The role of Indian information technology firms in "Factory Asia"

Abstract

We would like to investigate the presence of Indian IT firms in the global value chains, in particular those of Singapore and Southeast Asia. Richard Baldwin’s paper, Trade and Industrialization after Globalization’s 2nd Unbundling provides us with the theoretical underpinnings. His theses is that trade works in different ways after the ICT revolution. Earlier it was important to build the entire supply chain domestically to be able to supply products. Now it is possible to build and export very sophisticated products using the supply chains that reside in other countries. For instance, Apple computers are produced in China but the design, software and marketing reside in different countries. The value-added from Chinese manufacturing is fairly small compared to value-added from the other components. So the competition between countries is no longer in terms of products but in terms of a position in the supply chain.