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India being one of the first ‘follower' nations has now become a world leader in providing IT services with the highest turnover of $61 billion in IT services sector. Many Reports suggested that India did not have the infrastructure to support IT related services but still it has made great success in this industry. Is the growth and development of the Indian IT industry similar to many other emerging economies and comparable to the East Asian Late Comer Model is a rather important question. We can use this model to identify if Indian IT industry has followed a similar pattern based on which its current and future strategies can be examined.

Theory

East Asian Late Comer Model

Since the 1980s, East Asian countries like Hong Kong, China, Taiwan, and Korea etc. experienced fast economic growth and remarkable industrial development. Such growth was a result of major economic policy measures like import substitution, export promotion, incentives for foreign and domestic investments. As a consequence, countries that emphasised on low cost labour gradually moved towards High Tech industries (Chang Woon Nam, 2006). In his paper, Chang Woon Nam has critically analysed Asian countries at different levels of industrialisation and identified certain pattern that the countries have followed. This pattern of economic and industrial growth is also known as the East Asian Late Comer Model.

According to the Model, there are different stages (or levels) of industrial development in a country. At the first stage, industry is based on natural resources and mostly labour driven (Chang Woon Nam, 2006). Countries offer their advantage of low cost labour to attract foreign business. At this stage they are involved in producing low-tech products and components as subcontractors for foreign firms. They gain knowledge and skills for production using shop floor experience and learning by doing (Bennett and Vaidya, 2005).

At the second stage, industry is based on capital and imported technology driven (Chang Woon Nam, 2006). Once the country gets sufficient shop floor experience they use imported technology and make capital investments to enhance their production capabilities. They are not just sub contractors now and have the ability to produce their own goods with a large amount of technology borrowed from developed countries (Bennett and Vaidya, 2005). There is little or no innovation at this stage, however firms invest in understanding the technology and start developing their capabilities at a smaller scale.

At the third stage, Firms are more R&D driven (Chang Woon Nam, 2006), and they invest considerably into research and development and are able to produce most of the products with little technology imported from developed nations. Firms at this level are able to design their product, performance features and process technology (Bennett and Vaidya, 2005).

At the fourth or the final stage, industry becomes innovation driven (Chang Woon Nam, 2006). Industry at this level is very innovative and has intensive R&D to support product development. Technology import from developed countries is negligible and firms are able to innovat本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。