![](bg5.png)
2.6 The Missing Intercourse: The
Development of the Information
Economy and the Role of Diaspora
This chapter will present an analysis and verify the
diaspora's role hypothesis in terms of developing key
points in the IT sector in India that occurred over a
relatively short period of time. The analysis begins
with a review of the IT sector’s development issues
in developing countries. This was followed by a
problem review for India. After that, the discussion
continued in order to discuss the extent to which
diaspora can be the actor that becomes a solution to
the problem of developing the IT sector in a given
country. In the end, the subject focuses on how
Indian diaspora came in response to the problems
and become actors who began the process of
developing India's information economy.
First, the diaspora have the potential to become a
stronger transnational link between the diaspora and
the diaspora's home country. According to Safran
(1991), the diaspora tend to involve their homeland
early and with greater dedication than non-ethnic
investors. This is because the diaspora underlies
their actions with sympathy and solidarity. Second,
the interaction between diasporas and domestic
actors tends to be more reliable and lasting, and this
is called a trust network. A trust network is defined
by Tilly (2007) as a good network of interconnecting
relationships between diasporas and communities in
their home countries that facilitates the transfer of
ideas and resources from the outside to the domestic
actors. This is because the proximity of a shared
culture, history, and language that makes it easy for
the diaspora to be trusted by their country of origin.
Good relationships facilitate the transfer of ideas and
resources from the outside to the domestic actors.
Third, diaspora networks help to overcome
institutional and infrastructure constraints and
reduce transaction costs in investing in undeveloped
homeland markets (Chen and Chen, 1998). With
linguistic similarities and the knowledge of local
norms, diaspora are more likely to involve local
officials and economic actors. Support at the
domestic level can enhance economic liberalization
(Hsing, 1998).
Diaspora in the category of high-skilled workers
can also be a major actor in the process of the
transfer of technology and knowledge from
developed countries into their home country. The
process of technology transfer and knowledge
occurs when diasporas have been educated in
developed countries and return back to their home
countries, often becoming educators, businessman,
entrepreneurs and technocrats who are the main
drivers of the process of creating human capital and
forwarding the economic development of the
country (Saxenian, 2005). In many situations, the
diaspora also pave the way for the inclusion of
multinational companies and international research
and development institutions in their home
countries. This is possible because diaspora play a
role in bridging the link, allowing for collaborations
between the state and multinational corporations, as
well as international research and development
institutions as the subject of knowledge and
technology transfer (Saxenian, 2005). In other
words, the diaspora also have an indirect role as an
actor who opens the door of cooperation and who
inhibits the inequality of science, technology and
human capital between their home country and the
destination country.
Diaspora also help local entrepreneurs enable
economies in their home countries to participate in
the information economy (Saxenian, 2005). Their
professional network can quickly help to build
promising opportunities, raise capital, build
management teams, and build partnerships with
manufacturers in other parts of the world. The ease
of exchanging communication and information in
the network is localized by freedom, technology, and
the discussion of new skills, technology and capital,
as well as potential investors (Saxenian, 2005).
There are three roles underlying the rise of India's
information economy. In general, the diaspora
depiction becomes a bridge and an important link in
the economic view of information.
The explanation of this study is that an important
issue in India's information-economic development
efforts related to inadequate human capital can be
domestically produced by India to solve the urgent
need for human capital. The possible path for India
to build its IT sector and its information economy is
through diasporas. This is motivated by the absence
of significant efforts by India in relation to the
accumulation of human capital through the means of
applying for foreign workers or through the reform
and implementation of effective educational
policies. Therefore, diaspora have three major roles
in the development of the state. By pulling diaspora
back into the high-skilled worker category, a brain
reinforcement situation will occur and the problem
of human capital needs in India can be bridged.
Diaspora, when in the context of the
development of the information economy, serve as
an important link in the process of developing the
information economy. Through its three roles, the
diaspora can act as an important linking thread for
Development of the Information Economy in India and the Role of Diaspora
299