FORECASTING GROWTH IN THE INDIAN COMPUTER INDUSTRY - A FIRM-LEVEL ANALYSIS

In the past several years, the growth of the computer industry in India has far exceeded the projections made for the Seventh Plan period 1985-90. This can be traced back to the new computer policy as well as to the technology changes in the products offered by individual firms. Incremental changes in technology often change an existing product in a sutble way which makes it difficult to gauge the extent of diffusion of a technology in terms of product installations. However, the individual firm sales performance is an independent indicator of the technology level and output volume. Predictions of firm performance are frequently required by decision-makers, often in the absence of detailed information of interfirm relationships and in the presence of future uncertainty. Several techniques for forecasting are available but the choice between them for making forecasts at the firm level is yet not clear. In this paper, authors attempt to make short-term forecasts of sales of 35 top Indian computer firms that account for nearly 75% of the sales of the total industry. Standard forecasting models are assessed in terms of forecast accuracy at the firm level and reasons for their success or failure are discussed. Forecasts for the current year are compared with recently published sales figures.