SMIL messages) and Push message creation
(editors for creating multipart and SI/SL messages). Mowser is
a smart web browser designed to browse the WWW from a
mobile host, taking into account, the user's preferences and
network limitations. Mowser supports a “many-time, many-

31
where” communication paradigm that is suited for a wide variety
of information services.

9.14 The Mobile browser (e.g. Nokia Mobile Browser Simulator

4.0) supports browsing mobile Internet content such as XHTML,
WML, and WAP Push messages from the Internet or from the
local file system. BREW (Binary Runtime Environment for
Wireless) is a software platform developed by Qualcomm Inc.,
for mobile devices. This platform provides an interface between
the software applications that run on mobile phones, and mobile
hardware and infrastructure system at the back end. Qualcomm
has launched BREW as an answer to JAVA, which is also a
popular platform for developing mobile applications.

9.15 The Mobile Data Deployment Strategies (2004–2010)

Report32 has stated that uptake of advanced handsets and
value-added non-voice services were growing and estimated
2006 and beyond would be a period of maturing of 3G technology
with penetration levels and service take-up reaching full maturity
by 2009 or 2010. Greater bandwidth and speed (4G and 5G) may
combine with the base technology that 3G provides driving
service take-up forward in leaps and bounds, once the initial
mass-market penetration reaches a suitable level. India desires
to leapfrog to 4G mobile telephony, according to the Ten Points
Agenda of the Union Ministry of Communications and Information
Technology released during 2004.

9.16 The domestic market drivers will be applications for the

mobile market. Convergence of e-Government with mobile
business will stimulate the emergence of “m-Government” in view
of public and social pressures, and technological pressures.

32 http://www.portioresearch.com

32
Research and Learning focus should be on the fundamentals and
theoretical foundations of mobile computing systems, wireless
networks, mobile information systems, distributed mobile
database systems, and advanced mobile applications.

10. AGMARKNET: Data for Rural Empowerment through

Mobile Computing – A CASE STUDY

10.0 As a step towards to globalisation of agriculture, the Union

Ministry of Agriculture has embarked upon an ICT project:
NICNET based Agricultural Marketing Information System
Network (AGMARKNET)" in the country. This AGMARKNET
project has already networked 735 Agricultural Produces
Wholesale Markets (APWMs), during 2000-02 and embarked upon
additional 2000 Markets during the Tenth Plan Period (2002-
2007). The Government initiative of the networking of
agricultural produce markets (AGMARKNET33) and the
AGMARKNET Portal (Figure-3) would facilitate the development
of B2B and B2C e-Commerce Model in the Country (Moni, 2001)34.
This project has the potential of expansion to about 7000
Wholesale Markets located through out the country and further
to 35000 Rural Markets in India. This ICT Project is a 'farmer-
centric" project (Figure-4) to put the progressive farmers on
"global free trade zone on Internet".

10.1 AGMARKNET appears to be filling a huge gap by providing

access to information at reasonable cost. The AGMARKNET

33 "AGMARKNET: NICNET Based Agricultural Marketing Information System Network - A Sponsored Project of
the Directorate of Marketing and Inspection (Ministry of Agriculture)", February, 2001 and also see
http://www.agmarknet.nic.in
34 Moni .M (2001) : “Leveraging Information Technology for development of Agri-Business – Agribusiness : B2B

or B2C e-Commerce Model?”, presented at the National Seminar on “Managing Agri-Business in the New
Millennium : Challenges and Opportunities”, organised by All India Management Association (AIMA) , 20-21 July
2001, New Delhi

