Factors that contribute in success of Indian IT Industry
The Indian software industry has been a remarkable growth story. Its revenue comes predominantly from software exports, two-thirds of which are made to US. In the 20-25 years since the beginning of software industry in India, it has been able to catch up – successfully access, learn, and develop—to the technological standards of the global leaders while other developing countries lag behind. Several factors, least of which includes the role of institutions and government, have contributed to this success.
In the initial days of the global software industry, Indian software firms quickly moved up the value chain, from performing low cost programming abroad in the initial phase to providing comprehensive software development services from India for overseas clients. An abundant pool of Indian technical manpower, due to early government investment in technical education, created a pool of elite technical and management institutes that responded to a severe global shortage of technical manpower. Indian firms sent the English-speaking, trainable and ambitious staff to onsite client facilities in the United States.
Indian professionals in Silicon Valley built personal networks and used their growing influence within US companies to help Indian companies get a share of the ever expanding opportunity of outsourced IT work. Once the potential of software exports was demonstrated, Indian Government helped build a high-speed data communication infrastructure, which allowed overseas Indians to return home and set up offshore sites for U.S. clients. The Indian “brand” image for affordable speed and quality grew.
Intense quality and productivity improvements improved the value of Indian software firms for overseas clients and today these Indian companies deliver a wider range of software development tasks, as well as benefits in new service segments such as product design and information science (IS) outsourcing. Many firms have met top certification requirements for quality standards in demand around the world.
Selective support to software industry by a few enlightened bureaucrats, in an otherwise restrictive business environment and the role of NASSCOM in influencing policy towards the industry have also been key factors in growth of the industry. At the same time, lack of effective implementation of restrictive policies also helped software industry in the early phase.
Thus, an early mover advantage, a pool of talented engineers ready to take up jobs as programmers, and supportive government policies were the major factors for Indian software industry to catch up with the global leaders in contrast to other developing countries.
