This essay explains the opportunities and constraints created by the increasing globalization of the Indian software industry and the organizational changes that have accompanied the growth in software exports since the mid-1980s. Technological changes over the past three decades have sustained the global demand for software that advanced industrial countries have been unable to meet. This created opportunities for new producers, that India was able to take advantage of, thanks to the availability of a relatively large, low-wage high-skill, English speaking labour pool, and increasingly liberal economic policies. After entering the international division of labour by providing low-wage, low-skill on-site services, the Indian industry began to increasingly shift more value-added off-shore services in the 1990s to become the largest non-OECD software producer by 2000. Post 2001, the industry continued to grow despite a global slump in demand by capitalizing, in part, on the globalization of R&D services. Despite the transformation in the organization and the capabilities of the industry, however, the export of profitable software products and packages is limited. Besides explaining the differential success in services and products, the essay discusses the relevance of the Indian case for other newly industrializing countries wanting to enter the global software industry.
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