GLOBALISATION AND URBAN RESTRUCTURING OF BANGALORE, INDIA : Growth of the IT Industry, its spatial dynamics and local planning responses

In its foray into the global economy through policy led liberalization in the 1990s, the Indian economy has been able to capitalize on the opportunities for production in the Information Technology sector. Within this sector, much of the growth has been in the export oriented software and back office services production (Heeks, 1996, 1998). As estimated in 2001 -02 the share of software exports from India is still only 1.41% of the global market (NASSCOM, 2002) but the share of the industry in the GDP has risen from 0.59% in 1994-95 to 2.87% in 2001-02 (ibid, 2002). What is significant about the growth of the Software and Services sector has been its buoyancy with respect to the other sectors of the economy. The Software Industry in India grew by a CAGR of over 40% from 1990 –99 as compared to only 6.6% for the economy as a whole and is higher than the growth rate of the US industry during the same period (Saxenian, 2000; Arora et al, 2001, D’Costa, 2003). Exports form almost 75% of the total production that is attributed to the global outsourcing demand for software development in locations that have a sufficient pool of low cost skilled labour. In the last two decades the reputation of the software programmers from India have been firmly established in the global market making them very much a part of the international division of labour in the software industry.