The Indian Software Services Industry

Heinz School Working Paper No. 99-19

46 Pages Posted: 7 Feb 2000

See all articles by Ashish Arora

Ashish Arora

Duke University - Fuqua School of Business; National Bureau of Economics Research; Duke Innovation & Entrepreneurship Initiative

V.S. Arunachalam

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Jai Asundi

Center for Study of Science, Technology and Policy

Ronald Fernandes

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Date Written: December 1999

Abstract

This paper provides an analytical description of the Indian software industry, with a special focus on the software exports from India. We use a variety of sources, including a questionnaire survey of Indian software firms, and field visits and interviews with industry participants, observers, and US based clients. The Indian software industry is remarkable in a number of respects. It is service rather than product oriented, heavily export oriented, and is largely managed by professional and entrepreneurial managements. Also, domestic market experience and expertise appears to have had only limited benefits for successful importers. Although the industry has grown in spectacular fashion, sustaining this performance will pose a number of challenges. In order to counteract the widely reported shortages of skilled software professionals and the possible competition from other low wage, human capital rich countries, Indian firms are trying to move up the value chain by acquiring deeper knowledge of business domains and management capability, and to reduce costs by developing superior methodologies and tools. Whether and how many firms will be a key test of the management skills and willingness to invest along a number of dimensions. From a social perspective, the disconnect between domestic and export markets is a major challenge, but one that the growing diffusion of computers and the improvement of the communication infrastructure should make easier to confront. In the end, the greatest impact the software industry is likely to have on the Indian economy is indirect, in its role as an exemplar of the new business organisational form and as an inspiration to other entrepreneurs.

JEL Classification: O1, L8

Suggested Citation

Arora, Ashish and Arunachalam, V.S. and Asundi, Jai and Fernandes, Ronald, The Indian Software Services Industry (December 1999). Heinz School Working Paper No. 99-19. Available at SSRN: https://ssrn.com/abstract=198968 or http://dx.doi.org/10.2139/ssrn.198968

Ashish Arora (Contact Author)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

National Bureau of Economics Research

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

V.S. Arunachalam

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Engineering and Public Policy
Pittsburgh, PA 15213-3890
United States
412-268-7902 (Phone)

Jai Asundi

Center for Study of Science, Technology and Policy ( email )

Mayura Street, Nagashetyhalli
RMV Extension Stage 2
Bangalore, 560094
India
+918066902542 (Phone)

HOME PAGE: http://www.cstep.in

Ronald Fernandes

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Engineering and Public Policy
Pittsburgh, PA 15213-3890
United States

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