What impedes the success of late mover IT clusters despite economically favorable environments? A case study of an Indian IT cluster

Abstract

The Information Technology (IT) industry in India, is one of the major contributors to the country's growth story. It is organized in a few strong and dominant clusters across the country. Recent research focuses on the emergence, growth and success of the seven big IT clusters that account for 96.55% of total software exports from the country. Unlike the six successful late mover clusters, there are several other late mover IT clusters that have not experienced similar growth. Why do some of the late mover IT clusters in India succeed while others fail to take off despite favorable economic conditions? This paper applies a case study method to answer this research question by examining a single cluster, using both primary and secondary data. The paper concludes with a new framework to explain how an IT cluster lacks the motivation to succeed when it has to gain traction alongside the competing dynamics of traditional businesses. We find this to be the case more so when traditional businesses are thriving and growing.