DDP 728. Nirupam Bajpai and Navi Radjou. "Raising the Global Competitiveness of Tamil Nadu's Information Technology Industry." October 1999. 35 pp.

The explosive growth of the information-intensive services sector is radically altering the world economic landscape. In the emerging knowledge-based global economy, the sustainable competitive advantage of nations will reside not in their possession of abundant natural resources or cheap labor force, but in their ability to harness their countries’ intellectual assets. As such, the knowledge revolution offers a unique chance to those developing countries and sub-regions like Tamil Nadu, with substantial knowledge assets to leapfrog entire stages of development.

This paper argues that in order to assume a leadership role in the making of the global knowledge economy, Tamil Nadu needs to initiate a knowledge-led development policy that builds on the state’s successful IT industry. The success of such a growth strategy will critically depend on the international competitiveness of its local knowledge industries. Therefore, an attempt is made in this paper to propose a roadmap to raise the global competitiveness of Tamil Nadu’s IT industry.

To be able to put together a comprehensive knowledge-led development policy, Tamil Nadu needs to strengthen the capabilities of not only the supply side, but also the demand side of its IT industry. Indeed a thriving domestic market would provide a spur to the local IT firms, allowing them to hone their product development and marketing skills first at home and then abroad.

JEL Codes: L86, O38

Key words: Information Technology, Global Competitiveness, and Tamil Nadu.

Nirupam Bajpai is an Associate at the Harvard Institute for International Development (HIID) and the Director of the India Program at HIID.

Navi Radjou is a Consultant at HIID.