Porters Diamond in India
Executive Summary
What are the secrets of India’s success in information technology? By using Porter’s Diamond Model, this article tries to answer that question. Based on the analysis, it seems the only determinant in the Porter’s Diamond that creates India’s success is Factor Condition (i.e. the Indian intellectual capital and “Indian connection” in Silicon Valley). The supporting determinant outside the diamond is the outsourcing trend in current global competition, which can be considered as the Chance in the Porter’s Model. This could be mean one of these possibilities: either Indian success will not be sustainable or Porter’s model needs revision.
Talking about Porter’s model revision, it is necessary to consider Landes’ perspective on that model. Landes shows that historical and socio-cultural can be a big factor that makes a nation more competitive than others. In India’s example, its ancient civilization has provided foundation of knowledge in society that creates the Indian intellectual capital plus its ‘advantage’ being familiar with English language after occupied by British Empire for hundred years.
India now has become synonymous with Information Technology (IT). Its software developers and IT products/services are only the second after the United States. In fact, more and more IT jobs are outsourced from the United States to India that makes IT job markets in the United States are suffered. What are the secrets that make India can emerge as a leading IT country among other countries especially in Asia? Using the Porter’s Diamond Model, the answer of that question will be discussed in this paper. We will see whether Porter’s Diamond Model can explain the primary causes of India’s competitive advantages in the information technology sector.
Porter’s Diamond Model explains that there are four determinants of national competitive advantage. Those components are: Factor Conditions, Demand Conditions, Related/Supporting Industries, and Firm/Industry
What are the secrets of India’s success in information technology? By using Porter’s Diamond Model, this article tries to answer that question. Based on the analysis, it seems the only determinant in the Porter’s Diamond that creates India’s success is Factor Condition (i.e. the Indian intellectual capital and “Indian connection” in Silicon Valley). The supporting determinant outside the diamond is the outsourcing trend in current global competition, which can be considered as the Chance in the Porter’s Model. This could be mean one of these possibilities: either Indian success will not be sustainable or Porter’s model needs revision.
Talking about Porter’s model revision, it is necessary to consider Landes’ perspective on that model. Landes shows that historical and socio-cultural can be a big factor that makes a nation more competitive than others. In India’s example, its ancient civilization has provided foundation of knowledge in society that creates the Indian intellectual capital plus its ‘advantage’ being familiar with English language after occupied by British Empire for hundred years.
India now has become synonymous with Information Technology (IT). Its software developers and IT products/services are only the second after the United States. In fact, more and more IT jobs are outsourced from the United States to India that makes IT job markets in the United States are suffered. What are the secrets that make India can emerge as a leading IT country among other countries especially in Asia? Using the Porter’s Diamond Model, the answer of that question will be discussed in this paper. We will see whether Porter’s Diamond Model can explain the primary causes of India’s competitive advantages in the information technology sector.
Porter’s Diamond Model explains that there are four determinants of national competitive advantage. Those components are: Factor Conditions, Demand Conditions, Related/Supporting Industries, and Firm/Industry