| Chapter 1: | Introduction |
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within an overall neoliberal policy framework? In this book, I answer these questions by examining the late development strategies adopted by these three states in a comparative framework. In framing these questions and laying out the theoretical framework, I draw partly upon Breznitz (2005).
The main literature on the role of the state in industrial development in developing countries has focused on two central themes: timing of industrialization and learning and technology-transfer-based acquisition of the latest technologies. However, these themes do not apply to knowledge-based industries such as software as the technologies are constantly evolving and markets are not well-defined. Hence, strategic planning by the state for large-scale investments in manufacturing capabilities is not helpful. A more recent variant of this literature is the neodevelopmental statist argument that stresses the “flexible developmental state” (O'Riain, 2000, p. 163) or “networked polity” (Ansell, 2000, p. 305) as the main explanation for the rapid advancement of some emerging economies in high-technology industries in a system of global production networks and vertical specialization. However, this model calls for an extremely flexible bureaucracy with deep knowledge of industrial domains that can respond very quickly to the fast-changing needs of the industry. This feature is missing in the classical Weberian-style bureaucracies such as the one in India, with its separation of general and technical wings, long and stable career patterns, and little involvement of outside experts in policy making. Hence, even this framework is unable to explain the Indian advancement in this industry.
Current explanations for the advancement of the Indian software industry focus mainly on the economic liberalization policies of the central government during the 1990s, the availability of abundant and cheap skilled labor and the resulting