ABSTRACT
Private IT firms have a privileged status in the sense that they enjoy greater preferential treatment and are freer from state interference than firms in more traditional sectors. Many IT companies, particularly the larger ones, are the backbone of their local economy, and have gained a competitive edge under local government support. The state has fostered and directed the growth of the IT industry in an attempt to strengthen it against competition from foreign companies. This ‘pick-the-winner’ approach does not seem to have stifled market competition. The competition between companies and between localities is so fierce that favoured companies continually need to improve their performance to maintain an advantage over their rivals. Local governments have sought niches in the industry to compete against other localities.
