The role of local entrepreneurship and multinational firms in the Growth of IT Sector: an exploratory study of Bangalore.

Abstract

This paper analyzes the growth of IT sector in Bangalore, both in terms of number of firms and employment accounted for by them. Differences in the patterns of growth were observed along the dimensions of ownership and the nature of activity carried out by the firms. While growth in number of firms were predominantly driven by the local entrepreneurs and Non-Resident Indian (NRI) entrepreneurs, the growth in employment was driven by the subsidiaries and joint ventures of multinational firms, and that too through expansions rather than new firm formation. These findings have implications for policy making, with respect to the role of multinational firms and the local entrepreneurship in the growth of an emerging industry.