Catching‐up or Leapfrogging in the Indian IT Service Sector: Windows of Opportunity,Path‐creating,and Moving up the Value Chain

Indian IT service firms are successfully competing with world leaders and research on the industry is emerging. Providing analysis at firm rather than industry level, this article identifies the windows of opportunity open to Indian firms, with the following findings: (i) the catching‐up process by Indian IT firms can be classified as a three‐stage ‘body shopping–offshoring–global delivery model’, comparable with the three steps in original equipment, own‐design and own‐brand manufacturing; (ii) the window of opportunity for Indian firms was primarily the techno‐economic paradigm shift, and secondarily the government's regulation and support of the industry; and (iii) Indian firms initially partially re‐invented their own path by offshoring and created their own global delivery model, gradually moving to higher value‐added services.     

Strategic implications of the information age

conclusion The continued enhancements of information technologies facilitate and increase knowl-edge intensity in organizations. As such, knowledge and information technologies play critical roles in the development of competitive advantage by firms. For example, IT facilitates organizational learning and helps firms move into international markets by making it easier to coordinate geographically dispersed units and operations. Even entrepreneurial new venture firms are moving into international markets earlier in their life cycle (Oviatt and MacDougall, 1977; Zahra et al., 2000). IT has become especially important to smaller, entrepreneurial firms to facilitate their networking and coopera-tive ventures with other firms in order to compete more effectively with much larger firms for major projects. Furthermore, information technologies facilitate these firms’ technological learning, a critical element to their survival and long-term success (Zahra et al., 2000). IT has also helped firms from emerging markets (e.g., Korea, Mexico) compete more effectively against firms from developed markets that have more resources. Thus, IT has helped facilitate the increasing globalization of businesses.     

Work–Life ‘Balance’, Recession and the Gendered Limits to Learning and Innovation (Or,Why It Pays Employers To Care)

The everyday challenges faced by workers ‘struggling to juggle’ competing commitments of paid work, home and family remain stubbornly persistent and highly gendered. Reinforcing these problems, many employers regard work–life balance (WLB) provision as too costly. In response, this paper explores the learning and innovation advantages that can result from WLB provision in knowledge‐intensive firms, as part of a WLB ‘mutual gains’ research agenda. These synergies are explored through a case study of IT workers and firms in two high‐tech regional economies — Dublin, Ireland and Cambridge, UK — prior to (2006–8) and subsequent to (2010) the economic downturn. The results suggest that by making available the kinds of WLB arrangements identified by workers as offering meaningful reductions in gendered work–life conflicts, employers can also enhance the learning and innovation processes within and between firms, which are widely recognized as fundamental for firms' long‐term sustainable competitive advantage.     

Using HIT to deliver integrated care for the frail elderly in the UK: current barriers and future challenges

In this paper we briefly describe the results of a 3 year project examining the use of Health Information Technologies (e.g., electronic patient record systems) to deliver integrated care. In particular, we focus on one group of patient (the frail elderly) and efforts to design an e-health supported healthcare pathway (the frail elderly pathway--FEP). The aim of FEP is to bring together clinicians and staff from health and social care and allow them to share patient information. Our findings show that progress in delivering a fully-supported and working FEP has been slow, not least because of the difficulties experienced by healthcare staff in using current IT systems. In addition, there are many strategic and technical issues which remain unresolved (e.g., systems interoperability).     

How information technology affects wages: Evidence using internet usage as a proxy for IT skills

Many research studies have found a positive link between information technology (IT) in the work place and wages. Using data from the December, 1998 Current Population Survey, we examine the impact of IT, as proxied by on-the-job Internet usage, on wages. After controlling for selectivity bias, we estimate an average wage gain of 13.5 percent for on-the- job Internet usage. This wage advantage is consistent with estimates from studies based on data collected earlier in the 1990s examining the impact of computers in the workplace. We also tested for differences across industries in the manufacturing sector. We conclude that industries marked by less intensive use of technology offered significantly higher wage premiums than industries characterized by more intensive use of technology. This finding undermines the argument that higher wages go to those working in high-tech firms, not to those with high IT skills. We also find evidence that high-tech firms sort workers by skill level, which is also consistent with earlier studies.     

Management consultants: systems development, power and the translation of problems

This paper aims to shed light on the exercise of power during the development and implementation of organisational information systems. Considering the use of Information Technology (IT) to help solve organisational problems, we employ the concept of the ‘sociology of translation’ to theorise the process by which the organisational problem is constituted and for which the appropriate IT solution is proposed. Discussing the nature of the power relationship between external management consultants in IT and client or user organisations, the paper considers the role of symbolic resources such as managerial discourse, and the differential access to IT knowledge and skills, as important aspects of power in that relationship.     

