Running head: INDIA and THE UNITED STATES OF AMERICA Opportunities of

Complexity

INDIA and THE UNITED STATES OF AMERICA

Opportunities of Complexity
The Global Information Technology Services Industry
By
Herbert Kang

INDIA and THE UNITED STATES OF AMERICA Opportunities of Complexity

Abstract
The purpose of this study is to analyze the information technology services market and
how it manifests itself within a globally dominant economy compared to a globally inferior
economy. In addition, this study aims to use factual data of these economies to suggest rationale
that will foster stability and/or continued global economic growth.
As a point of reference, this paper investigates the information technology services
markets of the United States of America and India. The transformation in public perception of
India in the United States has been welcomed by many scholars who for years had been
compelled to argue what precisely Indias relevance was to American, and global, interests
(Ganguly, 2006).
The data used in this paper was collected through online resources made available
through the University of Texas at Dallas Library. It is a given fact the United States today finds
itself in the fortuitous position of enjoying good relations with India (Tellis, 2008). More than
just a fact filled essay, this study presents facts and then creates the future dilemma required to
maintain economic growth efficiently.
This study presents findings from cultural perspective to industry market data trends.
The United States as a global leader, the leadership of which sees it as a target; India as a fastdeveloping nation with a high level of interest in improving technology generally and
communications in particular (Huffman, 2006). The findings are important, but it is the logical
expression of forward rationale that needs to be harnessed by progressive students of
international economy.

INDIA and THE UNITED STATES OF AMERICA Opportunities of Complexity

Literature Review
This topic is important because it displays a scenario of a dominant power and a weak
budding force. As pertained to international economics, the following study reveals many
avenues for analysis, improvement and education. This research shows the difference and some
similarity between India and The United States of America in their business culture, healthcare
system, information technology services Industry and customer service.
Indian Culture
The culture of India is in reality, many different cultures that have distinct differences in
language and religion. It is a fact that India is one of the most religiously diverse nations in the
world. Religions are comprised of Hinduism, Buddhism, Islam, Jainism and Sikhism. Although
religions vary in India, there is one commonality across the entire nation, social hierarchy
(Schaffer, 2009).
In recent years, social hierarchy has somewhat disappeared although it is the backbone
by which the country was ruled prior to British colonization. In the past, the highest-ranking
people were referred to as Zamindars. Zamindars were basically landowners and the rulers of
India. Although aristocracy was rampant in Indias past, it has now somewhat faded away. Even
though the strict social lines are not drawn as boldly as before, it is still entrenched deeply in the
minds eye of Indian society. Some of the key traditions of Indian society can still be seen today
in the arena of arranged marriage.
Also, many Indians wear a red dot on the forehead. In southern India, some girls
would wear a Bindi, which represents a prerogative of a married woman. It is also shows a
guarantee in the social status of the women and holiness of the institution of marriage. India has

INDIA and THE UNITED STATES OF AMERICA Opportunities of Complexity

a very low divorce rate as a result of strict marriage beliefs that are largely family oriented
arrangements. Arranged marriage are a tradition in Indian society, this has been done for
centuries. Even todays society in India, the majority will have their marriages scheduled out by
the parents and other respected family-members. A bride's family provides a present to the bride
& groom. Traditionally, the gift was considered the wifes share of the family fortune, since a
daughter had no rightful claim on her birth family's real estate.
Next, food is a very diverse part of the Indian culture. Indian foods are deeply
influenced by religious, cultural choices and customs. Many Indians use chicken, curries and rice
in their dishes. There are so many varieties and cooking techniques for Indian cuisine that can be
traced to the varied human culture housed within Indias borders. Indias culture in clothing
consists of a colorful silk sari, which is worn by many women. For men, they would wear what is
called a kurta, which is a loose shirt that is worn about knee-length. On special circumstances,
men wear what is called a sherwani, which is a lengthy coat that is buttoned up to the collar and
down to the knees.
Unlike America, Indias culture in sports is Cricket. This is considered the most popular
sport in India. At one time Field Hockey was Indias official national sport. However, in todays
society field hockey no longer has the following like before.
Indian Business Culture
With regard to doing business in India, it is a culture of its own. The fact that different
states of India recognize different official languages makes for an interesting communication
barrier. However, it is generally accepted by Indians that English is the language of world
commerce. Next, the historical caste system places value on people in Indian business. The caste

