In The Indian Software Industry, A Comparative Analysis

The advancement of the science and technology is the fundamentfactor of the ceaseless development of the word economy. The reason ofthe several Industry Revolutions in the history is nothing but theaccelerating science and technology. It has changed the style ofmanufacturing and promoted the economic development. At the moment,it is vital for a country to grasp the opportunities and achieve thespeeded increase of the national economy. It will also greatly determinethe economic level and the politics role of the country in a long time.The times of Information Economics has come now. The softwareindustry is the foundation of the technological revolution of theinformation. It is very permeable and can nearly combine with all thetraditional industries. It can drive the transformation of the traditionalindustry and the improvement of the equipment greatly which promotesthe updating of the industries. It has already become the most importantstrength to promote the economic and social development of the word.In order to grasp the opportunity to establish a favorable position in theglobal software industry chain, every country in the word has alreadyregarded the software industry as the focus of its global competition.Each one has made the goal and the strategy to develop the softwareindustry which is based on the national conditions and has formed itsown way to develop the industry gradually.China and India both lay great emphasis on developing thesoftware industry and have similar starting time, but there is greatdifference in the development of the software industry between the twocountries. Under the background, this paper gives comparative analysison the factors affecting the development of the software industry inChina and India, in order to give some relevant suggestions for thedevelopment of Chinese software industry. This paper provides sometheoretic and realistic help for the Chinese software industry. Based on the Competitive Advantage Theory of the well-knownAmerican economist Michael E. Porter, this paper mainly compares thesoftware industry of the two countries with the theory of The DiamondModel from six aspects, the production factors, demand factors,relative and supplementary industry,the strategy, structure and the waysof competition of enterprises,the function of the government andopportunity. At last, we find the difference between the softwareindustries in the two countries are as follows. Firstly, the pattern ofcultivating the talents of software industry in China is not fit for theneeds of markets and needs reform through learning successful lessonsfrom Indian pattern. Secondly, China not only doesn't make full use ofthe big domestic software and service markets, but also the outsourcingmarkets like India. Thirdly, there are some software gardens in China,but the extent of their receiving the support and help fromgovernment and the infrastructure of construction in the softwaregardens are secondary to those in Indian software gardens. Fourthly, onone side, the scale of Chinese software enterprises is much smaller thanthat of Indian enterprises. On the other side, the quality management ofChinese enterprises also needs much improvement. Fifthly, thesupporting policies carried out by the Indian government play key roleon the development of Indian software industry. While Chinese softwareindustry policies are drafted later and lack the relevant detailed rules.Finally, from the initial stage to the Middle of the 90s, the Indian countrygrasped three historic opportunities such as the Y2K problem, thecontinuous increase of American economy and the emergence of EUR,which promote the continuous and fast increase of the Indian softwareindustry. While in the 21ST century, there will be more opportunities forthe development of Chinese software industry. If China grasps thefollowing opportunities such as the outsourcing of software service, thedemand of domestic software enterprises and striding across the stage ofthe world, it will win some share in the international software market.Firstly, this paper states the main content of the theory of competitive advantage. Secondly, it gives the current situation of thesoftware industry in India and China. It analyses how India transform itscomparative advantage to competitive advantage in the field of softwareindustry with the theory of The Diamond Model from six aspects. Lastly,it discusses the development of the software industry in our country andgets enlightenment from the Indian software industry.This paper puts forward the relevant suggestions for thedevelopment of Chinese software industry based on the differencebetween the two countries' software industry. Firstly, the developmentand cultivation of the human resource in the software industry should beimproved greatly. Secondly, the international markets should beexploited so as to enhance the international competitiveness of thesoftware industry. Thirdly, the software enterprises should enlarge thescale and enhance the quality management. Finally, China shouldimplement the policies of the software industry further.