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WP/04 Economic Adversity and Entrepreneurship-led Growth: Lessons from the Indian Software Sector

It is commonly believed that the business environment in developing countries does not allow productive technology-based entrepreneurship to flourish. In this paper, we draw on the experience of Indian software firms where entrepreneurial growth has belied these predictions. This paper argues that the business models chosen by Indian firms were those that best aligned the country’s abundant labour resources and advantages to global demand. Many potentially higher value added opportunities struggled to attain success, but the qualitative value of experimental failures and the capability gaps they exposed was invaluable for collective managerial learning in the industry. Second, the paper also shows that the presence of growth opportunities and the success of firms stimulated institutional evolution to promote entrepreneurial growth. Last we show that the distinctive aggregate contribution of entrepreneurial firms was that they outperformed business houses and multinational subsidiaries in their more productive use of available capital resources whilst achieving similar levels of growth in output and employment. This paper draws upon an earlier shorter paper co-authored with Mike Hobday and titled ‘Overcoming Development Adversity: How Entrepreneurs Led Software Development in India’.
Publisher:
UNU-WIDER
Series:
WIDER Working Paper
Volume:
2010/04
Title:
WP/04 Economic Adversity and Entrepreneurship-led Growth: Lessons from the Indian Software Sector
Authors:
Suma Athreye
Publication date:
January 2010
ISBN 13 Web:
978-92-9230-239-9
Copyright holder:
© UNU-WIDER
Copyright year:
2010
Keywords:
technology entrepreneurship, institutions and economic development, Indian software, intellectual property rights
JEL:
L26, L86, O10, 032, O34, I28
Project:
Promoting Entrepreneurial Capacity
Sponsor:
UNU-WIDER gratefully acknowledges the financial contributions to the project by the Finnish Ministry for Foreign Affairs, and the financial contributions to the research programme by the governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Finnish Ministry for Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida) and the United Kingdom (Department for International Development).
Format:
online and printed copies
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