The Clustering Effect

Even though, STPI Centers have come-up across the country in as many as 52 locations, the major Industry concentration is at Bengaluru, Noida, Chennai, Hyderabad and Pune, reflecting the technology clustering effect similar to other technology clusters like Silicon Valley, Boston, Dallas, Ireland, Sweden and Tokyo.

First Phase: In 1991-92, there were very few Indian companies who were doing software exports from India. Those exporting software included few multinational companies like Texas Instruments, Hewlett Packard, and Digital. One could term this as the first phase of the developmental process.

Second Phase: In the second phase of the developmental process, the concept of the "Offshore Development Work" took birth. This second phase of the development, which started in 1993, took India, infact Bengaluru in particular, to greater heights by 1998-99.

By the end of March 2001, the Industry has grown to US $ 5.7 billion in software exports with 380 multinational companies establishing base in India with the largest concentration of the technology services. All the Global Leaders in Hi-Tech areas like IC Design, Communication Software and System Software have setup a base for their operations in
India.

Third Phase: The success of the 2nd phase paved the path for the third phase of development to take place. The third phase of development led to very close and intimate relations with the Silicon Valley start-up companies. In fact, every small Hi-Technology Start-up Company in Silicon Valley valuated at millions of dollars in US market, started establishing their development Centers in Bengaluru.

Fourth Phase: During the fourth phase of the development many Indian companies started owning the intellectual property within India and earning the royalty from the global players.