The emerging markets of India and china have witnessed the highest rate of economic growth in the global economy in the last few years to an extent that they are almost at the competitive level with the developed countries. For instance China has been having a consistence growth rate of about 9% for the last one decade while India has averaged at 6%. Indeed, most of the transnational corporations, especially software companies are shifting their operation bases to these two countries attracted by the potential for growth, flexible regulatory framework and efficiency f production due to availability of low waged labour. The most fundamental issue in India is the risk and reward equation; it’s therefore easy for an entrepreneur in India to be paid a lot by an outsourcing firm, than could be received from an indigenous firm, thanks to the technological revolution in India from western world. Sagasti (2004 p 4) India accounted almost 80% of the entire world publications on science matters; however, to high income countries published of nearly 25 times as many as those published by the low income countries. Development of information technology in India has brought about tremendous achievements for emerging economy.
From the mid1990s high technology in China has greatly progressed at an alarming rate. Even though there has been negative trend in the Information Technology and various frustrations within the stocks of IT, her industry has great potential of attaining or surpassing the status of most developed countries, taking into account that the current economy of china is almost at par with countries like Germany and France. Hung (2009) comments that high technology in China grew from 8.8% during 1995 to 13.9% in the year 2001. Large numbers of China exports include computer and the telecommunications products according to sources from China Ministry of Information which also indicates that the share of these products in the Chinese IT sector experienced a high growth between the years 1997 to 2003. This kind of information spearheaded China to be a major player in the sector of Technology. During the year 2004 the net profits from the IT industry was more than growth turnover speed but on the other hand sales and production in the industry improved as the same rates. This paper will discuss the development and innovation in IT industries in India and China and how these industries have contributed to the economic, social and economic development of these two countries.
Development of IT and Software industry in India and china
The software industry is seen as the main component of whole Information industry in India, with the availability of large manpower being the pillar of success of this industry. According to Arora and Athreye (2002) there are more than five hundred software firms in the entire country displaying monumental progress that the software industry has made. Lundvall et al (2006 p 322) argues that India’s notion of innovation and systems is aimed at getting the realization that India is to be regarded as a major hub of the successful economies resulting to systematic interaction in the different organizational policies. Software industry is said to have grown form just US $ 150 million in the 1992 to about 5.7 billion US dollars in 2000 and in fact sources say that there is no any other Indian industry that has performed that well amid the global competition.
Its believed that some the Chinese companies which design and produce their own products have enough inroads in the very fast growing domestic market, however china’s dominant growth as low-cost manufacturer offer very substantial advantages to the users in the rest of the World from the reductions on the IT sector department. The largest contributor of the progress in the China‘s Information technology sector is Taiwan. As from 1990, Taiwan industry in IT has dealt with many challenges of reducing profits and lack of enough professionals in the IT sector. One measure it took is to take a privilege of the many available human capital in terms of professionals who were readily available and the essence of low labor costs available in china. At the start of 1990, Taiwan IT firms started to move to interior of china, and currently the Taiwan investment in the china IT industry is evident.
India is also one of the major exporters of software with its total share of exports in the entire global market with sales growing at 50% between 1995 and 2000 (Arora, Gambardella, 2005, p. 7). Indeed, currently the software industry in India makes exports of software and other services to nearly 95 countries around the world. The employment statistics in both India and China reveal that the rate of unemployment has drastically reduced since the time when technology industry and specifically software began to take root in the countries and expectations are high that this trend will increase in the subsequent years. Stough (2005 p. 235) is on the view that the descriptions that are documented on the results of IT in India mainly focus on the Software exports. Most importantly, the Government of India also played a bigger role in the development of its software industry. In 1986, the Indian government announced a new software policy which was then designed to serve as a catalyst and motivator for the software industry. Improvement followed in 1988 with the new world market policy and establishment of the all software Technology Parks of India scheme. Considering attracting foreign direct investment, the Indian government allowed foreign equity up to the 100% and all duty free importation on every inputs and products.

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