India, emerging electronics powerhouse?
The Financial Times declared in a headline this week that “India is set to gain from outsourcing.” Hardly breaking news. But the article goes on to discuss how, by 2010, the developing world will account for more than a quarter of all electronics manufacturing output, up from less than one fifth two years ago. Further, ...
The Financial Times declared in a headline this week that "India is set to gain from outsourcing." Hardly breaking news. But the article goes on to discuss how, by 2010, the developing world will account for more than a quarter of all electronics manufacturing output, up from less than one fifth two years ago. Further, outsourcing is likely to propel India to increase its electronics manufacturing from $5 billion in 2005 to $38.8 billion in 2010—almost an eightfold increase. No doubt this could be a significant leap for India's electronics manufacturing industry, especially since India has traditionally been viewed as a software provider rather than a hardware provider, unlike China. But for all the hype about India's gains—and assuming that India can sustain the skill-base required to develop at this rate—the projections show that India still won't catch up to its east Asian competitor. As the FT notes:
The Financial Times declared in a headline this week that “India is set to gain from outsourcing.” Hardly breaking news. But the article goes on to discuss how, by 2010, the developing world will account for more than a quarter of all electronics manufacturing output, up from less than one fifth two years ago. Further, outsourcing is likely to propel India to increase its electronics manufacturing from $5 billion in 2005 to $38.8 billion in 2010—almost an eightfold increase. No doubt this could be a significant leap for India’s electronics manufacturing industry, especially since India has traditionally been viewed as a software provider rather than a hardware provider, unlike China. But for all the hype about India’s gains—and assuming that India can sustain the skill-base required to develop at this rate—the projections show that India still won’t catch up to its east Asian competitor. As the FT notes:
China, which in the past 10 years has become the most important country for electronics manufacturing, will in 2010 account for 46 per cent of outsourcing work in this industry, down from 48 per cent two years ago.
So even if India will be a “big gainer, accounting for a projected 10 per cent of the total in 2010, up from 2 per cent in 2005,” electronics manufacturing outsourcing will still be largely dominated by China.
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