International Trade in Services.pdf - DSpace at Khazar University

Exporting Information Technology Services: In the Footsteps of India 235
The key focus in high-technology parks is service provision. A streamlined
interface with public authorities and ready-to-use facilities are the main attractions.
IT service companies require reliable electricity and access to high-capacity
information and communication technology networks. Many high-technology
parks ensure full-time, year-round power generation by hosting their own power
generators. They also link up to the global backbone of information and communication
technology networks to ensure sufficient bandwidth capacity for clients.
In addition, the parks are associated with real estate services and ancillary services
such as transportation links, banking, restaurants, and hotel accommodation.
Some high-technology parks are large enclaves located next to population centers,
as in China, while other parks are located in small, individual office towers within
city centers, as in the Philippines. There is no single best solution, and regulatory
flexibility can allow real estate agents and park operators to experiment with marketable
alternatives. High-technology park administrations are normally privately
owned and operated for profit. They may offer expedient, single-window environments
for incorporation, licenses, and other regulatory issues, thus allowing new
entrants to focus on operations rather than on disentangling red tape and unnecessary
bureaucracy.
Some high-technology parks offer fiscal incentives to export-oriented
investors, such as time-limited income tax holidays, duty-free importation of capital
goods, and grants to train new employees. 9 However, fiscal incentives are seldom
necessary to attract investment in the first place, partly because subsidiaries
of foreign multinationals operate as not-for-profit cost-recovering centers in these
parks. Other types of common incentives include full equity ownership for foreign
investors, the facilitated employment of foreign nationals in supervisory and
technical positions, and domestic sales allowance equivalents as a share of total
sales. The high-technology parks can aid in sheltering the IT service sector in
countries that are affected by high levels of criminality and facilitate access to land
in countries in which this access is a serious issue.
In addition, the labor legislation in some countries prohibits workers, especially
women, from working evenings or on night shifts. This can have a negative
effect on IT service companies with clients in different time zones. Work-time
restrictions are more of an issue in the IT-enabled service sector, but certain types
of IT services need to be provided during the operating hours of clients.
Bangladesh and India are two examples of countries that have softened their labor
legislation to allow certain companies to operate evening and night shifts, but
only to meet the demands of clients in other time zones. By being sensitive to the
needs of local and foreign investors, as well as local real estate companies, policy
makers can stimulate investment in high-technology parks without committing
public funds. Common issues include the opposition of electricity providers