Is IT boom because of the State, or in spite of it?

One of the more controversial points made the chieftains of the Information Technology industry is that the IT boom happened in spite of the government, not because of it. In other words, the “State” has little or no role to play or claim. The claim is obviously debatable because of the State’s role in securing and awarding land for IT companies, in setting up engineering colleges which produce their workers, in setting up the scientific and R&D labs which created the base, etc.

But evidence that the IT chiefs may be partially right comes from the growth in software exports from Karnataka in the year gone by. For the better part of the last two years, and more so last year, the JDS-BJP coalition government of H.D. Kumaraswamy was conspicuous by its perceived lack of interest in massaging IT egos, unlike in the S.M. Krishna years, when the State seemed very happy and eager to play The Great Provider.


Yet, according to a story in Mint today, software and service exports from Karnataka only continued to grow. It will be 44 per cent of the country’s total IT and back-office services exports of around $40 billion. Software exports from the State, which were growing at a compounded annual growth rate of 38% over the past three years, are expected to grow by 46% in 2007-08.

“According to M.N. Vidyashankar, principal secretary to Karnataka government, department of IT, biotechnology, science and technology, the software exports from the state will touch Rs70,000 crore ($17.6 billion) during 2007-08 compared with Rs47,900 crore in 2006-07. Karnataka, which had a gross state domestic product of about Rs1.94 trillion in 2006-2007 dominates software and back-office exports from India. “We could’ve done more than Rs70,000 crore but forthe rupee’s appreciation,” said Vidyashankar.”

So, what’s the message? That the IT boom will go on, government or no government? Infrastructure or no infrastructure?

Read the full story: Karnataka to account for 44% of IT exports