Wednesday, August 26, 2009



China and India are totally different other than the fact that both have a large population and both are extremely poor. The contrast could not be sharper. They look different, talk differently and follow different growth models. China is planned, top-down and authoritarian while India is chaotic, anarchistic and democratic. Chinese are low-key and reserved while Indians are talkative and outgoing. China is also quietly focused while India is overly optimistic. After the 1991 reforms undertaken by India, the two Asian mammoths have marked their presence in the global industrial scaffold in the form of two of the fastest growing economies, and one of the factors which has provided the much needed impetus is the marked presence of both the countries in the software industry. Both the countries enjoy a humongous lead in the software industry though several different factors have been responsible for the stupendous pace at which both the countries have propelled in this industry. In the first ten months of 2008, China’s software exports value surged by 51.3% year-on-year to US$ 11.7bn, with the software outsourcing services accounting for US$ 1.01bn, up by 47.2% year-on-year but with the growth rate standing 23.3 percentage points lower than the rate for the first nine months of the year. India’s software and services exports will cross $40 billion in fiscal 2008 with the domestic market estimated at $23 billion.

Arguments in favor of the topic

More and more Chinese universities are setting up specialized training modules for students in the software and the IT-sector and for the first time in the Chinese academic history, the instructions are being carried out in English language.

· Chinese experts are starting local software and service companies. Such companies will be very successful training grounds for future local entrepreneurs. They will add to the speed of local development. Combine these with relatively open policies of the local government in enabling the starting of new ventures and you can have a rapid increase in new companies.

· The Chinese Communist government has been a clear advocate of the top-down
management principle which makes the management norms and processes much less
time consuming and gets rid of the time consuming model followed by their Indian
counterparts. The Chinese also enjoy more logistic support in the form of better
infrastructure facilities.

· Although the Indian software industry enjoys innovative excellence over their Chinese counterparts, Chinese software majors are better equipped in providing the software backup and maintenance facilities. The Chinese also enjoy better emulating efficiency thanks to their high average “IQ” (China stands at the top most position in the list of the average IQ).

· The Indian software industry is more vulnerable thanks to the higher dependence on the western corporate customers. More than a quarter of the Indian software business was from the United States, whereas China on the other hand is more dependent on its
domestic market and a major share of the revenues is received from the domestic market itself which makes it less vulnerable to international conditions.

Arguments against the topic

· India surely enjoys a lead over China, thanks to its low cost model which is difficult to emulate, followed by the number of cost benefits such as the cheapest available manpower after countries like Argentina and Brazil, which makes the Indian software industry a more lucrative proposition.

· India also scores over China as it enjoys the benefits of having the largest English speaking population (even more than the United Kingdom) which makes it easier for the Indian software experts to understand the demands of their foreign customers.

· India also enjoys the lead thanks to the biggest pool of technocrats and engineers; it churns out more then 400000 engineering professionals every year and the efficiency of an Indian software graduate is considered more than above average as compared to software professionals belonging to any other part of the world as per the software industrial norms.

· India also benefits as it enjoys a democratic government as compared to its “communist counterpart” China which makes the Indian industry more transparent and flexible in its working. India also enjoys an early lead advantage in the form of three of its companies ranking among the top-5 software firms in the world. China concentrates more on its domestic growth, whereas the Indian software industry in more dependent on exports and outsourcing.

· India’s long-term potential may be greater than China’s as the communist giant faces a shrinking work force due to its “one child policy” whereas India enjoys an ever increasing work force. Population, in this case, seems to act as a boon for the Indian software industry rather than a liability.

· According to DBS, Nasscom is targeting $60 billion worth of Indian exports by 2010, while the Chinese government wants software exports to hit just $10 billion that same year. India’s software and services exports will cross $40 billion in fiscal 2008 with the domestic market estimated at $23 billion.


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