INDIA and THE UNITED STATES OF AMERICA Opportunities of Complexity

system is largely responsible for a framework of economy that specifically defines roles and
status in the Indian business community. This manifests itself into simple values shared in Indian
Culture. For example, laborers will do laborious tasks and no Indian office personnel would dare
do a manually laborious task. Physical labor is reserved for people of lower class. India operates
business with these paradigms in mind.
Though there are differences within the region between pre-colonial religions and
between different forms of indigenous and colonial rule, the colonial states generally reduced the
scope of these individuals as part of their regulation of individual statuses and their imposition of
the European religious tradition on many areas of activity (Orlove, 2006). Placing your hands
together with a slight bow shows appreciation and shows respect for Indian customs. Males will
shake each others hands with men once meeting or leaving, but the men will not touch women
upon greeting each other. Western women can offer their hand to an Indian man who has been
westernized, but not normally to others. Traditional Indian women may shake hands with foreign
women but not usually with men (India - Cultural Etiquette 2014).
In the corporate world Business cards are exchanged and Indians are very conscious of
the protocol. Always present business cards when introduced. English is appropriate for business
cards. Business is slow and difficult in India. Be polite, but persistent. Do not get angry if you
are told something "can't be done." Instead, restate your request firmly but with a smile. Plan on
several visits before you reach an agreement. You may be offered a sugary, milky tea, coffee or a
soft drink. Dont refuse. Note that your glass or cup may be refilled as soon as it is emptied
(India - Cultural Etiquette 2014). Sometimes Indian colleagues may not show up for a meetings
so Be ready to rearrange the meeting. It is crazy to think that these types of values still exist in a

INDIA and THE UNITED STATES OF AMERICA Opportunities of Complexity

country that is becoming more economically competent. Overall, Indian culture has deep roots
that can still be traced through todays Indian business environment.
The United States of America Culture
The culture of The United States of America is born of European influence. However,
todays United States is more of a melting pot of different cultures due to migration from all parts
of the world. The United States takes on conservative elements in that there is no direct caste
system. Just about every region in the world will have some type of culture influenced, as it is a
country of immigrants. Americas cultures have also been shaped by the cultures such as the
Native Americans, Latin Americans, Africans and Asians. The United States is the most
culturally diverse country in the world and has a population of more than 315 million people.
The United States has many different religions, languages and traditions. The variety of
culture present in the United States however conforms to the moral elements of free expression
whereby people are not treated differently because of their unique beliefs or background.
Although there is no direct social hierarchical philosophy, social classes can be seen due to
various demographics. The United States treats all citizens as equals although the population
shares different lifestyles and hardships.
Americancultureinsport has always been Football, Baseball and Basketball. Americans
are real big in supporting the military on holidays such as Memorial Day and Veterans Day we
honor those who have service and died in military, while serving their country.

The United States of America Business Culture

INDIA and THE UNITED STATES OF AMERICA Opportunities of Complexity

The business culture of the United States is all about empowerment and control. If one
wants a better life for themselves or their family, there are many opportunities for change within
one's social demographic. The United States Business culture strives for fairness and opportunity.
The culture of United States business revolves around the belief that all can prosper and succeed
through hard work (Perkovich, 1996).
Next, the United States experiences economic difficulties like any other nation.
However, its citizens enjoy a standard of living that is paramount to the majority of the world.
Also, the United States has the largest global economy in the world. American greetings are
generally quite informal. This is not intended to show lack of respect, but rather a manifestation
of the American belief that everyone is equal. Although it is expected in business situations,
some Americans do not shake hands at social events.
Titles are also not often used in the United States business culture. People are almost
always on a first name basis whereas in some other cultures this could be seen as a sign of
disrespect to colleagues. Instead, they may greet you with a casual "Hello" or "How are you?" or
even just "Hi." In larger groups, many may not Use professional titles when you are introducing
people to each other. Eye contact is important when shaking someones hand (United States Cultural Etiquette 2014). Overall, the United States business culture has a straightforward
mentality of hard work, perseverance and opportunity for all who seek success.

