Capability Building and Innovation in the Offshore IT Services Industry in India and China
Capability Building and Innovation in the Offshore IT Services Industry in India and China INstitUTE FOR EMERGING MARKET STUDIES (IEMS) MoscoW SCHooL OF MANAGEMENT SKOLKOVO IEMS Emerging Market Brief Vol. 14-04, October 2014 IEMS EMERGING MARKET BRIEF // OCTOBER, 2014 Author: Vinod K. Jain, Ph.D. Visiting Senior Research Fellow Editor-in-Сhief: Vladimir Korovkin Head of Digital Research IEMS EMERGING MARKET BRIEF // OCTOBER, 2014 Contents I. Introduction 2 II. Emerging Markets’ Need for Big Four Infrastructure Investment 4 III. Effective Demand for Infrastructure (How Much Will They Pay?) 8 IV. Cashing In On the Infrastructure Gold-Rush 12 V. Growing Emerging Markets for Infrastructure 18 VI. Conclusion 28 Appendix: How Did We Arrive At Our Estimates? 30 CONTENts 1 IEMS EMERGING MARKET BRIEF // OCTOBER, 2014 I. Introduction 2 I. INTRODUCTION IEMS EMERGING MARKET BRIEF // OCTOBER, 2014 Multinational enterprises (MNEs) from IT services firms developed countries have been out- sourcing manufacturing to developing in India and China, became countries for decades to benefit from their comparative advantage in labor dominant by making serious costs, and increasingly to be close to and continuing efforts to acquire their key markets. In the 1990s, how- ever, MNEs also started outsourcing and develop the knowledge, white-collar service functions, like skills, and capabilities needed software development and customer relationship management, to develop- by their foreign clients ing and middle-income countries, such as India, China, and Central and Eastern Europe – countries that offered skilled labor at low cost. Rising costs and competitive nant in the global IT services industry remains pressures, and a lack of adequate talent at home, largely unanswered.
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