ABSTRACT
Being increasingly noticed for the rapid growth of knowledge-intensive activities, both India and China suffer from the lack of capacity to translate these knowledge/information activities into economic development. It is important to outline some mechanisms which support innovation efforts and which can help improve the productivity and living standards of the people in the vast informal economies of China and India. That is to say, it is necessary to not only to reduce the cost of or increase the availability of goods and services needed by the poor, but, more importantly, to also facilitate a sustainable improvement in living standards and productive income-generating opportunities for the poor, through building innovation systems and capabilities for so-called inclusive development. “Inclusive development” refers to “growth coupled with equal opportunities.” It focuses on creating opportunities and making them accessible to all, not just the poor. There is inclusive growth when all members of a society participate in and contribute to the growth process equally, regardless of their individual circumstances (Ali and Zhuang, 2007).
