How Social Upgrading Drives Economic Upgrading by Indian IT Majors: The Case of Telecom IT Services

Capturing the Gains Working Paper 27

18 Pages Posted: 24 Mar 2013

See all articles by Sandip Sarkar

Sandip Sarkar

Institute for Human Development

Balwant Mehta

Institute for Human Development

Dev Nathan

Institute for Human Development

Date Written: March 21, 2013

Abstract

The paper deals with the dynamics of change in IT service provision in the telecom global production network (GPN). It deals with two main questions: why did the Indian IT majors not get the Managed Services contract to provide IT services for the major Indian telecom companies? And, how did the Indian IT majors respond to the shrinking margins in their traditional IT applications’ development and programming tasks? In answering these questions, the paper looks into revenue per employee and remuneration of IT professionals in India, which are not only higher than for those with similar qualifications in other industries but also have risen substantially in the past decade. The paper argues that the social upgrading of IT professionals, which resulted in shirking margins, forced the Indian IT majors to change their strategy and enter both end-to-end services and software products. The US IT service majors (IBM and Accenture) have adopted the Indian IT innovation of the Global Delivery Model (GDM), and moved to integrate low-end tasks in order to provide full Managed Services. As they move in opposite directions, the difference between the US and Indian IT majors is now narrowing.

Keywords: IT services, mobile software, managed services, trajectories of development

Suggested Citation

Sarkar, Sandip and Mehta, Balwant and Nathan, Dev, How Social Upgrading Drives Economic Upgrading by Indian IT Majors: The Case of Telecom IT Services (March 21, 2013). Capturing the Gains Working Paper 27, Available at SSRN: https://ssrn.com/abstract=2237520 or http://dx.doi.org/10.2139/ssrn.2237520

Sandip Sarkar

Institute for Human Development ( email )

NIDM Building, IIPA Campus
Indraprastha Estate
New Delhi, 110002
India

Balwant Mehta

Institute for Human Development ( email )

NIDM Building, IIPA Campus
Indraprastha Estate
New Delhi, 110002
India

Dev Nathan (Contact Author)

Institute for Human Development ( email )

NIDM Building, IIPA Campus
Indraprastha Estate
New Delhi, 110002
India

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
49
Abstract Views
551
PlumX Metrics