4.1.4.1 India evolution of its government innovation objectives toward the economy 4.1.4.1.1 Overview
This section will explore the major Korean objectives and policies in the economic development plans from the early 1960s until now. These policies and objectives illustrate the government major principles, priorities, concerns, and new industries that helped shape the economy. Each Plan will have a table that describes the major policies and its effect on the relation between the four major innovation models that shaped the economy of South Korea. There will be arrows in front of each policy to indicate the level of connectivity between the GIS, NIS, RIS, and RIC. This step will produce a clear understanding of the connectivity and the evolution of the innovation models.
Each plan will have its table that explains the major policies and objectives. Moreover, at each point, there will be an arrow that shows the level of connectivity between the Global Innovation System (GIS), National Innovation system (NIS), Regional Innovation
System (RIS), and Regional Innovation Clusters (RIC). These innovation systems existed in the 1980s and 1990s by famous scholar such as (Porter, 1998), Lundvall (Lundvall, 2004), Nelson (Nelson, 1993), Cook (Yetton, Craig, Davis, & Hilmer, 1992). to indicate them at the early economic stages will explain the effect of these early policies in
developing the models of innovation systems. Thus, the arrows will explain the effect and relations between the international, national, regional, and rural economy in the country at the early stages.
4.1.4.1.2 Reformed the government, controlled large industries and supported farmers
- 1951-1956 India First Economic development plan (IFEDP)
DP N
2 Reduced the adverse effect of whole production machines
3 Redistributed the occupational workforce
4 Increased the vocational and technical training 5 Controlled all Key industries in the country
6 Provided funds for farmers
7 Increased the exports and reduce the imports
Table 1 the Indian First economic development plan (major objectives evolutions)
After India independence from Great Britain, the government of India started to reform the whole government system as its main objective of the First Economic Development Plan IFEDP (table 1). The new reform had reached the industrial, research, educational and monetary systems in central and regional and rural areas (INDIA Republic of India., Planning Commission, 1953).
The following schemes and objectives were crucial to developing the whole economic system of India during the IFEDP. As shown in table 1, the government major aim during the plan was to reduce the adverse effect of whole production machines on the local economy that existed and imported during the British Colonial era. These machines led to an advantage in reducing the cost of goods for local customers but had put many poor handicraft businesses out of business. Mass production created some unbalanced social problems in overpopulated areas, which led to the central government intervening by implementing policies that reduced mass productions in handicrafts areas. The third major aim as shown in table 1 was to redistribute the occupational workforce that was
concentrated in agricultural jobs by 68%; 14% in small and medium size businesses, 8%
in trade and transport, and 10% in profession and services from central to rural areas. The fourth aim was to increase the employment rate of the educated middle class that had been slowed down after the Indian and Pakistani war. The fifth aim was to increase the vocational and technical training in the whole country in all economic fields, such as agriculture, mining, fishery, and industrial activities. The sixth aim was to take over and control all Key industries in the country, such as “coal, iron, and steel, aircraft
manufacture, shipbuilding, manufacture of telephone, telegraph and wireless apparatus, etc.” (INDIA Republic of India., Planning Commission, 1953).
Furthermore, the government undertook all large private enterprises whose operation affected public services and infrastructure. Thus, there were no private enterprises free of government intervention during the first Indian development plan. The seventh aim was to create credit guaranty funds for farmers, and to provide seeds and fertilizers for local farmers and free them from the control of the private lenders, traders, and intermediaries in the land. The eighth aim was to increase the exports and reduce the imports to control inflation and protect small and medium sized business from the high competition.
These policies and objectives were very important in developing the basic Indian economy after years of the unstable, unbalanced economy. The new objectives were meant to develop the national, regional and sectoral Institute around the country that lay down the basis for the following years growth (INDIA Republic of India., Planning Commission, 1953).
4.1.4.1.3 Increased connectivity and support to local farmers
- 1956-1961 India Second Economic development plan (ISEDP)
DP N
2 Controlled all large enterprises that were involved in public services
3 Allowed smaller companies to invest in smaller investments 4 Focused on smaller villages and rural areas and created the panchayats
5 Connected all states with the central government 6 Provided financial assistance to regional and rural areas
7 Provided technical and financial assistance to local agricultural producers
8 Established management, marketing, and financial institutions to support local farmers Table 2 the Indian Second economic development plan (major objectives evolutions)
After laying down the major character of the economy during the first plan, the government continued the same path of developing the country during the Second
Economic Development Plan (ISEDP). One of the main aims in ISEDP was to rebuild the rural areas in the country. The government laid down the foundation of heavy industries in central and regional areas and farmers and handicraft industries in rural areas. The general motivation for this governmental policy was to secure balance in the economic development as a continuous goal from the first plan. This policy was also important to increase employment, production, and income in all of India (INDIA Republic of India., Planning Commission, 1956).
At the beginning of the second plan ISEDP, the government initiated a policy that controlled all large enterprises that were involved in public infrastructure and put them under its direct authority. Consequently. The government allowed private small
businesses to invest in farming in rural areas. This initiative led to a huge expansion in the public sector and extensive reduction of the private business, which harmed the economy badly in the fallowing years (INDIA Republic of India., Planning Commission, 1956).
Before the initiation of the five years’ plan, there were only three tiers of government control on all parts of the country: District, state, and central government, which
weakened the control of the central government on the rural areas. Thus, the government aimed to widen its control by focusing on the smaller villages and rural areas and created the Panchayats1. The government organized its system by dividing the administrative levels into four levels. The highest level was the central government. Then the central government had several states. Within those states there where several districts. In these districts, there were blocks. In each block, there were villages, which were the smallest level. Each village was ruled by a panchayat. This categorizing helped the government in further developing the rural areas by easing the control on these areas. Multiple districts connected with states authorities. Also, All states connected with the central government.
This new administrative policy was made to enhance the central government’s control in all parts of the country (INDIA Republic of India., Planning Commission, 1956).
The new government system increased the central government understanding of the true needs of the rural areas and helped the government in drawing their employment, educational, industrial, and technological needs accordingly. Furthermore, the new governmental system supported the government in providing financial assistance for regional and rural areas (INDIA Republic of India., Planning Commission, 1956).
The major task for the central government regarding rural areas during the second plan was as follows:
1- To provide technical and financial assistance to local agricultural producers, community projects, and village & small industries.
2- To create government organizations and public enterprises to undertake and build all public infrastructure and management systems.
3- To establish management, marketing, and financial institutions to support the