Investigating India’s Competitive Edge in the IT-ITeS Sector

Vol 27, No 1; by Sankalpa Bhattacharjee and Debkumar Chakrabarti; March 2015

India’s unprecedented success in a technology-intensive sector like IT-ITeS has attracted global attention. This attention led to development of models to trace out the factors contributing to the success. The models/frameworks attempted to club the factors under certain broad categories to frame a more generalized structure, capable of explaining the dynamics emerging from the interaction of the factors that ultimately resulted in competitive advantage of countries in software and allied sectors. The paper highlights the relative supremacy of the Porter’s diamond model in ascertaining technological prominence of the Indian IT-ITeS sector by carrying out a “complex” application of the model that is “instrumental” in its attitude. To this end, the study adopted a longitudinal perspective so as to chart the progression of the industry from its humble beginnings in the 1970s to emerge as the top outsourcing destination in present times in accordance with the dynamic element of the construct. The dynamism that we attempted to incorporate in our study necessitated a unique classification of the factors, instrumental in imparting the competitive edge under the realms of the diamond. This unique classification not only enabled us to unravel the attributes of the innovation-driven stage and thereby assert the existence of a fully functioning diamond, but also to ascertain the supremacy of the construct itself. In a nutshell, the study reconstructs Porter’s model in the context of the Indian IT-ITeS sector in a more systematic pattern based on a longer time horizon encapsulating newer sets of information. This may help managers and policy makers to have a better understanding of the industry dynamics. The study posits that the sector is likely to retain its technological prominence in the foreseeable future.