India's Silicon Valley or Silicon Valley's India? Socially embedding the computer software industry in Bangalore

Since the 1980s, the changing character of the Indian state has allowed it to move away from a highly regulated, autarkic development model to pursue lighter regulation and closer integration with the global economy. This move created the incentives for India's emergence as a leading software exporter. Within India, Bangalore emerged as the leading software-producing region and the large number of domestic and foreign firms there has led to popular references to it as India's Silicon Valley. This essay, however, argues that referring to Bangalore as Silicon Valley's India is more appropriate, as it struggles to transform itself from a region that develops software for global markets to one that defines new products and technologies. Driving the growth of the Indian software industry is the export of labour-intensive services, while the relatively small and slow-growing domestic market has limited the nurturing of original ideas. The essay explains the limitations in terms of social constraints on the state despite its changed character. The analysis of how changing state-society relations have shaped the software industry in Bangalore provides a means of addressing debates on the importance of social embeddedness in agglomeration and late industrialization in newly industrializing countries.