Health Care in India

INDIA and THE UNITED STATES OF AMERICA Opportunities of Complexity

Indias health care is ranked 112th in the world. Their market size healthcare sector is
growing at a 15 per cent compound annual growth rate (CAGR) and grew from US$ 45 billion in
2008 to US$ 78.6 billion in 2012 and is expected to touch US$ 158.2 billion by 2017, according
to a report by Equentis Capital (India Brand Equity Foundation 2014). Their per capita
healthcare spending has increased to 10.3 percent from Compared to the United States $43.1
million in 2008 and in 2011 at $57.9, but buy year 2015 it is estimated to go up to $88.7. The
reason behind this is because of the rising incomes, improved access to high-quality healthcare
facilities and larger awareness of personal health and hygiene.
The private sector has emerged as a vibrant force in India's healthcare industry, lending it
both national and international repute. The private sector's share in healthcare delivery is
expected to increase from 66 per cent in 2005 to 81 percent by 2015. Its share in hospitals and
hospital beds is estimated at 74 per cent and 40 per cent, respectively (India Brand Equity
Foundation 2014).
According to data released by the Department of Industrial Policy and Promotion (DIPP),
hospital and diagnostic centers attracted foreign direct investment (FDI) worth Rs 12,413.57
crore (US$ 2.02 billion) between April 2000 and July 2014 (India Brand Equity Foundation
2014). Certain major investments in the Indian healthcare industry is called Life Cell, which is
India's biggest umbilical cord blood stem cell bank, to set a public stem cell bank will cost 30
crore, which would be 4.9 million in American money. In figure 1which is below represents how
much India Health spending as percent of GDP from 1995 to 2012.

Figure 1:

INDIA and THE UNITED STATES OF AMERICA Opportunities of Complexity

Source: The table above is extracted from the work of the globaleconomy

Indias Health spending as percent of GDP compare to other countries such as United
States, Canada, UK, Germany and Australia. This shows that India GDP is lower than all the
countries they were compared to.
Health Care in United States
Americas health care is ranked 38th in the world. Majority of Health care facilities in
America are largely owned and operated by private sector businesses. 6065% of healthcare
provision and spending comes from programs such as Medicare, Medicaid, Tricare, Veteran
Health Administration Medicare. People who are under 65 are insured by their or a family
member's employer, while other chose to buy health insurance on their own.The United States
Health Care system has and will always have problems. The trouble comes from free-market
principles. It is pierced with tax control, pricey insurance orders and administrative interference.
On June 28, 2012, Obama Care had come into effect. The goal is to give Americans who
could not afford healthcare, by allowing them access, excellence and inexpensive health
insurance and to reduce the growth in health care spending in the U.S. America has spend
trillions of dollars on healthcare. America spends more in healthcare than other countries.
According to figure 2, it shows America spending twice as much.

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10

Figure 2:

Source: The table above is extracted from the work of pgpf.org

The Basic Industry of Customer Service

The customer service industry is comprised of companies that earn the majority of their
revenue by performing services and providing intangible products. The value adding action a
customer service company provides is based on consulting and leading people towards their goal.
Customer service is the product and successful results are the goal of profit creators in the
customer service industry. In order for any business to perform at the highest level, they must
place emphasis on customer service. However, the customer service industry is based on
profitably providing customer service communication and lead in a variety of markets
(Prabhakar, 2007). One such market is the information technology industry.
Information Technology Services Industry
The information technology industry is based software support services, computer system
design and data processing management. With advancement in technology comes increased

