The acronym BRIC stands for the four countries Brazil, Russia, India and China. These four countries have a population almost half of the world, 2.7 billion. In the 1990s, high growth rates were recorded in the software industries of these countries, in comparison to other sectors and international standards. For instance, whereas China and Brazil sell most of their software domestically, India exports a bigger proportion of its produce. This paper discusses the competitiveness of software industry under BRICS and the different characteristics under each country that have led to this state. Examples of software companies operating in these countries are IBM, Oracle, SAP and Symantec.
In order to reflect this state, the paper compares the software industry rise in BRICs with the rise of other industries such as electronics, tire and automobile of the United States. This is because, these United States industries was driven majorly by mobility of organization capabilities, unlike the software industries under BRICs where growth was spurred by timing and the industry’s nature. Therefore, oligopoly does not prevail in the industry allowing new entrance (Parthasarathy, 2007).
Factors of software industry growth in BRICs
The four countries have embraced globalization- they reduced barriers to international trade thus allowing their economies for capital flows and international trade. Furthermore, they took the initiative of developing the necessary inputs such as education, infrastructure, entrepreneurship, research and development. Not all the factors have been exclusively productive, for example, Chinese and Brazilian numerous small firms lack resources to harness international opportunities thus not gaining acceptance beyond the borders (Parthasarathy, 2007).
Mobility of human capital is another factor as it opens the economies to other economies of the world. Though brain drain hinders emerging economies growth, it also has desirable effects. Fro example, Indian software industry has benefited from reputational intermediaries, that is, the Indians in United States have facilitated business despite India having no fame as high quality software producer (Parthasarathy, 2007; McManus, 2011 ).
The third factor is multinational corporations (MNCs) role. Although they have narrow effects on spillovers of technology, they greatly influence informal networks and talent mobility. They act as training grounds to local entrepreneurs and managers who- some- eventually begin indigenous companies. This is advantageous because the more the bigger companies in an economy, the more strongly the economy and efficiency.
After discussion of the above factors, the following have been drawn up. There ought to be a thriving environment that will support emergency of both innovation and entrepreneur with lesser entry and exit obstacles. Second, candidness to multinational corporations and world markets is needed. This will enable investors enjoy competitive advantage in sourcing and reap benefits of training of local work force by the multinationals. In deterioration of initial advantages enjoyed, maintaining competitive advantage not always require rising up the value chain. This is evidenced by the India’s case. When higher wages eroded low wages previously enjoyed, it adopted broad quality certifications and diversified its software into various domains (Oliveira &Fernando, 2010). It helped it dodge direct completion with multinational corporations. Furthermore, knowledge in service provision processes and policy support is crucial. Sound policies will shelter small enterprises from unfair competition from already established companies while service provision knowledge enable the firm operate globally with easy.
The attractive investment factors under the BRICs are openness to the international market, strong government support, strength in market growth and a vas high quality pool of talent. They will all influence prioritization when undertaking global business expansion (strategy).
McManus, J. (2011). China’s Emerging Software Industry. International Journal of Emerging Markets, 6 (3), 276-283.
Oliveira, S.B., Fernando, C.M. (2010). A Comparative Analysis of CMMI Software Project Management by Brazilian, Indian and Chinese Companies. Software Quality Journal, 2 (18), 177-194.
Parthasarathy, B. (2007). From Underdogs to Tigers: The Rise and Growth of the Software Industry in Brazil, China, India, Ireland, and Israel. Economic Geography, 83(3), 331- 332.
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