New Industries from New Places

Neil Gregory

Description

Software comes from India, hardware comes from China. Why is that? Why did China and India take such different paths to global dominance in new high-tech industries? Will their paths continue to diverge or converge? How can other countries learn from their successesùand failuresùin reaching global scale in new industries? To answer these questions, this book presents the first rigorous comparison of the growth of the IT industries in China and India, based on interviews with over 300 companies. It explains the different growth paths of the software and hardware sectors in each country, providing insights into the factors behind the emergence of China and India as global economic powers. It provides a compelling case study of how differences in economic policies and the investment climate affect industrial growth. This book sheds new light on common debates on China versus India, on why India is the software capital of the world while China is a manufacturing powerhouse. It refutes common myths about the growth of these industriesùfor example, the role of Non-Resident Indians or the Y2K problem in the growth of the Indian software industry, the role of government intervention in industrial growth, and the relative size of China and India's software industries.

Informations

• Publié par: world-bank-publications
• Publié le: 19 mars 2009
• Nombre de lectures: 37
• EAN13: 9780821364789
• Langue: English

Extrait

The Emergence of the Software and Hardware
Industries in China and India
New
Industries
from New
Places
Neil Gregory
Stanley Nollen
Stoyan Tenev
STANFORD UNIVERSITY PRESSNew Industries
from New PlacesNew Industries
from New Places
The Emergence of the Software
and Hardware Industries in
China and India
Neil Gregory
Stanley Nollen
Stoyan Tenev
A COPUBLICATION OF STANFORD ECONOMICS AND FINANCE,
AN IMPRINT OF STANFORD UNIVERSITY PRESS, AND THE WORLD BANK
Washington, D.C.
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A copublication of Stanford Economics and Finance, an imprint of Stanford University Press, and the World
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ISBN (soft cover): 978-0-8213-6478-9 ISBN (soft cover): 978-0-8047-6281-6
ISBN (hard cover): 978-0-8213-7785-7 ISBN (hard cover): 978-0-8047-6280-9
eISBN: 978-0-8213-7784-0
DOI: 10.1596/978-0-8213-6478-9
Library of Congress Cataloging-in-Publication Data
Gregory, Neil F.
New industries from new places : the emergence of the software and hardware industries in China and
India / by Neil Gregory, Stanley Nollen, and Stoyan Tenev.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-8213-6478-9 (world bank pbk.) — ISBN 978-0-8213-7784-0 (electronic) —
ISBN 978-0-8213-7785-7 (world bank hardback) — ISBN 978-0-8047-6280-9 (stanford university
press hardback) — ISBN 978-0-8047-6281-6 (stanford university press pbk.)
1. Computer software industry—China 2. Computer software industry—India. 3. Computer
industry—China. 4. Computer industry—India. I. Nollen, Stanley D. II. Tenev, Stoyan, 1961–
III. Title.
HD9696.63.C62G74 2009
338.4’70040951—dc22
2008051221
Cover image: NASA satellite photo of the earth at night.
Cover design by Critical Stages.Contents
Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
About the Authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
Part I Foundations
1 Context for the Study of the Software and Hardware Industries in
China and India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2 A Framework for Understanding Industry Performance Differences . . . . 21
3 The Legacy of China’s and India’s Investment Climates . . . . . . . . . . . . . . . 31
Part II Software
4 Software Industry Performance in China and India: An Introduction . . . 55
5 The Influence of Factors of Production on Differences in the
Software Industries of China and India . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6 The Influence of Management on the Software Industries in
China and India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7 The Effects of the Business Environment and Competition on
Software Industries in China and India . . . . . . . . . . . . . . . . . . . . . . . . . 115
8 Summary of Factors behind the Success of China’s and India’s
Software Industries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Part III Hardware
9 Hardware Industry Performance in China and India:
An Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
10 The Influence of Factors of Production on the Hardware
Industries in China and India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
11 The Influence of Management on the Hardware Industries in
China and India 169
vvi New Industries from New Places
12 The Effects of Business Environment and Competition on Chinese
and Indian Hardware Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
13 Summary of Explanations for the Different Outcomes for China’s
and India’s Hardware Industries 209
Part IV Summary and Conclusions
14 Why Software and Hardware Industries Differed in China and India. . . 215
15 Emerging Trends in the Chinese and Indian Software and Hardware
Industries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
References and Other Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
Boxes
3.1 China’s Early Approach to Science and Technology (S&T) . . . . . . . . . . . . 49
5.1 The China Brain Drain Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.2 Infosys Technologies: Software Startup with Early Self-Financed
Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.1 UFIDA Software Ltd.: Risk-Taking Pays Off . . . . . . . . . . . . . . . . . . . . . . . . 93
6.2 Tata Consultancy Services: A Hard Alliance as a Springboard to
Software Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
6.3 HiSoft: A Wholly Foreign-Owned Enterprise in China . . . . . . . . . . . . . . 106
6.4 NRI Founds Software Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
7.1 SUPCON: Technology and Management Support from the
Chinese Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
7.2 Wipro: From Edible Oils to Hardware to Software . . . . . . . . . . . . . . . . . 122
10.1 EVOC Intelligent Technology: Access to Flexible Labor and
Advanced Technology 167
11.1 Technology Transfer through FDI: Suzhou. . . . . . . . . . . . . . . . . . . . . . . . 174
11.2 Huawei Technologies: International Leadership through
Advanced Technology and Chinese Government Support . . . . . . . . . 176
11.3 Moser Baer: An Exception to the Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
11.4 Siemens: A Foreign-Owned Company’s Success in China. . . . . . . . . . . . 180
11.5 HCL Perot in India: From Import-Protected Hardware to Software . . . 181
12.1 Hical: Indian Hardware Supplier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
12.2 The Development of the Semiconductor Industry in China:
Governments Pitch In. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
12.3 China’s Hardware Companies Go Global . . . . . . . . . . . . . . . . . . . . . . . . . 206
Figures
3.1 Manufacturing as Percentage of GDP in China and India, 1968–2002 . . 37
3.2 GDP Growth in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Contents vii
3.3 Foreign Investment in India: 1993–2005. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.4 Annual Exports of Goods and Services from India: 1990–2004 . . . . . . . . 46
3.5 Average Telecommunications Tariff Rates in China and India . . . . . . . . . 47
4.1 Software Industry Revenue over Time for China and India . . . . . . . . . . . 58
4.2e Industry Domestic and Export Sales Revenue over Time
for China and India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.1 Framework for Explaining Labor Productivity and Unit Labor Cost
for Firms. . . . . . . . . . . . . .