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Bangalore: The Silicon Valley of Asia?

work, Entrepreneurship, and finance

This paper examines the growth and other dimensions of the performance of India’s Information Technology (IT) industries, which have been remarkable during the 1990s. It pays particular attention to the role of policy in the development of these industries. Several policy changes were indispensable in inducing the rapid emergence and growth of the Indian IT industries over the past two decades. The 1984 Computer Policy and 1986 Computer Software Export, Development and Training Policy encouraged valued-added exports of IT products by allowing them easier access to the latest technologies abroad. The Software Technology Parks scheme introduced in the early 1990s facilitated a gradual shift away from on-site to offshore service provision during the 1990s. In 1998, the National Information Technology and Software Development Task Force was formed, which in 1999 made wide-ranging policy recommendations for the future growth of the IT industries. This paper concludes by suggesting that comparing India’s Bangalore to California’s Silicon Valley in the US is not only misleading but also distracts attention from the deeper challenges and opportunities that IT affords the Indian economy. In particular, the policy perspective needs to expand beyond a narrow focus on the software industry.

91wp.pdf (284.04 KB)
AnnaLee Saxenian
Publication Date
February, 2001