4 - China versus India – a SWOT perspective

Abstract

This chapter performs the Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis on the software industries of India and China, and compares and contrasts them in relation to each other, as well as North America and Europe. In contrast with India's software industry development, China's software industry has been domestically focused since the beginning. Recently, the industry started looking seriously into India's success in software exports. The emergence of other software nations on the global software industry landscape has meant growing competition to the software and IT services industry in India. However, as the SWOT analysis suggests, the combination of strengths and opportunities that the Indian software industry has far outweighs any negative impact that might arise in the event of its weaknesses and threats becoming real. While the Indian software industry is not yet connected to the software product market opportunities, it certainly has a strong upper hand when compared to the Chinese software industry, which suffers from high fragmentation and a weak institutional framework, as well as a lack of credibility. After almost two decades of development, China's software industry has shown its strength in high market growth and the government's strong support. However, how to overcome the weaknesses in managerial and technical skills and gain a significant market share in the ever-enlarging world software market remains a daunting task.