Major Challenges faced by Indian IT Industry in its Initial days

Several of the conditions for a competitive, innovative IT industry were in place located at Bangalore. Writing in the context of national competitive advantage, there was great importance of firm strategy, structure and rivalry. Software Companies stresses the role of competition among actors within industries and the importance of vibrant home markets. During the post-1984 period, there was competition for programmer and resources and for clients, as seen by the rapidly growing number of firms, the rising market share of new firms and overall growth.

Software vendors become technologically sophisticated through understanding and analysing customer preferences. In the Indian software industry, the conduits to sophisticated customer demand were the MNCs. Although their activities remained small because of high coordination costs, as discussed, learning took place. For instance, Indian domestic IT companies became adept at remotely managing turnkey software applications development projects, this is a skill introduced by TI.

However, there were few weak points as well. Domestic and local firms developing software were limited due to scarcity of venture capital and small domestic markets. MNCs developing software products and services that need cross-border coordination were hampered by the primitive telecommunications infrastructure and intrusive regulation. To that extent, the selective capabilities doesn’t exceeds beyond certain limit, especially for doing sophisticated work.

Many of the scholars have questioned and doubted the industry’s sustainability in the post-1984 period on these grounds. For example, D’Costa criticized the industry’s dependence on exports, arguing that international outsourcing of software, though commercially lucrative, and discouraged firms from doing more complex projects at home because "excessive dependence on outsourcing limits the synergy in between vibrant domestic and overseas markets".

There were few key points argued against survival:

• First, absence of a domestic market.
• Second, India lacks infrastructure and social networks.
• There was Inadequate supply of skilled professionals, which may well be the major constraint to the expansion of the software sector.
• Almost every firm had experience difficulties recruiting qualified staff, the problems are rooted in low capacity, faculty are not encouraged to consult.

The Data stats from Nasscom show that only 28.29% of the workforce has an undergraduate or graduate degree in computer sciences (CS) or electrical engineering (EE). This seems to stem from India’s unsystematic and poor education policy. The central government is the main financier and authority of tertiary education. While it has greatly expanded the university system, quality is poor and appears to have deterred enrollment.

According to a government report, "obsolescence of facilities and infrastructure are experienced in most of the institutions, the IT infrastructure and the use of IT in technical institutions is woefully inadequate, the barest minimum laboratory facilities are available in very few of the institutions and very little research activity is undertaken, engineering institutes have not succeeded in developing strong linkages with industry, the curriculum offered is out-dated and does not meet the requirements of the labour market"

Author have more than 15 years experience in software product