Background
Research on how firms from developing countries develop and grow to become global
players in their fields remains underdeveloped. This is a particularly important gap in the
literature given that over recent years foreign direct investment (FDI) from developing
countries has increased at a faster pace than FDI from developed countries. Thus, the
growing activities of MNEs from developing countries raise an important question regarding
their sources of international competitiveness given that the institutional and economic
context within which these firms develop and grow are different from those in developed
countries. The rapid emergence and growth of information technology service providers from
India is a case in point. Over a relatively short period, India has become a preferred
destination for off-shoring of IT services. Today, India accounts for more than 50 percent of
the global IT services market valued at more than US$180 billion annually. The IT off-shoring
sector in India now employs more than 3 million people and contributes more than 2 percent
to the national GDP. The success of the IT services sector in India is often attributed to the
competitive advantage that India has in the human resources area. For example, India has
an abundance of engineering graduate and is among only a few countries which have the
structural and institutional capacity to train IT skilled graduates in large numbers necessary
to sustain the IT services industry.