ABSTRACT
This chapter draws on extensive interviews with about 40 software firms of different sizes in Bangalore, Delhi and NOIDA that the author carried out during three rounds of fieldwork in India between 2001 and early 2005. It draws on the existing literature, conceptually discusses the sources and nature of competitiveness of firms clustered in knowledge-based industries, and the challenges that small firms face in building this competitiveness. The chapter identifies the patterns of geographical distribution of the software firms and clusters in the Indian software industry. It analyzes the strategies that domestic small firms in software clusters have adopted to build their competitiveness, focusing on the patterns of their capability development, and of inter-firm linkages between small domestic firms and their affiliates and clients both within India and abroad. Finally it summarizes the findings and discusses their implications for policy.
