Wednesday, May 04, 2005

India ahead in software outsourcing

Posted online: Tuesday, April 12, 2005 at 0432 hours IST
April 11: China is unlikely to create a software outsourcing firm that can rival the Indian giants of the industry for some time to come. This is largely due to limited domestic demand, piracy and lack of skilled personnel, the International Finance Corporation, the World Bank's private sector funding arm, has said.
Despite English being a top priority in the Chinese education system, China cannot compete in language-intensive outsourcing areas with countries where English is a native language, such as India and Ireland. On the other hand, growth of Indian firms in China would clearly present a competitive challenge to Chinese outsourcers.
According to an IFC report, titled "The ICT landscape in the PRC: market trends and investment opportunities in China," released in March, given the small size of China's pure-play outsourcers today, it may take years for a company comparable to leading Indian outsourcing firms to develop. Unlike India, where large Indian firms dominate the software outsourcing market, foreign companies moving their own software development operations to China are key drivers in China's outsourcing market.
The report is crucial as the Chinese prime minister Wen Jiabao has called for cooperation and collaboration between India and China to lead the world IT market.