Catching‐up or Leapfrogging in the Indian IT Service Sector: Windows of Opportunity, Path‐creating, and Moving up the Value Chain

Abstract

Indian IT service firms are successfully competing with world leaders and research on the industry is emerging. Providing analysis at firm rather than industry level, this article identifies the windows of opportunity open to Indian firms, with the following findings: (i) the catching‐up process by Indian IT firms can be classified as a three‐stage ‘body shopping–offshoring–global delivery model’, comparable with the three steps in original equipment, own‐design and own‐brand manufacturing; (ii) the window of opportunity for Indian firms was primarily the techno‐economic paradigm shift, and secondarily the government's regulation and support of the industry; and (iii) Indian firms initially partially re‐invented their own path by offshoring and created their own global delivery model, gradually moving to higher value‐added services.