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China's IT engine steams past India

While India's software industry is busy overcoming policy constraints and an inadequate domestic market, neighbouring China which boasts of having the largest manufacturing base in the world is on the verge of becoming the leading information technology player in the Asia Pacific region, touching $30 billion.

On the other hand the ''Indian software industry is operating under systemic constraints of infrastructure, inconsistent government policy and inadequate domestic market,'' according to NASSCOM.

In the face of external constraints, Indian software companies need to improve productivity,(yield per employee) through bettwer OFT (organisation of functions and tasks-capacity utilisation), better mix of service lines, standardise processes and develop component libraries.

In recent times, there has been substantial news flow about how China poses a significant threat to Indian software industry.

Nasscom, the apex body of software and service companies in India, conducted a study on the Chinese IT market, with a special focus on the software industry. He study points out that the Chinese government has shown clear intentions of dominating the IT sector, one of the largest industries in the world.

For India, innovations are needed in pricing models (risk-reward share), delivery models (global development centres) and service mix (network management, systems integration and technology services), NASSCOM suggests.

Alliances must be forged, which could be temporary (for customer access, bid for large, complex projects), and/or permanent (to add service lines, or rationalise industry capacity). There is also a need to collaborate with academic institutions to develop leading edge software methodologies and component libraries, to update curricula.

The announcement of a software policy in June 2000 in China reflects a carefully crafted taxation policy, investment and funding strategies, strong focus on setting up high-tech zones, ways to encourage English usage, desire to enhance domestic competitiveness against the backdrop of WTO (World Trade Organisation) to ensure IT growth.

UNI

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