Digital Technology and Manufacturing: Theoretical Underpinnings and Certain Evidence from India

Digital technology fosters innovation in many ways. There are three prominent ways through which technology, especially digital technology, can influence the manufacturing growth rate of an economy. The paper discusses these channels in detail. Apart from explaining the theoretical process behind digitalisation in influencing innovation, the paper also highlights the progress that India has made over the years in the digitalisation of the economy. Since it is estimated that by 2030, one fifth of India's national income will be contributed by the digital economy it is very apparent that policy interventions need to be made to meet the challenges and opportunities thrown up by digitalisation in future.