The software industry and India's economic development

This paper assesses the contribution of software to India's economic development, paying particular attention to the role of software in the absorption of labour and the development of human capital in the economy. The success of the software industry has increased the relative value of professional workers, not only programmers, but also managers and analysts. The growing importance of human capital, in turn, has led to innovative models of entrepreneurship and organization, pioneered by the software sector, and these are slowly taking root and spreading to other sectors of India's industry. A potentially important and under-appreciated contribution of the software industry is thus its exemplar of good entrepreneurship and corporate governance to the rest of India. Though less visible than the macro contributions to employment and foreign exchange, this role is a source of productivity improvement for all industries, and can have powerful long-term benefits for India's industrialization and growth. (C) 2002 Elsevier Science B.V. All rights reserved.