As a new national government takes shape in India, promising to increase growth while also broadening the set of beneficiaries of that growth, the country’s technology and business services industry has provided its own blueprint for continued success.Some of the challenges faced by India’s technology and business services industry are exemplified by the global financial crisis, the recession that followed and policy changes that may be undertaken by the Obama administration to discourage outsourcing.
&nbs... There is an obvious need to explore new sectors, geographic markets and customers, moving away from a strong dependence on serving the needs of US information technology (NYSE:IT) and financial services firms.Perhaps the most important market that can be served more fully is the domestic market, across a range of needs.
&nbs... Empirical studies from industrial countries indicate that realizing these productivity gains requires complementary organizational innovations. Other work establishes that managerial practices and efficiency vary tremendously across Indian firms. Putting all this together, one can conclude that there is an interrelated set of issues that needs to be addressed.
&nbs... Essentially, a regulatory environment needs to be created that allows businesses to start, expand and shut down more easily and rapidly than is currently possible. Creative destruction, combined with a better supply of key inputs such as talent and infrastructure, could give Indian industry a productivity boost.