Offshoring in the core: Russian software firms onshoring in the USA

Offshoring and outsourcing have become the buzzwords of the IT community and the popular media discourse about the current era of globalization in services. Acknowledging the geographic perspective expressed in these dominant terms, in this article I examine the processes and activities that are oriented in the opposite direction. Capturing this inversion, I develop the concept of ‘onshoring’ and use research material from fieldwork conducted with IT firms in St Petersburg, Russia and their affiliates, agents and clients in the USA to provide an empirical case study. Onshoring encompasses the corporeal, representational, material and legal practices of offshore firms developing a presence onshore, with Russia as offshore and the USA as onshore in this case. The lack of an established Russian professional diaspora in the USA created a context in which developing a recognizable onshore presence was necessary for firms based in Russia. By explicitly recognizing that the efforts, risk‐taking and experimental strategies of offshore firms to create connections, networks and contacts onshore in the USA are a constitutive part of offshore outsourcing, I document and examine the less acknowledged complex flows and practices of onshoring. I argue that although these actors and processes may seem marginal to the widely recognized narrative of offshore outsourcing, in fact, they are creative and strategic compensations that reveal how the globalization of services is enacted at the micro‐level.     

Evaluating ICT Implementations within the Romanian Business Environment

The impact of Internet services in the economic field is huge and has generated new forms of performing typical activities in the new e-way: e-commerce,e-banking, and so on. The paper focuses on the impact of these electronic facilities and, more generally, of ICT (information and communication technology) facilities, upon the activity of some Romanian firms, mainly small and medium enterprises. We sustain our statements by administering and analyzing a questionnaire which enabled us to perform a quantitative and qualitative study in the field we concentrated on. We can generally conclude that Internet services and IT facilities emerge as a new and dynamic way of being profitable on the Romanian market and of building up the “global e-economy”.     

Individuelle Qualifikation, berufliche Schlie?ung oder betriebliche Lohnpolitik – was steht hinter dem Anstieg der Lohnungleichheit?

This article examines the change of income inequality in the last few years. Two topics are in the center of the analysis: Which factors drive mainly the increase of income inequality ?C an increased demand for higher qualifications or processes of social closure? At which level does the change of income inequality take place ?C at the individual, the occupational or at the firm level? It turns out that economic theories like the thesis of the ??skill ?C biased technological change?? and sociological approaches as the theory of social closure both deliver important insights in the ongoing processes underlying the increase of income inequality. Beyond that it can be shown that firms play a major role in shaping these processes ?C a fact that has been widely neglected by both theoretical approaches.     

Understanding cultural singularities of ‘Indianness’ in an intercultural business setting

Analysing data from the Indian information technology (IT) industry, this paper advances an understanding of cultural singularities of ‘Indianness’. The research context of an intercultural meeting place of IT and business process outsourcing firms’ overseas subsidiaries, Belgium in this case, allows the authors to identify 10 cultural singularities that typify ‘Indianness’. This ethnographic, reflexive study is further validated by employing Ghoshal's ‘smell of the place’ metaphor through the authors collective experiences as consultants and researchers, and builds and extends upon the popular cultural dimension frameworks for understanding intercultural business and management. Existing cultural dimensions do not sufficiently describe the contemporary intercultural dynamics that typically take place in workplaces, especially so in offshore and outsourcing environments. A provisional set of parameters for understanding Indian culture, with its relevant impact on business life (customs and manners), business processes and business deliverables are proposed in this study.     

Technology Adoption in Small Family-Owned Businesses: Accessibility,Perceived Advantage,and Information Technology Literacy

The purpose of the study was to examine the antecedents and impacts of information technology (IT) adoption by small family-owned businesses, using data from the National Family Business Survey. This research tested a model based on the Diffusion of Innovations framework and the Technology Acceptance Model (TAM). Family business managers’ prior knowledge and level of IT use, business location, and community size/type were important antecedents to the decision to adopt IT. Ease of use and decision to adopt IT accounted for over 60% of the variance in usefulness of IT and implementation of internet and IT capabilities. The implementation of IT capabilities accounted for nearly 40% of the variance in actual use of IT and perceived impact of the internet.     

Piece rate pay

The theory of piece-rate pay suggests firms may be able to adjust their variable costs by altering work standards and the piece rate itself. Another argument holds that piece-rate systems can economize on the cost of monitoring worker output, that such systems are a substitute for management. Union positions on these points have supported the notion that piece-rate pay can be both a benefit and a cost to workers, depending on the cost of monitoring. However, competitive forces ultimately force all pay systems to reflect the opportunity costs of all factors of production.     

Effective tax rates and firm size in Ethiopia

The literature on Effective Tax Rates (ETRs) focuses on high‐ and middle‐income countries, but there is very little evidence on low‐income countries. This article addresses this gap with new evidence from Ethiopia. We investigate corporate ETRs in Ethiopia and whether the distributional effects they have in practice are in line with the corporate tax policy design. We calculate ETRs in line with the literature in this field, using profit tax at the numerator and gross profit at the denominator. We then analyse ETRs not only using panel data, focusing particularly on their relation to firm size, but also including other explanatory variables. Our main result is that, despite a proportional tax rate, small firms face a higher effective tax burden than larger firms, while middle‐sized firms face the lowest burden of all. We highlight that tax systems can have practical implications that differ largely from their policy design, due to compliance costs and imperfect enforcement. Measures to reduce compliance costs for small firms are particularly recommended.     

