Indian ITES industry - genesis - evolution - impact

Abstract

Before we look at the ITES sector, it is only appropriate that we look at the origin and growth of the IT industry in India. In a way, this would help us understand the context wherein the ITES sector took off and, as various studies show, which would exceed the revenues generated by the IT industry in the near future. THE BACKGROUND Managed services, time-sharing, integration and maintenance were the earliest software services to be outsourced. All these required proximity to the client. Later work, such as product development and custom software could, at least partly, be done remotely. Custom software did not become important till the late 1970s. In the early 1970s, American firms looked offshore for cheaper ways to develop software products. India, Ireland and Israel were obvious choices given the widespread knowledge of English and relatively low costs of programmers. The implantation of a technically sophisticated industry like software into a less developed host country has typically been explained by the access of transnational corporations to local resources facilitated by policy reform (often after efforts to create industry through protectionist policies have failed). Software might be considered a particularly difficult type of service to offshore, because the labor needs to be skilled, relative to what is required for the off-shoring of, say, routine call-center work or voice transcription. Moreover, software development is closely linked to customer requirements and requires close coordination within the firm. Even within software, one would expect that work to support product software would be the point of origination.