33
venture is a heartening initiative from the much criticized and
slow-to-react government, especially on the issue of easing the
infrastructural constraints on agriculture (Times of India,
2002)35. The advantages of this database accrue to the farmers,
as they are not forced to sell their produce in the nearest
market at uneconomical prices. The challenge, if the full
potential of such ventures have utilized, is to take IT to rural
India in a big way. Constraints/Challenges are (a) connectivity in
rural areas, (b) training the stakeholders and (c) ensuring data
updation in real time frame (http://www.eapf.net/
casestudies/in/agmarket.asp). Anand Sagar (2003)36 considers
AGMARKNET, a step towards "Rural Empowerment" and also
"Data for Development". Kari Holland of Washington University
(USA)37 categorizes AGMARKNET (India) as follows:-
• Nationwide market information for wholesale produce,
• Project supported by various departments and state
boards of agriculture,
• Access mainly through the Internet,
• Customers pay (some),
• Computer facilities at the markets,
• Software for download,
• Daily market prices,
• Information collected by nodes in the various markets,
• Weekly trends,
• Information on loans, policies and regulations,
• Income has increased (for some), and
• Bypass middlemen.

35
Times of India : "Website to help farmers bargain better", dated 31st May 2002
36
Anand Sagar K (2003), “Agmarknet-Rural Empowerment: Data for Development”, Geospatial Today, Vol.2 (2),
2003 and also www. Geospatialtoday. Com/ journal/Vol2Issue2
37 Www.cis.washington.edu/courses/pbaf537d

34
 Figure-3: A Synoptic View of AGMARKNET Portal

10.3 The Inter-Ministerial task force on Agricultural marketing

Reforms (2002) has suggested creating an "Atlas of Agricultural
Markets" as well as "e-Commerce" on AGMARKNET Portal so as
to enable producers (farmers) directly transact business with the
buyers. This Digital Advantage Project has already achieved the
followings:-

• "Reaching the Unreached i.e. resource poor farmers",

• "reduction of distress sale",
• "right to information",
• "base for production planning",
• "base for marketing led agricultural extension",
• "increased competition",
• "reduced marketing margins",
• "vertical linkages in export crop markets that connect
multinational traders to domestic traders"

The country is now witnessing a unified "agricultural marketing

price information system" for the entire country. The general
Hypothesis is “the more farmer produces the less he gets” –
i.e. not getting adequate returns for his toils. The increasing
trend of agricultural production has brought new challenges

35
facing India now lie in positioning her current and future surplus
in certain niche markets. This AGMARKNET venture benefits the
farming communities from the new global market access
opportunities and also strengthened the internal agricultural
marketing system in India.

10.4 There have been requests for AGMARKNET venture in

various developing countries (ASEAN), Countries in Africa region,
etc., in view of its operational efficiency in India. AGMARKNET is
an effort to bring rural people into the mainstream economy.

Figure – 4: Farmer and his Stakeholders

Synergetic collaboration among Cooperatives, Agricultural

Produce Markets, AGMARKNET, Agri-Clinics, Agri-Business
Centres could become the “pathways” to rural prosperity.

36
 Solution Architecture
Local App

Optimized Mobile
Serv er
(power, net BW, cost)
Call Center Secure Web-
based Portal Secure Wireless
Access Connection (any
Web- enabled phone,
SMS)

Standard Web Serv ice Interf ace to other

Div isions, 3rd Parties
- Highly Scalable - Secure

Secure Web-
based Wireless , VSAT, or
Optimized Mobile Low BW Connectiv ity
Access
Serv er to other Div isions & 3rd
Parties
11-January-2005 ICT Initiatives for the Agricu lture 45
Sector

Figure – 5: AGMARKNET & Mobile Computing Model

Support for Wireless and Low-

Bandwidth Networks

Optimized Mobile
Devices with:
Server
GSM
GPRS
SMS Web Service
802.11 WiFi End-Points
Dialup Landline
T1
VSAT Secure, Reliable, Optimized Channel
• 32% - 83% reduction in power consumption on the mobile device
• 47% - 92% reduction in network bandwidth utilization
• 37% - 58% reduction in usage cost

11-January-2005 ICT Initiatives for the Agricu lture 46

Sector

Figure – 6: AGMARKNET & Mobile Computing Model

10.5 Areas of business that are targeted for improvement

through the Enhanced AGMARKNET programme through Mobile
Computing Model (Figure-5 & Figure-6) are visualized as follows:-

