Larger Indian firms has more ICT intensive production

NEW DELHI: Larger Indian firms use more ICT intensive production processes relative to smaller Indian firms, according to a study on ICT Adoption and Productivity in Developing Countries: Brazil and India.

Nasscom released the study here on Tuesday, conducted in collaboration with IIM Ahmedabad, University of Sao Paolo and the London Business School (LBS). The study is based on ICT adoption and its impact on firm’s performance in the SMB segment in India and Brazil.

It is a part of Nasscom’s initiative to create a conducive IT ecosystem that enables Indian SMB’s to leverage the power of IT and become globally competitive.

S Ramadorai, CEO, Tata Consultancy Services, said that the growth of the Indian IT market would depend on the domestic IT market. “There is a wide variability in IT adoption across verticals, regions and market segments ranging from sophisticated IT users to first time adopters in the country. As a result, a ‘one size fit all’ approach may not work and the IT industry together with technology users needs to collaborate and identify pain-areas and create solutions to address them.”

Simon Commander, director, Centre for New and Emerging Markets, LBS, said the study reveals that there are very high returns on ICT adoption. The study said that reduction in organisational hierarchies is associated with higher returns to ICT in Brazil and is directly positively related to productivity growth in India.

The evidence also suggests that this positive effect only kicks in above a certain threshold level of adoption. Brazilian firms on an average have adopted more ICT than their Indian counterparts and use that ICT more intensively.

Prasanto K. Roy, editor, Dataquest said, “It is a long way before the SMBs make IT the core of their businesses.”

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