A comparison of institutional systems affecting software advancement in China and India: The role of outsourcing from Japan and the United States

The emergence of new innovation depends on co-evolution with institutional systems. Innovations will stagnate if they cannot adapt to institutions, as illustrated by the rise and subsequent fall of some Japanese innovations in the 1980s and 1990s. Similarly, conspicuous software advancements in China and India can be attributed to their unique institutional systems. While both countries share certain similarities that enable them to develop advanced software that attracts leading countries, the outsourcing partners of the two countries—China with Japan, and India with the US—are related to disparities in their institutional systems that have an impact on their software development. This paper undertakes a comparative analysis to identify such similarities and disparities. Since innovation is shifting from developers’ sites to a process of diffusion and utilization with broader interactions with institutional systems, this analysis can provide important insight into the development of science and technology in a global context.