Case Study Chapter 1 1. Why has India been able to build a thriving software industry? What are the country’s advantages in this market? What are the country’s disadvantages?

Answer: India has been able to build a thriving software industry due to its good educational system which has enabled India to produce a large number of well and highly qualified software engineers. India’s low labor cost has also contributed to the growth of the software industry by increasing the demand for software experts by foreign firms. E.g. USA and European firms import Indian software experts due to the low wages (labor cost). The country’s advantages in the market include the economic reforms which has made industry a powerful force for modernizing Indian’s economy, the industry has also improved India’s economy inform of increased GDP through foreign direct investments, However, India's lack of infrastructure and low standard of living make it difficult for programmers to remain working in India and the economic policies have failed to fully utilize the increasing talent from the University graduates which has led to increased brain drain or influx of It experts into America and the European countries, this high influx may affect India’s economy negatively in the long run, another disadvantage is the India’s overburdened telecommunication infrastructure and electrical grid which has made most industries look for alternative sources of energy, the software industry high depends/cannot function in the absence of these energies and the use of generators which use petrol has a high budget implication on firms. 2. What the likely impact on the Indian economy if its software industry continues to grow? Answer: The success of the Indian software industry has had wide-ranging effects across the Indian economy. Policy changes to enhance exports are facilitating rapid development of a domestic IT market, offering efficiency gains through adoption of information technologies. In sharp contrast to even a decade ago, Indian business, government, and consumers have ready access to the newest software products and imported hardware. The very high standards of management practiced in Indian IT firms and the tremendous employment opportunities offered by the industry have had significant effects on the confidence aspirations and work ethic of young professionals in India. The leading software firms have pioneered a movement to modernize Indian management practices, adopting practices of creative organizations with less hierarchical structures and strong work ethics. In order to comply with international norms to participate in international capital markets, IT firms have set new standards in accounting and corporate governance. They have offered unprecedented high-paying employment opportunities for the young and educate labor force, particularly for women professionals. 3. Given the predicted shortage of qualified workers, what can India do to ensure that its software and BPO industries remain competitive? Answer: More troublesome are looming shortages of qualified workers. In that situation outsourcing is most important to ensure that its software and BPO industries remain competitive. The Indians software industry has thrived because of its labor cost advantage: when the Indian tech boom commenced, U.S. programmers were paid about three times as much as those India. However, salaries of Indian programmers are rising as much as 15 percent a year because of heightened demand for their talents, so India’s labor cost advantage has been eroding. A recent Mckinsey & Company study suggests that the software and BPO industries could suffer labor shortages of a much as 500,000 workers as soon as 2010, if current growth rates continue. If so, the boom may end in Bangalore, and firms may shift their software development BPO activities to other countries. Indeed, Infosys, Wipro, and Tata Consultancy Services have begun to outsource low-level software maintenance and development work to China, where programmers are cheaper. And other countries where English is widely spoken, such as the Philippines, also pose new threats to India’s dominance. For Example, Siemens Has shifted 1,500 customer service jobs from India to the Philippines to take advantage of lower wages and lower turnover rates that is called outsourcing. Case Study Chapter 2 1. What challenges do graying populations create for companies? Answer: Since there are more people retiring, there will be fewer working people in the labor market. Companies will find it hard to source for workers in a labor market that comprises of the elderly. Since elderly people are regarded as less productive, the quality of the work force will be reduced. Companies that hire a graying population will have its production output slowed down by this demography thus making the company less competitive. Pension companies will be burdened while trying to pay for pension funds for this huge demography. Since there will be a change in taste and preference, spending habits as well as lifestyle, spending on some products will decrease as more people enter this age bracket. For example; * A change in taste and preference in the case whereby the aging want to eat much healthier foods will have an effect on the food industry. * A change in lifestyle will have some products such as sugary and high fat foods reduced thus affecting the companies which produce them. * A change in spending habits will see the demand for some products abandoned since individuals in this demography will want to save more because they will be no longer working.
2. What opportunities do graying populations create for firms?
Answer: There will be a demand for Private Nursing homes and hospitals.
There will be demand for Cancer treating drugs as well as life prolonging drugs for Pharmaceutical companies.
There will be a higher demand for products such as healthier foods as well as high demand for products offered by recreational facilities.
3. How will demographic changes affect the competitiveness of countries in the international marketplace? Answer: Since elderly people are regarded as less productive, the quality of the Chinese work force will be reduced. Since the economy will have more aging people, the country’s output as well as competitiveness will be reduced as compared to economies with a much younger population. The increasing aging population might cause investment capital to flow from a country whose population in comparatively older to the one whose population is comparatively younger and consequently whose rewarding rate of the capital will be high.