The Global Opportunity in IT-Based Services: Assessing and Enhancing Country Competitiveness
Rapid advances in information technology (IT) and the resulting global connectivity are fueling dynamic growth in the services sector. Demand for IT and IT-enabled services (ITES) is estimated to represent a $500 billion annual market, of which only about 20 percent has been realized. Thus, this sector is creating new opportunities for economic growth, social empowerment, and grassroots innovation in developing countries. The potential for employment for youth and women is a particular benefit. This book is a practical guide for policy makers aiming to grow their IT services and ITES industries. It defines the development impact of the two industries and then analyzes factors crucial to the competitiveness of a country or location—including skills, cost advantages, infrastructure, and a hospitable business environment. It examines the potential competitiveness of small countries and of least developed countries specifically. This volume presents the Location Readiness Index, a modeling tool developed by McKinsey and Company for the World Bank and the Information Development Program. The index helps countries to identify their areas of relative strengths and weaknesses and to focus their efforts on interventions with the greatest likelihood for success. The book concludes by discussing specific policy options for enabling growth in the IT services and ITES industries.
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The Global Opportunity in IT-Based Services: Assessing and Enhancing Country Competitiveness
Rapid advances in information technology (IT) and the resulting global connectivity are fueling dynamic growth in the services sector. Demand for IT and IT-enabled services (ITES) is estimated to represent a $500 billion annual market, of which only about 20 percent has been realized. Thus, this sector is creating new opportunities for economic growth, social empowerment, and grassroots innovation in developing countries. The potential for employment for youth and women is a particular benefit. This book is a practical guide for policy makers aiming to grow their IT services and ITES industries. It defines the development impact of the two industries and then analyzes factors crucial to the competitiveness of a country or location—including skills, cost advantages, infrastructure, and a hospitable business environment. It examines the potential competitiveness of small countries and of least developed countries specifically. This volume presents the Location Readiness Index, a modeling tool developed by McKinsey and Company for the World Bank and the Information Development Program. The index helps countries to identify their areas of relative strengths and weaknesses and to focus their efforts on interventions with the greatest likelihood for success. The book concludes by discussing specific policy options for enabling growth in the IT services and ITES industries.
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The Global Opportunity in IT-Based Services: Assessing and Enhancing Country Competitiveness

The Global Opportunity in IT-Based Services: Assessing and Enhancing Country Competitiveness

The Global Opportunity in IT-Based Services: Assessing and Enhancing Country Competitiveness

The Global Opportunity in IT-Based Services: Assessing and Enhancing Country Competitiveness

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Overview

Rapid advances in information technology (IT) and the resulting global connectivity are fueling dynamic growth in the services sector. Demand for IT and IT-enabled services (ITES) is estimated to represent a $500 billion annual market, of which only about 20 percent has been realized. Thus, this sector is creating new opportunities for economic growth, social empowerment, and grassroots innovation in developing countries. The potential for employment for youth and women is a particular benefit. This book is a practical guide for policy makers aiming to grow their IT services and ITES industries. It defines the development impact of the two industries and then analyzes factors crucial to the competitiveness of a country or location—including skills, cost advantages, infrastructure, and a hospitable business environment. It examines the potential competitiveness of small countries and of least developed countries specifically. This volume presents the Location Readiness Index, a modeling tool developed by McKinsey and Company for the World Bank and the Information Development Program. The index helps countries to identify their areas of relative strengths and weaknesses and to focus their efforts on interventions with the greatest likelihood for success. The book concludes by discussing specific policy options for enabling growth in the IT services and ITES industries.

Product Details

ISBN-13: 9780821381939
Publisher: World Bank Publications
Publication date: 04/21/2010
Sold by: INDEPENDENT PUB GROUP - EPUB - EBKS
Format: eBook
Pages: 116
File size: 1 MB

Table of Contents

Foreword ix

Acknowledgments xi

About the Authors xiii

Abbreviations xvii

Trends and Opportunities for Developing Countries 1

IT-Based Services: Global Outlook 2

Country Competitiveness in the Global Market of IT-Based Services 11

Policy Options to Enhance Competitiveness 22

Conclusion 38

Appendix A The Location Readiness Index as a Diagnostic Tool 41

Dimensions of the LRI: What Is Needed to Be Competitive? 41

The LRI Model 49

Applying the LRI Model to the United States, India, Indonesia, and Kenya 52

Appendix B Application of the Location Readiness Index to Indonesia and Kenya 55

Talent Pool 57

Cost 62

Infrastructure 65

Business and Living Environment 67

Risk 67

Market Maturity 69

Using the LRI to Improve the IT/ITES Landscape in Kenya and Indonesia 71

Impact on the Economy 77

Notes 79

References and Other Resources 83

Index 89

Boxes

1 Government and University Initiatives in Skills Development for IT Services and ITES 30

B.1 Calculating the Talent Index 58

Figures

1 Global Opportunities for IT Services and ITES 4

2 India's Addressable Market for Vertical and Horizontal ITES Functions 6

3 Global Distribution of Offshore IT Services and ITES Markets 7

A.1 Main Dimensions and Components of the LRI 46

A.2 Interpreting the LRI Index Scores 48

A.3 LRI Model: Start Screen 49

A.4 LRI Model: Primary Data Dialog Box 50

A.5 LRI Model: Secondary and Index Data Dialog Boxes 53

B.1 Indonesia and Kenya Compared with India and the United States 56

B.2 Calculation of Total Stock of Ready-to-Hire Employees 57

B.3 Indonesia's Ready-to-Hire Population 60

B.4 Kenya's Ready-to-Hire Population 61

B.5 Cost of Operations: Data Processing 63

B.6 Average End-to-End Cost of a 2-Megabits-per-Second Leased Line 64

B.7 Market Maturity Index 70

B.8 Addressing Talent and Real Estate Gaps in Kenya 72

B.9 Percentage of Personal Computers with Pirated Software Installed, Middle East and Africa, 2008 74

B.10 Addressing the Talent and Real Estate Gaps in Indonesia 75

B.11 Percentage of Personal Computers with Pirated Software Installed, Asia Pacific, 2008 76

Tables

1 A Typology of IT Services and ITES 3

2 Frameworks for Assessment of Locations for IT Services and ITES 12

3 Relative Percentage of Components in the Total Cost of Offshoring 15

4 NASSCOM ITES Skill Competence Testing Themes 28

B 1 Labor Cost per Hour per Full-Time Equivalent for Data Processing 64

B 2 Quality of Infrastructure Index 66

B.3 Business and Living Environment Index 68

B.4 Overall Risk Index 69

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