Competitiveness of India's software industry: A macro level analysis

Abstract

India's software industry has grown in a spectacular fashion. Given the external and internal factors affecting the software industry, the basic question is whether India's software industry has improved its competitiveness in relation to its competitors like Ireland, China, Russia, Singapore, etc. The present paper has developed a software competitiveness index to measure the competitiveness of software industry of selected countries from the advanced economies and emerging economies. The index is based on its strength in business environment, human resource endowment and technological development. The study found that Singapore has the most competitive software industry among all countries considered. Among the emerging economies, Israel occupied first position and followed by China. India has third position among the emerging economies and Eleventh position among all countries taken together. Component wise analysis of software competitiveness index revealed that, India is very weak in technology base as compared to our competitors. The implications of the study are that (i) India has to compete with mainly China and Israel to improve its software exports and (ii) India should improve its technological base in order to catch up with China and Israel, and (iii) India has to go a long way to reach the league of advanced nations in the competitiveness of software industry.