Formation of Information Technology Clusters: How Late Movers Follow Models Different from Early Movers

The Information Technology (IT) industry has played a major role in India’s recent economic growth. However, the pattern of growth and cluster formation is not uniform across the country. While Bangalore emerged as a natural cluster, the governments in Hyderabad and Kolkata had to demonstrate entrepreneurial leadership qualities to create clusters there. This paper identifies the factors that contribute to the creation of clusters, particularly for locations that are late entrants such as Hyderabad and Kolkata. The paper concludes that quality of entrepreneurship of the state and pool of local entrepreneurship are equally important as industry attractiveness and factor availability for rapid cluster formation.