Is Cloud Computing a Tipping Point for IT Innovation Leading to Next Wave of Business Growth in Developing Economies

Abstract

Developing economies like India, China, and Brazil have seen tremendous growth in domestic economy and GDPs. However, the actual GDPs in these economies are much lesser as compared to developed countries like USA and Europe. Indian GDP is just about 5 % of the world economy, and that of China is around 12 % though each of these countries accounts for nearly 20 % each of the world population, whereas US GDP is around 25 % of the world economy though USA accounts for only nearly 5 % of the population.

So, though the emerging economies like India and China are growing at a good healthy rate, there is lot of gap that needs to be filled. One of the main reasons why such a gap exists between developed economies and emerging economies is the technology adoption and diffusion in these economies. For instance, Internet penetration in India is not more than 25 %, whereas in USA, it is more than 70 %. Technology, being a keep enabler for business growth, plays a highly crucial role in enhancing the business processes bringing in efficiencies and productivity improvements in the economy and population, which in turn fuel the business growth.

Technology adoption also requires significant investments in hardware and software. It is not the awareness or lack of skills that is inhibiting the adoption of technology in economies like India, but more to do with lack of required investments in technology hardware and software, particularly the capital expenditure.

In this chapter, we will analyze how new technologies, the new deployment, and delivery models like cloud computing can potentially have a great impact in overcoming capital investments as the main barrier of technology adoption in emerging economies. This chapter will take some examples to drive this point. In addition, this chapter will also analyze other inhibiting factors of cloud computing technology like security, compliance, etc., which need to be addressed to make this technology more suited for such developing economies so that this technology can get into mainstream adoption, thus acting as the fuel to drive further business growth in these economies.