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demand for information technology services. The amount of demand for information technology
customer services is directly related to the dynamic changes in technology. It is important to
understand that demand for information technology services must be economically succinct. In
other words, it must be profitable to spend money for the information technology services. When
the economy justifies spending on information technology services, the success of information
technology companies is largely hinged on their technical knowledge, pioneered approach and
viability of marketing strategy. As in any industry, there is a market for a wide range of service
styles. The ability of companies within the industry to understand and execute their best option
for profitability is paramount.
Information Technology Industry in India
The Indian Economy has gained traction in recent years. The information Technology
Industry is a foundation of Indias newfound economic growth. The information technology
industry has given India a firm stepping-stone on the global economic platform. Further, this
industry has motivated Indias education system to produce high quality minds of the future. To
date, the information technology industry has employed over 9 million people and is a driving
force of Indian social transformation (Khalid, 2011). Domestically, Indian companies in many
industries depend on information technology services to improve the process flow of their
organizations.
Indian manufacturing companies are spending money on information technology services
and are further stabilizing their economy as a result. Companies in India are placing strategic
value on information technology services to help them grow and survive the current economic
conditions. Information technology is literally placed on a pedestal in India. It is cost effective to

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12

outsource these needs to service companies in a modular oriented business environment

(Frierson, 2008).
India is thriving on this evolution of business belief. Not only is there are stable
information technology services industry in India, companies using the information technology
services are moving up the ladder towards providing more value to their customer base as a
result. The growth in the Indian IT industry is expected to be around 30 per cent and the overall
sales are projected to touch US$ 17 billion in FY 15, according to Manufacturers' Association of
Information Technology (MAIT).
Indias IT industry, a bustling zone of software and services markets, may slow to a
standstill if the country does not resolve challenges brought about by an appreciating currency,
severe worker shortage, looming taxes, and visa restrictions. ZDNet Asia reports that Indias
annual budget introduced a fresh set of deterrents in the form of taxes that added to the countrys
existing list of woes, including rising costs, lack of skilled workers, and H1-B visa restrictions
limiting the number of foreign IT professionals U.S. firms can hire. Moreover, most Indian IT
companies are in recruitment overdrive. For example, TCS plans to hire 32,000 employees this
year, Infosys some 24,500, and Wipro about 14,000. In addition, some 300 North American and
European companies have set up their own offshore centers in India since 2005 to lower
development costsall looking to tap the same talent pool. While 75% of the countrys
population is below the age of 25, there is growing scarcity of skilled workers and a resulting
huge increase in salaries (Indias Challenge, 2007). The market for information technology
services is currently estimated to be around $8 billion. Moreover, Indian insurance companies are
planning to spend nearly $2 billion on information technology 2014 (Samson, 2011). Lastly, the

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presiding governmental powers of India have vowed to foster the growth of domestic
information technology capability.
This promising approach will undoubtedly enable sophistication within governmental
services while creating jobs. The globalization of the Indian information technology industry has
been the key driver of growth for Indian information technology markets. There are many
vertical markets that India is and will be associated with in the near future (Mohan, 2009).
Somehow, India has managed to gain a foothold in the global based information technology
market.
Information Technology Services Industry in The United States of America
The United States information technology services market has been on a steady incline as
well as the Indians. The industry has increased its revenue by an average of six percent between
2010 and 2011, totaling $606 billion in 2011 (Huffman, 2011). Overall, research and
development spending in the United States information and communications technology (ICT)
sectors increased by 6.3 percent to $126.3 billion in 2011. The United States accounts for more
than 55 percent of global ICT research and development (Huffman, 2011). There is much hoopla
surrounding developing countries and their recent success within the information technology
industry. It should be noted; the United States has the most advanced software and information
technology services industry in the world. Statistically, there are over 100,000 information
technology service companies in the United States. These are all small to medium sized firms.
The United States has a highly skilled and educated workforce and therefore is able to
support a wide base of niche information technology services companies that are extremely
customer oriented. U.S. software firms operate in a mature, harmonized market and have a

