Notwithstanding India’s emergence as an IT superpower, a global study has ranked India tenth in Asia-Pacific and 46th worldwide in terms of IT industry competitiveness. In the study commissioned by software industry association Business Software Alliance (BSA) and conducted by the Economist Intelligence Unit, the US, Japan, South Korea and the UK ranked the highest among 64 countries in terms of IT industry competitiveness. The study evaluated countries on factors like supply of skills, a pro-innovation culture, world-class technology infrastructure , a robust legal infrastructure, government support and a competition-friendly business environment. China was number 49 globally and 12th in Asia-Pacific. Japan, South Korea, Australia, Taiwan and Singapore were the top five countries in Asia-Pacific.

“India and China have been able to parlay unique factors, such as workforce size, low wages and language attributes, into strong IT sector performance, compensating for glaring weaknesses in the industry environment,” the study noted. However, the two countries will have to innovate more in terms of products and services to remain competitive, as their cost advantage erodes over a period of time. “Developing a stronger legal and R&D environment, complemented with appropriate support for the IT industry and a better IT infrastructure, will help make Indian firms more competitive in this sector in the years to come,” said BSA India committee chairperson Sanjay Gupta. The study said India and China will see greater competition from Russia, Brazil, Malaysia and Vietnam and even smaller markets like Estonia, Lithuania and Chile in future.

Of the world’s top 22 countries according to IT labour productivity, all but four figure in the top 22 of the IT industry competitiveness index. “The four exceptions-China , India, Brazil and Greece-are all in the bottom half of the index, suggesting they are able to leverage other factors to achieve relatively high levels of sector output and productivity,” it noted. Citing the legal regime as an important differentiator, the study said countries must balance open competition with robust protection for intellectual property rights. “While the US and western Europe stand heads above the rest in the degree of protection afforded , only Australia in the Asia-Pacific registers relatively high scores in IP protection, enforcement and online legislation ,” it said.