37
 • User profiling
• Supply chain (Input Supply)
• Value Chain
• CRM
• SME networks
• Supplier co-operation

To facilitate data access through Mobile Phone by farmers,

traders, different market players, consumers, banks, NGOs
researchers etc, the Indian Public Sector Telecom Company
(BSNL) has shown its interest to disseminate wholesale markets
pricing data on 300 agricultural commodities and their 2000
varieties, being received from more than 1200 APMCs located
through out the country, through their Mobile services (Figure-
7).

Figure – 7: AGMARKNET Data over BSNL Network through Mobile

Phones

38
 11. Not enough legal safeguards for B2C transactions under
the existing Indian Cyber Law : A Concern

11.0 e-Commerce transactions are primarily based on “trust”, and

the “inherent” strengths of the Internet and the IT
infrastructure. Secure exchange of monetary value and other
items of value, enabling e-commerce through mobile devices,
is just one focus of the security research. Though this medium
provides an excellent opportunity to reach out to many
customers, consumers often face problems with regard to the
deficiency of goods or the services rendered. There are also
multiple gaps in the current legal and regulatory framework.

11.1 The major drawback of the Information Technology ACT

2000 is that it does not address the concerns of consumers who
undertake e-commerce transactions (Pavan Duggal, 2005)38.
There is not really any effective remedy under the Indian Cyber
law, even though it has the stated objective of promoting e-
commerce in India. Therefore one has no option but to fall back
upon the provisions of the Consumer Protection Act 1986 [for
“deficiency of goods and services” clause].

11.2 Multiple issues of trust and lack of payment gateways has

been another hindrance for adoption of e-Commerce in the
country, as there is no security and confidentiality of data (IBC,
2004)39 .

38 Pavan Duggal (2005) : “Not Enough legal safeguards for B2C Transactions”, published in THE ECONOMIC
TIMES dated 13 March 2005.
39IBC (2004): This relates to the Study conducted for FICCI by International Business Consultants (IBC) on e-
Commerce opportunities in the RIM Region.

39
 12. Digital SMEs and its Stakeholders in India

12.0 According to (Frank Wilson, Tony Swash and Stephen

Anderson)40, there has been a gap existed between the strategic
level of support for business development (regional focus) and
the SME level of development (specific business development).
It has been further argued in (Wilson and Pardo et al, 2001)41
that the threat of marginalisation faced by SMEs in the
increasingly digital economy can be reduced by systematic
support for transformation of traditional business approaches,
sectors, and networks. Knowledge Management for regional
business development may become a more critical issue as the
digital economy becomes more established. There are many
stakeholders in the Government and International Organisations
who can directly involved in development of Digital SMEs in India:

(a) Small Industries Development Organisation (SIDO)

(b) UN Asia-Pacific Centre for Transfer of Technology (APCTT)
(C) Indian Postal System (IPS)
(d) National Informatics Centre (NIC)

(a) Small Industries Development Organisation (SIDO)

12.1 The Small Industries Development Organisation (SIDO)42 of

the Ministry of Small Scale Industries (SME) acts as a catalyst
of growth of small enterprises in the country, with the focus on

40
Frank Wilson, Tony Swash and Stephen Anderson:”Promoting SM-E-Business through Business Support
Networks”; www.usherproject.org.uk
41
Wilson, F., Swash, T., Pardo, A., and Crump, M (2001): “Structured Support for S-M-E-Business”, In Proceedings
of Human Factors in Telecommunications-HFT'2001 Conference, Bergen, Norway, 2001.
42
Small Industries Development Organisation (SIDO), India - [www.smallindustryindia.com & dcssi@laghu-
udyog.com]

40
providing support in the fields of credit, marketing, technology
and infrastructure to SMEs through its organizations.

