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In the recent past, South-Eastern countries especially Vietnam, Thailand, Malaysia, Philippines etc have realized the importance of development of Information and communication industry for the development of the economy as a whole. Governments in these countries have started many initiatives to attract the companies interested in the development of software technology. Software technology parks have been set up and the export- import of material require for the development of IT have been exempted from any tax or duty. IT industry has been considered by the Governments as one of the most important driving forces for economic development and social enhancement.

It strengthens the country’s material, intellectual and spiritual growth and promotes the reform process and help in the modernization of economic sectors. The main thrust areas as per the government for the development of IT industry are

1. Infrastructure
2. Industry
3. IT application and
4. Human resource development

There are a number of favorable conditions available in the countries to achieve this vision. For instance, like India, these countries have “Young Population”. Especially in Vietnam, more than 33 percent people are under the age group of under14, while more than 40 percent in the age group between 15-40 years and almost similar is the case for other countries. Moreover, more than 90 percent of the population is literate and that is not a mean feat.

The government has also adopted many favorable policies for software industry in the areas of human development, telecommunication infrastructure, IT investment and IPR protection. A number of software firms have been set up and put into the operation by municipal and relevant government agencies offering tax holidays and other incentives to software and related services firms. The universities and school are more focused on imparting training on the software. There are initiatives to increase the proficiency of English language in the countries. Such initiatives, though, are able to generate the interest among people in the software industry, still it is not able to get the expected result and hence, a country likes India, which has established itself as the software country of the world, can help in the development of software industries in these countries and create a great opportunities for itself.

Opportunities for India :

I believe, the success of any industry rest upon the quality of human capital that one has. This is more important in the case when industry is in the latent stage. I remember, at the initial stage of software development in India, many companies like NIIT, APTECH and many more were mushrooming all across the nation to impart basic as well as advance computer courses. Apart from IITs and Regional Engineering colleges, many private engineering colleges were opened up and this led to the growth of technical education system in the country.

These countries have the similar advantage in terms of more than 90 percent of literacy but what they lack is the basic technical institute and center of excellence where they receive training and that is an advantage for the Indian technical education institute like NIIT, APTECH etc to tie up with the local educational institute or open their own centre and be a part of this great opportunity. In the same manner, India can play a vital role in the development of English language keeping into mind the English speaking ability of Indian.

Most of the software export from India goes to US and the European countries and it is minimal to the south eastern countries. With the development of economies in these countries, many big American as well as European companies are setting base in these regions and this is the time that we look towards east and gain a great share of software requirement. Setting up companies in these regions would not be a bad idea at this point of time. There is a huge market in the south-eastern countries and that need to be leverage.

Another problem is a lack of experienced project managers at all levels of the process from top management to junior project managers, resulting in very few S-E companies whose project management and quality control processes are certified according to international standards. Indian companies can provide a great help in the form of managerial capability and intellectuality exist here. They can offshore these services to the companies in South-East Asia and earn a great share of revenues. Companies considering outsourcing to Vietnam should look for partners with experienced management teams that have potentially even worked for larger corporations or on large scale projects in the US or Europe and that is an advantage for companies in India.

Vietnam has comparatively high cost of bandwidth, which is an essential element in communications for offshore software development. A 128k leased line currently costs $800 per month, down from $2,000 two years ago, and international phone calls are among the most costly in the world. These costs are falling thanks to the liberalization of the Telecom sector required by the BTA, but they still remain higher than communication costs in some other offshore software development zones. India has gain a reputation in the telecommunication industry world over and this can be a big advantage for the Indian companies to set up business there.

Indian small and medium scale software industry could also get an opportunity to increase their productivity and find new market by way of joint ventures or strategic alliances with the companies in these parts of the world as they will be more than happy to be associated with companies in India. Last but not the least, Indian IT companies need to be listed in the Hongkong or Singapore stock exchanges to enhance their brand equity in these parts of the world.

About the Author :

Deepak Verma is currently in Welingkar Institute of Management, Mumbai PGDBM (06-08).He has done mathematics honours from Ranchi University and thereafter, PGD-GMT from National Institute of Fashion Technology in the year 2003-04. He has more than three year experience in Garment and textile industry in operations as well as in the field of Marketing.

Views expressed here belong to the author and do not represent those of the ThinkingStreet or the author’s employer.

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