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reputation for producing reliable and effective solutions that accelerate quickly to the
marketplace. International companies in the industry have shown a keen interest in the U.S.
market because of its strong intellectual property rights laws and enforcement (Huffman, 2011).
Moreover, it is estimated that the United States demand for software will continue to
increase at a rate similar to growing demand for information technology services. The
technology industry is clearly the industry of the future and the United States is the ultimate
grounds for competition.
Conclusions and Future Research
Given the abundance of information available pertaining to information technology
markets, there are many future studies that should be conducted. Although there are
demonstrated growth patterns in the global demand for information technology services,
economies will eventually sequester this industry to its proper home. In analysis, we must
understand the trajectory of growing markets and how they will shape individual economies. We
also must understand what can be done by weaker economies to insure a maintained and or
growing share of the world market. Lastly, we must understand the complexity of the industry
and seek an end solution to minimize human effort and maximize efficiency.
In understanding the growth tangent of any industry market, we must look at progression
and loss of workforce utility. Simply put, as technology advances, the work necessary to
complete tasks becomes more efficient. What are the fallouts of the advancement of the
information technology service industry? We must understand who will lose, when they will lose
and how they will lose. Anticipating fall out is the key to education and continuing improvement
as a nation of advanced economy.

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When comparing the Indian information technology services industry to the United States
information technology services industry there is one thing that stands out. The dominant
characteristic of this competition revolves around the value of the information technology
industry to India. The United States is the most dominant global market economy and has many
markets for which it produces (Burns, 2007). If India were to lose a significant share of the
global information technology services market, it would cripple their concentrated economy. In
order to advance under developed nations, we must study the history of heavily concentrated
global industry growth in disadvantaged nations. Are there drastic measures India needs to take
in order to maintain their attractively in the global information technology services market? Yes,
there definitely are.
However, one cannot take an approach of solidarity in their global economic agenda.
Economists regularly advocate the advantages of globalization, highlighting the economic,
social, and political benefits of trade to both developing and developed countries. Increase in
trade is especially linked to economic growth in developing countries like China and India and
arguably improves their national health. However, as a cost of these benefits, developed
countries are asked to compromise their safety standards to encourage economic growth in
developing countries,' (McCurdy, 2011).
India needs to use this stepping-stone to birth global competition in other industry
markets. The faster India can become competitive in other fields, the better for them and the
global economy. In addition to the previous two pillars of competency necessary for global
stabilization, one must understand the complexity and pattern of an industry along with external
factors of influence. Where is the industry headed and how will it become more efficient in the
future?

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How will external factors influence the future outcome of the industry?
Government affairs can often affect industry positively. If our assumption proves true, the U.S.India nuclear agreement is likely to have positive strategic, economic, and environmental effects,
though the magnitude of these effects cannot be easily determined. The U.S.-India strategic
relationship would likely deepen and move toward extensive and substantial cooperation, though
domestic and external factors would certainly affect the level of cooperation (Ganguly, 2006).
The United States and India understand the progressive rationale needed for continued
globalization and even hold symposiums to discuss how they will work together. Together, they
seek to compile state of the art technologies of the urban housing and supporting infrastructure
research in India and the United States; 2 to identify broader areas where researchers from both
countries can collaborate; and 3 to develop future research directions with joint U.S.India teams
(Syal, 2006).
There are countless examples of industries that have dynamically changed while
remaining in tact. I see the information technology services market as no different than any other
market. The inputs of historical data will continue to educate us in order to create more efficient
outputs. The understanding of market trends and ends are critical to making logical economic
decisions to advance any country financially.
Today, India casts itself as an emerging power intent on exerting the bilateral and
multilateral influence that the countrys founding leaders had long aspired to. Obsolete
frameworks such as nonalignment and developing world leadership have mostly been jettisoned
in the process. However, questions remain about Indias willingness and capacity to take on
global responsibilities to match its global aspirations (Mukherjee, 2011).

INDIA and THE UNITED STATES OF AMERICA Opportunities of Complexity

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