U.S.-India Technology Cooperation and Capability Buildingreviews some Indo-U.S. technology cooperation initiatives and analyzes data on interfirm alliances in knowledge-based industries, especially information technology (IT). It shows that the market driven increase in alliances between Indian and U.S. enterprises has significantly enhanced the variety of linkages between Indian and U.S. entities both public and private, and that these linkages have contributed to capability building and diversification by Indian partners. A variety of spillover benefits of international technology alliances are highlighted. It is suggested that issues relevant for Indo-U.S. cooperation at different levels need to be analyzed together in order to appreciate complementarities across linkages of various types. For example, linkages between public sector entities of the two nations may enhance the potential of private sector networking initiatives. The paper argues that while the building of public institutions and policies relating to trade, technology, and investment remain important for Indo-U.S. technology cooperation, a shift in policy focus to market induced interfirm alliances may be desirable.

This paper was prepared when the author was a Jhamandas Watumull Visiting Fellow at the East-West Center. Supported by the Jhamandas Watumull Fund, the fellowship seeks to promote ecnonomic and technology cooperation between India and the United States through research on key issues in their bilateral relations in these sectors.