(b) UN Asia-Pacific Centre for Transfer of Technology

(APCTT)

12.2 The UN Asia-Pacific Centre for Transfer of Technology

(APCTT) located in New Delhi, India, has been working in the field
of technology transfer in Asia for almost 25 years, and
facilitates technology transfer negotiations among SMEs, as given
below:

• Information on technology/business/investment
opportunities
• Matching and pre-selection of prospective business partners
• Support services (market/feasibility studies, technology
evaluation, contract negotiation)
• Finance syndication (loan, venture capital, grants,
incentives), and
• Product marketing

(C) Indian Postal System (IPS)

12.3 The Indian Postal System (IPS) Network has about 1.54
Lakh post offices, out of which, HPOS are 840, and Sub-Post
Offices are 25190. The Tenth Five-Year Plan (2002-07) talks
about establishing 5,000 Panchayat Sanchar Sewa Kendras
(PSSK) for future expansion. Postal organizations are adapting to
diversify product portfolios and expanding services into non-
traditional areas such as e-banking, e-government and e-
commerce. A distribution network that has 155618 post offices,
of which 139081 are in rural areas, and a customer base of 160
million account holders in post-office savings banks. India Post

41
gives us a complete national reach and penetration besides being
partners in transactions (ICICI Bank, 2003)43.

(d) National Informatics Centre (NIC)

12.4 National Informatics Centre (NIC) has been a prime

builder of e-Governance applications in Government Sector and
Promoter of digital opportunities for sustainable development.
Since its inception in 1977, NIC has been playing an important role of an
“active” catalyst and “facilitator” in informatics development programme in
Governments at the national, state and district levels, which inter-alia
includes:

° Data Warehousing (Data Bases & Model Bases) and

Mining
° Network services (Internet, Intranet, & Extranet)
° Geographical Information System (GIS)
° E-Governance & E-Commerce
° Decision Technology System
° Sectoral ICT Plans
° IT Training for Government Employees (i.e.
empowerment)
° Video Conferencing, and
° Total-ICT solution

NIC has institutional linkages through its ICT Network

“NICNET”, with all the Departments/Ministries of the Central
Government, 28 State Governments, 1 National Capital Territory
of Delhi, 6 Union Territories, and about 600 District
administrations of India.

“Indian Post ushers in a new mail order” published in http://www.rediff.com/

43

money/2003/mar/08spec.htm

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12.5 State Government Informatics Development Programmes

were launched to overcome “Digital Divide” among Central

Government Departments and State Governments, and District

Government Informatics Programme (DISNIC)44 to overcome

“Digital Divide” in District Administrations during 1985-87.

NICNET based “Community Information Centres (CIC)”45 in

grassroots level (about 487 blocks) in the North Eastern States

(Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland, Tripura, and Sikkim) aim to “boost efficiency and

enhance market integration” through Internet/Intranet for

sustainable regional development.

12.6 During the last 27 years, NIC has implemented many

“network centric” applications software for Programme

implementation in various ministries and departments, using

state-of-the-art software tools. “Reaching-Out-Into” and

“Reaching-the-Unreached” Concepts were experimented and

made operational by NIC through its various ICT Diffusion

Projects (DISNIC Programme), since 1986-87 onwards, through

its 596 NICNET nodes located in district headquarters, even

before the INTERNET Technology was introduced in this

44 Moni,M & Vijayaditya,N (1990) : “DISNIC – A NICNET Based District Government Informatics Programme in India”, presented at Indian
Computing Congress, held in December, 1990 at Hyderabad, India.
45Ministry of Information Technology : “Community Information Centre” project, Government of India, 2000

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Country. During 1980s and early part of 1990s, the policy thrust

was on creating a “decision support system” for development

planning and responsive administration in governments (i.e. an

earlier version of the present day “e-Governance”).

