In the context of a “knowledge economy” the software industry seems particularly relevant not only due to the embodiment of knowledge into products, systems and services but also because it provides the tools to adapt the characteristics of systems, channels, nets and organizations, accelerating the diffusion of new information and telecommunication technologies. The software industry is important not only because of its potential of direct economic impact – associated with a huge growth of industry and services productivity - but also due the critical leverage it perform for innovation across virtually every area of activity, playing a decisive role to improve intra and inter organizational learning.
The impressive growth of the software industry in India in the last ten years brought to the forefront the debate about the possibility of replicate this experience in others developing countries. In this sense, we can mention the emergence of some developing countries that followed India, becoming important players into the software industry, particularly some BRICs countries such as China, Brazil and Russia – see, for instance, Botelho, Tschang and Amsden (2003), Arora and Gambardella (2004), Commander (2003) and Carmel (2003). These countries have a complex, heterogeneous and sophisticated software industry, becoming effective alternatives to outsource software development and to exploit local capabilities in order to generate software solutions adapted to wider markets. Starting from this hypothesis, the analysis tries to use a sectoral system of innovation (SSI) approach to discuss the recent development of software industry in those countries. The analysis intends to understand the processes of competence building at the local level and their impacts to the improvement of knowledge diffusion and to the strengthening of innovation capabilities and competitiveness in the software industry.
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