News: Where Brazil scores over India

(BL 29/11/2006) New Delhi - The Nasscom in association with Indian Institute of Management, Ahmedabad, the University of Sao Paolo and London Business School on Tuesday released a report stating the impact of ICT penetration on small and mid sized firms in India and Brazil.

The study found out that Brazilian firms used more ICT than their Indian counterparts. In Brazil small as well as large firms used ICT, while in India mainly large firms used ICT intensely than small firms. Further, in Brazil, older firms have higher ICT usage per worker and per unit of sales.

The report states that reduction in organisational hierarchies is associated with higher returns to ICT in Brazil and directly linked to productivity growth in India.

The findings acknowledged that impact would be felt after certain threshold level of adoption and in both the countries there still remained a major portion of small firms with low ICT usage.

In India, both weak institutions and infrastructure had resulted in lower adoption and lower returns among small and mid sized firms. Auto components, soaps and detergents, electrical, machine tools, apparels, plastic are the sectors that have the potential to increase output and employment in the manufacturing sector with greater ICT penetration.

In India these verticals account for nearly 17 per cent of total manufacturing employment and over 20 per cent of value added. In Brazil, it accounted for around 30 per cent and 32 per cent respectively, stated a release here.