12.7 NIC has vast core expertise and experience in the design,

development and operationalisation of various e-Government

projects in the areas of Public Administration and Governance

viz., Agriculture & Food, Animal Husbandry, Fisheries, Forestry &

Environment, Industry, Health, Education, Budget and Treasury,

Fiscal Resources, Transport, Water Resources, Court

Management, Rural Development, Land Records and Property

registration, Culture & Tourism, Import & Exports facilitation,

Social Welfare Services, Micro-level Planning etc. Some of the

successful ICT Diffusion projects in the areas of Public

Administration and Governance are as follows:-

• Technology facilitates Speedy Court Cases Trials“ - A

successful Experiment through Video Conferencing between
the Jail and the Court, wherein the Under-trial is in the Jail
Complex and the Judge hears the under-trial sitting in the
Court. This technology driven process has been experienced
in the State of Bihar;
• “Redress of Public Grievances” - An Ongoing Event of the
Chhattisgarh Government over NICNET
• IT in Indian Courts - A landmark project covering the
Supreme Court, High Courts and District Courts in India;

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• AGMARKNET - A step towards globalisation of Indian
Agriculture - Networking of Agricultural Produce Wholesale
Markets (APWMs) for dissemination of Agricultural
Produces Market prices information - 735 APWMs by March
2002, and additional 2000 APWMs during 2002-07; Road
Map is to network 7000 APWMs and about 32000 Rural
markets to empower agricultural and rural micro-
enterprises;
• STAMINA, TACKIS & MUDRA - Success stories on sales
Tax Administration in States
• RuralSoft - ICT in Poverty Alleviation Schemes Monitoring
Programme
• COIN – Cooperative Bank Management Software
• SMART Nagarpalika – An ICT framework for effective
functioning of Municipal Administrations
• E-Panchayat – A Smart Village ICT Framework
• IT Training - A Key to Business Process Re-Engineering
• IT in Environment - A step towards Environment Security
• Passport services - Towards e-Passport for Indian Citizen
• EDI services in Indian Customs and DGFT- a reality in India
• SERMON – An Intranet solutions for the Central Excise
Revenue Collection
• IT & Road Transport - A SMART Revolution in India:
SARATHI & VAHAN
• Central Civil Pension - Authorization through 32500 Public
Sector Bank branches
• Property Registration – CARD, STAR, PEARL, CORD, HARIS,
PRISM
• Land Records Computerization – BHOOMI, BHUMI,
TAMILNILAM, Bhoolekh, HIMBHOOMI, BHUIYA,
APKAKhata, DHARNI, etc
• Utility Mapping of Delhi - A Tool for Spatial Planning in Delhi
• WARANA Nagar Experiment - A Wired Village & PRAVARA
“Self-Help” Movement.
• E-Granthalaya – A Digital Agenda for Library Automation
and Networking to usher in “India a Knowledge Society”.
• Budget and Treasury Computerisation Programme
• Rural Bazaar - e-Commerce for Rural Micro Enterprises

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 • Community Information Centre (CIC) - aiming at economic,
social and cultural development of “rural” and "remote"
regions of the Country (North Eastern Region and State of
Sikkim)
• DACNET – An e-Government Project for the Department of
Agriculture & Cooperation of the Union Government
• enRich – A collaborative ICT Framework Product of
UNESCO and NIC
• Smart Card Technology for e-Government applications
• CollabCAD – An OpenSource Computer Aided Design Package
• GramSampark – A GIS-based social sector projects
implementation
• DISNIC – A District Government Informatics Development
Programme & DISNIC-PLAN : An Informatics Blueprint for
grassroots development
• IntraNIC - facilitating e-Organisation – appears in
www.microsoft.com as a case study

Synergetic Collaborative Relationship

12.8 A synergetic collaborative relationship among SIDO,

APCTT, Indian Postal System (IPS), Software Technology parks
of India (STPI) and NIC can invigorate SMEs in India, through
Value Chain, transfer of technologies, and utilise their IPRs.
This will also facilitate SMEs to access both national and
international business networks and emerge as “digital SMEs”.

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