Theory, Evidence and Implications
Batten Entrepreneurship series
Edited by Phillip H. Phan, Sankaran Venkataraman and S. Ramakrishna Velamuri
Chapter 5: The Role of Government in the Formation of Late Emerging Entrepreneurial Clusters of India
Kavil Ramachandran and Sougata Ray INTRODUCTION Developing countries, eager to catch up on industrialization, have identiﬁed industries based on information technology (IT) as a major growth driver. It is in this context that the recent interest in industrial clusters as a means to accelerate regional development, particularly after the boom in the IT industry in Silicon Valley, has to be viewed (Sturgeon, 2003). At the same time, eﬀorts by several states and countries to recreate Silicon Valleys have had mixed results. Why does it happen so? Are such clusters human made? Is their growth a natural phenomenon or can it be catalyzed? If so, how and how much? Knowledge drawn from manufacturing industries or other service industries provides only partial answers. This is true in the Indian context as well. Unfortunately, though many scholars have tried to explain why India could emerge as an IT superpower, little has been said on how and why successful IT clusters have been formed in some cities such as Hyderabad and what needs to be done to sustain and replicate the success. This chapter attempts to provide some initial explanation to this complex process. While most studies on clusters reveal the history and factors that assisted the formation of clusters, a key challenge, often not discussed is whether it is possible to compress the time normally and naturally taken to form clusters and, if so, how. This insight is particularly important now since time has become a critical success factor for both...
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