A Comparison of the Industrialization Paths for Asian Services Outsourcing Industries, and Implications for Poverty Alleviation

This paper examines three software and/or information technology enabled services (ITES) industries - two in the early stages of development (in the People's Republic of China [PRC] and the Philippines) and one mature one (in India). Being latecomers to offshoring work, the PRC and the Philippines have developed this industry in cooperation with multinational enterprises (MNEs). PRC firms have worked with and upgraded within MNEs' value chains within the PRC market, while the Philippines has relied on MNEs to come in and set up facilities, with domestic firms setting up facilities where lower (knowledge) barriers to entry prevail. The paper also explores the ITES industries' implications for economic growth and poverty reduction. ITES industries can contribute to overall economic growth and exports, but due to their small size, will generally tend to have more observable impacts on the cities in which they are located. From the limited case data available, it appears that the ITES industries impact on overall employment and other economic sectors to varying degrees, relative to other sectors. As these industries do not help the more impoverished or less educated, they cannot be said to be a solution for the less employable or impoverished, let alone to the problem of rural poverty

The IT Industry and Economic Development in India: A Critical Study

Many scholars have questioned the role of the IT industry in India’s economic development. Some have correctly highlighted the limited impact of IT firms in creating occupations accessible to less-educated people or the modest impact of industry output on the livelihoods of people from poorer households and communities. There are thus strong arguments against governments giving fiscal and industrial priority to the IT industry. However, this article explains why the state is unlikely to heed this redistributive agenda. It argues that state assistance to the IT industry has been predicated upon four main factors: India’s surplus of skilled and technically qualified young workers, the dominant role of software services within the IT industry, the formation of political relations between industrialists and state institutions and, finally, the crucial role of software service export earnings in the stabilisation of India’s external position. Even the uncertainty generated by the global financial crisis has, thus far, been unable to dislodge software service exports from their central role in India’s economic policymaking framework. Short of a radical change in the status quo, we are unlikely to see a commensurate change in policy settings

The IT industry, employment and informality in India: Challenging the conventional narrative

The IT industry has been portrayed as instrumental to India’s transition to a high-growth economy. But critics argue that it has delivered few benefits to the wider population. In this context, industry advocates have drawn attention to the direct and indirect impact of IT on output and employment. This article critically explores these claims by locating them in the conventional (neoliberal) narrative of India’s recent economic development. It finds that industry claims are exaggerated and that IT industry demand is often linked to the creation of employment in industries dominated by informal employment arrangements. The prevalence of informal employment highlights problems of low pay and poor or hazardous working conditions. The IT industry’s rise to prominence has traversed a deeply ingrained process of labour market informalisation. In exaggerating the employment-generating capacity of the IT industry, its supporters have largely ignored problems relating to the quality of employment