The political economy of industrial strategy for competitiveness in the Third World: The electronics industry in Korea, Brazil and India

India started with a technological and industrial edge in electronics two decades ago but steadily fell behind both South Korea and Brazil despite specifically promoting the industry. This dissertation examines India's electronics industry in comparison with that of the above more successful Newly Industrializing Countries (NICs) for a critical case study of the political determinants of effective strategies for the development of competitive capability in new industries in the Third World. It is argued that the success of new industries in the NICs depends on state intervention establishing the appropriate policy framework. State policies have two important dimensions--economic and political. The economic requirements for competitiveness include correct choices of the timing of entry, specialization and phasing, taking into account economies of scale, capital and technological requirements, domestic capabilities and world market changes. These economic choices imply hard political choices between export-orientation and import-substitution, foreign and domestic firms, public and private sectors, and indigenous development and import of technology. Several political considerations affect these choices. The most important include the potential clash of interests between multinational and domestic capital, between both of these and the interests of local small industry, and between the state's perceived need for national technological autonomy to assure national security and the need for a pragmatic approach to multinational firms for gaining access to technology and foreign markets. The electronics industry provides an excellent focus for a study of the political constraints on industrial policy as it poses all these choices confronted by the state most sharply. I argue that India's relative lack of success is rooted in political-systemic constraints on the choice of an appropriate policy mix, and try to draw conclusions about the prospects for emulation of the export-oriented East Asian NIC model from a domestic political requirements perspective.