ABSTRACT
This chapter is based on the Vikram Sarabhai Memorial Lecture delivered on October 18, 1983, at the Indian Institute of Management in Ahmedabad. Sarabhai was a remarkable Indian scientist, engineer; and entrepreneur. From Adam Smith to contemporary mainstream economists, theorists have been schizophrenic in dealing with technology. Adam Smith enunciated one of the abiding grand themes of dynamic economic analysis when he contrasted the prospects for diminishing returns to agriculture with the prospects for increasing returns to manufactures. To use a phrase from development economics of the 1950s where “absorptive capacity” exists, technology transfer is likely to occur. A society experiencing a high marginal capital-output ratio, low capacity utilization, an excessive brain drain, and the other familiar ills of the Indian economy is unlikely to be voracious or even very quick off the mark in absorbing new technologies.
