Software Industry Lacks Focus In Key Areas, Says Exim Study

The study also expressed concern over the migration of skilled professionals to the overseas market. For the improvement of computer software sector Exim Bank recommended the development of specialisation and focus on core competencies. The need to establish a marketing network through international tie-ups has also been highlighted in the study.

The global software industry has been growing at an annual rate of about 13 per cent over the past five years. The turnover of global software industry, which is dominated by professional services, products and packages, is expected to grow from $285 billion in 1995 to around $530 billion by 2000. Though India has a negligible presence in products and packages it is considered to be a significant player in the professional service sector.

 

According to the Exim Bank report, the revenue from software exports from the country is estimated to touch Rs 10,000 crore by the year 2000, from Rs 2,500 crore in 1995-96.

The information technology (IT) sector in the country has been growing at an annual rate of more than 30 per cent over the last five years, the report said.

According to the study, a new trend which has emerged over the past few years in the it sector is growing importance of the software industry vis-a-vis the hardware industry.

This is because of the growth in the micro-processor technology and availability of cheaper hardware, besides the shift from proprietary systems to open systems leading to investments being directed towards software solutions.

The country is at present facing competition in software exports mainly from Ireland, Israel, Singapore and the Philippines. However, these countries have some plus points in respect to the domestic industry like better manpower and good marketing strategy.

The domestic software sector consists of 425 companies employing more than 35,000 professionals. This sector has been growing at an annual rate of 48 per cent over the past four years, the study said.

In the domestic sector, turnkey projects, products and packages account

for more than 75 per cent of the total revenue. The revenue of the software sector has increased from Rs 3 crore in 1984-85 to Rs 2,600 crore in 1994-95.

The software exports sector is growing at an annual rate of 57 per cent

over the past four years. The high growth in the software exports sector is mainly because of increasing number of business process re-engineering jobs to international firms and sub-contracting of maintenance and enhancement of their systems to their Indian subsidiaries.

The main markets for the country's software solutions include the US and Europe, which together account for about 78 per cent of the total

exports. The other emerging markets are South-East Asia, West Asia,

Australia and Japan.

However, despite weaknesses, the software export industry has some

inherent strengths. According to the study they are availability of a large pool of low-cost skilled-manpower, international recognition of the availability of wide range of skills and expertise in latest technologies, liberalised economy and quality orientation of software exporting companies.