Conclusion: Global Links, Domestic Market and Policy for Development

The Indian software industry has come a long way from its humble beginnings in the 1980s. The industry has grown at an impressive rate over the past decade and has in aggregate, and for its major companies, attained brand name recognition in selected software service niches. Its export-driven model now commands the world’s attention for skilled professionals and offers hope to many developing countries which are struggling to cope with a hyper-competitive post-WTO global economy. Yet, there is a broad consensus among the contributors to this volume that the Indian software industry is overwhelmingly concentrated in software services and, more recently, in low-tech IT-enabled services. In this concluding chapter we reiterate some of the principal challenges facing the industry and suggest broad policies that will enable the Indian industry to take the high road to innovation. There are two complementary strategies that reinforce each other: tapping the advantages offered by the global economy to develop national technological capability and serving the domestic market to diversify the foundations of the software industry. Both are likely to contribute to a stronger innovative capability. Based on this understanding, we also lay out some likely scenarios for the Indian industry in the next few years.