Software Ousourcing to India
Software Technology Parks of India
Software Technology Parks of India (STPI) is a
government agency in India, established in 1991 under the Ministry
of Communications and Information Technology, that manages the
Software Technology Park scheme. It is an export oriented scheme
for the development and export of computer software, including
export of professional services. It provides physical infrastructure,
including dedicated high speed connectivity to technology parks,
freedom for 100% foreign equity investment and tax incentives. STPI
provides the physical hosting for National Internet Exchange of India.
STPI claims that it has played a seminal role in India earning a
reputation as an information technology superpower. More than 6,000
businesses are registered under the STPI umbrella, with 36% growth
by value in 2005-06 exports over the previous year. The state with
the largest export contribution was Karnataka (see Bangalore).
STP schemes are for providing facilities to IT industry to underatke
software development and IT enabled services for 100% exports using
data communication links in form of physical exports icluding
exports of professional services
Excerpt from "Software Technology Parks of India." Wikipedia, The Free Encyclopedia.
14 Sep 2006, 05:06 UTC. Wikimedia Foundation, Inc. 28 Oct 2006
http://en.wikipedia.org/w/index.php?title=Software_Technology_Parks_of_India&oldid=75648410 Outsourcing
Outsourcing entered the business and management
lexicon during the 1990's and is often defined as the delegation
of non-core operations from internal production to an external
entity specializing in the managment of that operation. The
decision to outsource is often made in the interest of lowering
firm costs, redirecting or conserving energy directed at the
competencies of a particular business, or to make more efficient
use of worldwide labor, capital, technology and resources. Though
often used interchangeably, "outsourcing" differs from "offshoring"
in that "outsourcing" is relative to the "restructuring" of the
firm while "offshoring" is relative to the nation (see below).
...
Benefits of outsourcing
The fact that many large businesses outsource and continue to
outsource suggests that, in many cases, outsourcing is successful
in that it increases product quality, lowers costs substantially,
or both. Some economists have argued that outsourcing is a form of
technological innovation analogous to machines on a car assembly
line. Ford Motor Company relied heavily on workers in the past to
assemble car parts. Today these workers are replaced by machines
because they are cheaper in the long run, produce better quality
products, or a combination of the two (the firm is trying to increase
its quality to cost ratio, quality being defined by the consumer
and inferred from revenue). Economists state that machines on the
car assembly line must have a higher quality to cost ratio than
workers because, if they didn't, there would be no incentive for
the firm to replace workers with machines. Although workers’ jobs
were lost from this replacement of workers with machines, the Ford
Motor Company made more money by lowering costs (and increasing
quality, thereby increasing revenue). Some argue that greater
profits to the labor owners lead to higher consumption, which leads
to further job creation, allowing those who lost jobs to gain jobs
in other sectors of the economy. A firm's motivation for replacing
workers with machines is identical to the motivation for outsourcing,
i.e. the firm is trying to maximize the quality of its product given
cost (its productivity). Because outsourcing allows for lower costs,
even if quality reduces slightly or not at all, productivity increases,
which benefits the economy in aggregate.
Professor Drezner reports that for every dollar spent on outsourcing to
India, the United States reaps between $1.12 and $1.14 in benefits.
Drezner also points out that large software companies such as Microsoft
and Oracle have increased outsourcing and used the savings for investment
and larger domestic payrolls.
Likewise, outsourcing can present advantages to non-Western states.
"Developing" countries, such as China or India, benefit from the patronage
of companies that outsource to them - in terms of increased wages, job
prestige, education and quality of life.
Excerpt from "Outsourcing." Wikipedia, The Free Encyclopedia.
28 Oct 2006, 02:11 UTC. Wikimedia Foundation, Inc. 28 Oct 2006
http://en.wikipedia.org/w/index.php?title=Outsourcing&oldid=84163144 India
India [...], officially the Republic
of India [..], is a country in South Asia. It is the
seventh-largest country by geographical area, the second most populous
country, and the most populous liberal democracy in the world. India
has a coastline of over seven thousand kilometres and borders Afghanistan
and Pakistan to the west; China, Nepal, and Bhutan to the north-east;
and Bangladesh and Myanmar to the east. India is in the vicinity of the
Indian Ocean nations of Sri Lanka, Maldives, Indonesia and Thailand.
...
Economy
The economy of India is the fourth largest in the world as measured by
purchasing power parity (PPP), with a GDP of US $3.63 trillion. When
measured in USD exchange-rate terms, it is the twelfth largest in the
world, with a GDP of $785.47 billion or Rs 35,34,615 crore in 2005, as
calculated by the World Bank. India is the second fastest growing
major economy in the world, with a GDP growth rate of 9.3%, and annual
Industrial production change of 12.4%, as of the first quarter of 2006.
Wealth distribution in India, a developing country, is fairly uneven,
with the top 10% of income groups earning 33% of all income.[20] India's
per capita income (PCI) of US$ 3,400 is ranked 122nd in the world. It
is calculated by the IMF that by 2007, the Indian economy will be ranked
3rd measured by PPP, See : List of countries by GDP estimates for 2007
(PPP)
For most of its democratic history, India adhered to a quasi-socialist
approach, with strict government control over private sector participation,
foreign trade, and foreign direct investment. Starting from 1991, India
has gradually opened up its markets through economic reforms by reducing
government controls on foreign trade and investment. Privatisation of
public-owned industries and some sectors to private and foreign players
has continued amid political debate.
India has a labour force of 496.4 million of which 60% is employed in
agriculture or agriculture-related industries which contributes to only
about 22% of the GDP, 17% in mainstream industry and 23% in service
industries. India's agricultural produce includes rice, wheat, oilseed,
cotton, jute, tea, sugarcane, potatoes. Major industries include textiles,
chemicals, food processing, steel, transportation equipment, cement,
mining, petroleum and machinery.
India's large English speaking middle-class has contributed to the
country's growth in Business Process Outsourcing (BPO). It is becoming
a major base for US tech companies for future targeted research &
development, including the likes of Google, IBM, and Microsoft. All
this has helped the services sector to increase its share of the economy
to approximately 50%.
India is also a major exporter of financial, research and technology
services. India's most important trading partners are the United States,
China, UK, Singapore, Hong Kong, the United Arab Emirates, Switzerland
and Belgium.
Excerpt from "India." Wikipedia, The Free Encyclopedia.
28 Oct 2006, 08:30 UTC. Wikimedia Foundation, Inc. 28 Oct 2006
http://en.wikipedia.org/w/index.php?title=India&oldid=84204346
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