Policies to promote economic stability,asset building,and child development

This paper makes the case that the pattern low-income families walk into is a present time-oriented or consumption-based welfare system, with attendant incentives and disincentives; in contrast, the pattern higher-income families walk into is future-oriented or asset-based. These two divergent systems do not deliver equitable educational outcomes for children. To ensure that higher education can play an equalizing role in the U.S. economy, the nation needs a better welfare system for the poor, one that builds on the asset-accumulation structures that serve the needs of advantaged families. This new institutional approach would undo the current system of educational advantages for higher-income children over low-income children and, in turn, redress educational inequalities in America. In order to create a level playing field welfare policies are needed that enable low-income families to accumulate assets. In this paper we discuss policies that might help low-income families accumulate assets, including modifications to existing income supports, as well as the development of complementary asset-based institutions.     

Creating offshore-ready it professionals: A global perspective and strong collaborative skills are needed

Outsourcing of IT functions has become a widespread corporate practice, which has naturally led to concerns among IT works about how this affects their jobs. The issue is complex, and many companies are bringing their IT functions back inhouse. In light of this complexity, what skills do IT workers need to be com-petitive? We address this question first by reviewing the literature and then by examining two corporate case studies that have dealt with outsourcing issues. Based on this view of outsourcing, we discuss the skills that can provide a com-petitive advantage in the current environment.     

Information and communication technology adoption in micro and small firms: Can internet access improve labour productivity?

The rapid spread of information and communication technologies (ICT) may increase firms’ productivity with important consequences for job creation and for economic growth. This article contributes to this discussion by analysing the impact of internet adoption on labour productivity and the mechanisms shaping this relationship in Peruvian micro and small manufacturing firms over the period 2011–2013. The article estimates a reduced form where labour productivity is a function of internet adoption and other explanatory factors. Internet adoption is instrumented using a measure of the availability of financial opportunities for micro and small firms in Peru. Findings indicate that internet adoption: (a) increases firms’ labour productivity; (b) reallocates employment away from temporary administrative workers and non‐remunerated workers and expands employment of permanent production workers; (c) leads to the formalization of labour relationships, to the implementation of new organizational practices and to the improvement of training measures. While changes in employment and formalization of workers are linked to labour productivity gains, increases in training measures and organizational changes do not generate any additional productivity increase. Policies oriented to promote the adoption of ICT in micro and small firms can be beneficial to close the productivity gap with larger firms in Peru. Moreover, policies directed to the formalization of the workforce can provide an extra benefit, i.e. additional labour productivity gains in firms adopting the internet. Finally, policies oriented to the development of digital skills are also important to ease the re‐employment of those workers losing their jobs and the achievement of additional productivity gains that new organizational practices can provide.     

THE IMPACT OF UNIONIZATION ON MOTOR CARRIER COSTS

Union trucking firms have significantly different cost structures than non-union firms. Further, average costs for union firms are higher than for non-union firms even after controlling for higher unionized labor costs. The translog cost function approach used here incorporates a unique dummy variable technique to test not only for overall differences in union/non-union costs, but also to identify which individual cost function parameters differ between the two types of firms. Results suggest that unionized trucking firms are at a competitive disadvantage in the less regulated, post-1980 trucking industry.     

Induced inefficiency as a response to the union threat

Milkman and Mitchell (1995) extend Rosen’s (1969) threat-effect hypothesis to suggest that the threat of unionization can induce inefficient underutilization of labor by nonunion firms. If firms follow this strategy, the apparent paradox of competitive coexistence in the face of higher union wages reflects induced nonunion firm inefficiency rather than superior union firm efficiency. Furthermore, this strategy decreases demand for nonunion workers in a partially unionized industry. A generalized cost function analysis of data from sawmills in the Pacific Northwest yields evidence that nonunion firms use this strategy.     

ENTREPRENEURIAL ENTERPRISES, ENDOGENOUS OWNERSHIP, AND THE LIMITS TO FIRM SIZE

This paper develops a simple model of entrepreneurial enterprises. The analysis differs from traditional work on entrepreneurship by analyzing why entrepreneurial activities are typically conducted in small firms owned by the entrepreneur. I argue that ownership incentives are an advantage of small firms. When the probability of success of an economic activity becomes small, if becomes costly for large firms to commit to strong incentives, and small worker-owned firms emerge. The paper discusses application of the theory to innovation, wild-cat oil exploration, restaurants and retail trade, professional practices, salesmen, and franchising.     

MINIMUM WAGES,IMPORT STATUS,AND FIRMS' INNOVATION: THEORY AND EVIDENCE FROM CHINA

This study explores the heterogeneous effects of minimum wage on innovation of different types of firms. We develop an open‐economy R&D‐based growth model and obtain the following result: raising the minimum wage reduces innovation of firms that use domestic inputs but increases innovation of firms that import foreign inputs. We test this result using city‐level data on minimum wages and firm‐level patent data in China. In accordance with our theory, we find that raising the minimum wage is associated with more innovation by importing firms and less by non‐importing firms. This result survives a battery of robustness checks. (JEL E24, F43, O31)