Competitive advantage in the software industry: an analysis of the Indian experience

Abstract

Why do particular industries in some nations succeed internationally? Porter (1990a, p. 855) has provided a framework to answer this question. Porter argued that a nation's competitiveness in any industry is dependent on good factor conditions, strong domestic rivals, aggressive home-based suppliers, and demanding local customers. In this chapter, it is argued that the Indian software industry has been successful despite significant weaknesses on these attributes, and the reasons for its success lie in issues not addressed in the framework. The chapter highlights the need to give greater emphasis to the role of social and historical context to explain the success of a particular industry in a nation.