32 A. Vaidyanathan build up the indigenous technological capability in strategic areas. Early experience showed that allowing free import of technology/know-how to upgrade th^ quality of consumer goods leads to a spate of collaborations to make products like coca cola and of screw-driver technology to make television sets, motorcycles, automobiles and other symbols of twentieth-century consumerism. Moreover, the pace of technical progress and product innovation in the developed countries is so very rapid that if countries like India and China always want the latest and the best there is a danger of persistent and possibly increasing dependence on foreign know-how. Therefore, there needs to be a conscious long-term strategy which combines a high degree of selectivity in technology imports, favouring those processes/products/components where the magnitude of immediate and prospective gains is likely to be large, with simultaneous efforts to develop indigenous capability to adapt known processes/ designs, and to master and improve upon imported know-how. This involves purposeful coordination of research, design and engineering capabilities and the machine-building industry. An adequate scale of effort (in terms of personnel and funding) is of course necessary. But far more important and difficult is creating the medium for effective interaction between these various activities inter se and with industry. The Chinese, like us, seem to be groping in these respects. The initial exuberance seems to have given place to a somewhat more cautious attitude, but a coherent long-term strategy is yet to crystallise. The other danger, again common to India and China, of liberalising foreign know-how for modern consumer goods, lies in two directions : while there is undoubtedly a large pent-up demand for many of these goods, they also bring in consumption patterns and life-styles very different from those prevalent in these countries. Not only does this accentuate the existing divide in the society, but many of these new products are of a kind which directly or indirectly compete with existing indigenous wares, the making of which currently provides quite a large volume of employment. The newer products, unless one goes in for assembling of imported parts, involve a level of technique and skill which is outside the reach of much of the established indigenous industry. If they cannot easily adapt to the change, it could throw sizeable numbers in the traditional established industries out of work. The changes in industrial organisation and planning envisage loosening of central regulation, much greater autonomy for enterprises in determining production patterns, use of profits and in investment decisions along with greater accountability for their performance. They seek to give a greater role for collective and even private enterprise, as distinct from State-owned enterprises; a more flexible pricing system reflecting the interplay of supply and demand; and changes in the internal organisation of firms to ensure better correlation between reward and performance. This aspect of the Chinese reform involves far more drastic change than in India, which