Five reasons why India’s IT cookie could crumble

The Economist has a story this week on India’s “misnomer” of an industry— information technology—with Mysore figuring in the very sentence.

With revenues topping $50 billion, with annual growth rates in the 30 per cent range over the last 10 years, the sky is the limit for IT, says the paper. But it could all go horribly wrong, and not just because of clogged and insufficient infrastructure, and the rising rupee.

Why?

# Because the tax breaks that subsidise the industry, some of which expire in 2009.

# Because of a growing talent shortage. Of the 450,000 diplomas and graduates, only half are employable.

# Because competitors, like central Europe, are beginning to emerge.

# Because foreign IT firms are setting up base in India, enabling them to rival Indian firms in cost and scale.

# Because Indian firms are happy to keep systems running, and do not develop new solutions to business problems. This will be a problem as automation increases.

Read the full article here: Information Technology in India