THIRUVANANTHAPURAM: The Indian economy needs a massive dose of technological innovation if it is to overcome the threats posed by rising unemployment and widening income disparities, State Planning Board member Prabhat Patnaik said here on Friday.

Inaugurating a seminar on `R&D needs for regional development' at the Regional Research Laboratory, he stressed the need for the manufacturing sector in the country to evolve an independent path driven by innovation.

"The absence of innovation implies that no matter how high the economic growth, India cannot emerge as a leader in the global economy. It will only create islands of affluence in a sea of poverty, deprivation and inequality. Key sectors such as textiles, IT, drugs and automobile components thrive largely on technologies and processes that migrate from advanced countries. This kind of growth is parasitic," he said.

Mr. Patnaik said the use of borrowed technology for production of goods and services only implied the availability of cheap labour in India. The lack of innovativeness has made the country subservient to foreign technologies and process, reducing it to no more than a glorified processing backyard of the world.

Mr. Patnaik cited the case of China where the manufacturing industry had clocked an impressive growth rate exceeding 12 per cent, while employment growth rate was zero per cent. This had given rise to serious social and economic inequalities. But China today is obsessed with innovation, he pointed out.

Mr. Patnaik warned that foreign direct investment (FDI) in the retail sector would displace traditional jobs and fuel jobless growth in the country. He called for a suitably formulated `income policy' to help retain precious human resources.

Delivering the keynote address, Prof. R.V.G. Menon said a vibrant R&D sector was crucial to sustainable regional development that focuses on improving the quality of life and generating employment.

RRL deputy director B.C.Pai presided.

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