Evolving Towards Innovation? The Recent Evolution and Future Trajectory of the Indian Software Industry

E. Sridharan

Chapter 2 in India in the Global Software Industry, 2004, pp 27-50 from Palgrave Macmillan

Abstract: Abstract This chapter reviews the evolution of the Indian software industry over the past decade, addressing the issue of whether it can graduate to technologically more complex and higher value-added projects, software products and integrated hardware — software products and systems. It has been argued that while the Indian software industry has been a success story of exports based on exploiting the labour cost differential between India and the US for fairly low value-added software services, it will need to innovate to move up the value chain if it is to sustain and enhance its competitive position in the coming years. Why the focus on innovation? What is critical to any overall effort to compete successfully and sustainably in world markets, which includes modernizing and making the best use of the installed capacities in industry and infrastructure, is the capacity for, and quality of, innovation. To get to grips with what is happening on innovation in the Indian software industry, the literature on innovation offers several approaches to the issue of the context of innovation in India in the IT industry. A useful starting point, theoretically, for a study of the context of innovation in such a case, would be a broad Schumpeterian definition of innovation as consisting not only of new products and processes, but also of new materials, new markets and new forms of organization.

Keywords: Foreign Direct Investment; Software Industry; Technological Spillover; Innovative Capability; Indian Firm (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-4039-4384-2_2

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DOI: 10.1057/9781403943842_2

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