UPSC Syllabus Topic: GS Paper 3 -Growth and development
Introduction
Long phases of economic change shape global power, production systems, and technology leadership. These phases are driven by clusters of breakthrough technologies that transform how economies function. As the digital economy matures and new frontier technologies converge, another long wave of growth is emerging. India enters this phase with stronger platforms, policy intent, and scale than in previous transitions.
What are Kondratiev Waves?
Kondratiev Waves are long-term cycles of economic growth and slowdown, named after the economist Nikolai Kondratiev, who first identified this pattern in the early 20th century. He observed that capitalist economies do not grow in a straight line. Instead, they move in long phases lasting about 40–60 years, shaped by major technological changes.
Each wave begins when a new set of technologies spreads across the economy, raising investment, jobs, and productivity. As these technologies mature, growth slows, and the economy waits for the next breakthrough.
The first wave (1780–1830) was driven by steam power and textile mechanisation.
The second wave (1830–1880) centred on railways, coal, and iron.
The third wave (1880–1930) grew around electricity, chemicals, and mass production.
The fourth wave (1930–1980) was led by automobiles, oil, and petrochemicals.
The fifth wave (1980–2030) is based on information technology, computers, and automation.
Countries that adapt early to each wave grow faster and gain economic leadership.
India’s Historical Engagement with Kondratiev Waves
- Limited role in early waves: India remained peripheral during the first three waves driven by steam, railways, electrification, and chemicals. Colonial constraints limited industrial and technological participation.
- Marginal presence in the fourth wave: The automobile and petrochemical wave reshaped mobility and geopolitics, but India played a limited role and depended on imports and licensed production.
- Partial gains in the fifth wave: During the IT-led wave, India benefited from software and services exports. However, it did not shape core digital platforms or frontier technologies.
The Sixth Kondratiev Wave
- Deep technologies as the core: The sixth wave is expected to be driven by artificial intelligence, quantum computing, biotechnology, advanced materials, space systems, and clean energy. These technologies are science-intensive and capital-heavy.
- Convergence across sectors: Unlike earlier waves, technologies now reinforce each other. AI accelerates drug discovery, materials design, manufacturing optimisation, and climate modelling.
- Mission-led innovation: This wave is shaped by global challenges such as climate change, health security, and supply-chain resilience. Public platforms, regulation, and long-term coordination matter as much as private enterprise.
India’s Emerging Position in the Sixth Wave
- Digital public infrastructure as a platform: By 2024, the Unified Payments Interface processed about 172 billion transactions, rising to around 228 billion in 2025. It functions as a general-purpose economic rail for payments, credit, and data-driven services.
- Transformation in the space sector: India’s space ecosystem has moved beyond a purely state-led model. With reforms involving ISRO and IN-SPACe, private firms now participate in launches, satellites, and downstream analytics.
- Clean energy and green hydrogen: Mission-led coordination has accelerated green hydrogen pilots in manufacturing and mobility. Projects such as electrolyser-based plants and hydrogen-powered train prototypes show movement from policy to execution.
Way Forward
- Mission-mode coordination across sectors: The sixth wave demands mission-led outcomes rather than isolated innovation. Climate action, health security, energy transition, and supply-chain resilience require coordinated action by the state, science agencies, and industry.
- Strengthening digital public infrastructure as economic rails: Digital platforms must function like railways and electricity did in earlier waves. India’s digital public infrastructure should continue to support payments, data flows, analytics, and AI-driven services across sectors.
- Institutional alignment of research, capital, and industry: Deep technologies need platforms that translate research into production. The Anusandhan National Research Foundation and the ₹1 lakh crore RDI Fund aim to align frontier science, public funding, and private participation at scale.
- Ensuring patient capital for long innovation cycles: The sixth wave requires financing that matches long development timelines. Capital must support sustained experimentation rather than seek short-term commercial returns.
- Building convergence across frontier technologies: Success depends on linking technologies, not treating them separately. AI must accelerate materials discovery, clean energy must integrate with digital grids, and biotechnology must combine data, automation, and manufacturing.
- Rule-making, standards, and global integration: Leadership in this wave depends on shaping norms. AI safety rules, hydrogen certification standards, quantum security protocols, and medical technology regulations will decide who sets markets and who follows.
Conclusion
The sixth Kondratiev wave is taking shape around deep technologies and mission-led innovation. India now has scale, talent, data, and policy alignment that were absent earlier. If institutions, capital, and regulation stay focused on long cycles, deep technology can become part of national economic infrastructure and strengthen productivity, sovereignty, and global economic influence by 2047.
Question for practice:
Examine how the emergence of the sixth Kondratiev wave creates a structural opportunity for India, and assess the factors that will determine whether India can successfully ride this long phase of technology-led growth.
Source: Businessline
