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Software Technology Park of India

India has earned itself a reputation of an IT superpower.Software Technology Parks of India have played a seminal role in accomplishing this status. Today, STPIs all over the country are synonomous with excellent Infrastructure and Statutory support aimed at furthering growth of Information Technology in the country.

Software Technology Parks of India (STPI), is a society set up by the Department of Communication & Information Technology,Government Of India in 1991, with the objective of encouraging, promoting and boosting the Software Exports from India.

STPI maintains internal engineering resources to provide consulting, training and implementation services. Services cover Network Design, System Integration, Installation, Operations and maintenance of application networks and facilities in varied areas ranging from VSATs to ATM based networks.

Emergence of Software Policy

The first Computer Policy of 1984 and Software Policy of 1986 emphasized the concept of software development and export through data communication links. This policy's objective was to develop software in India using Indian expertise on sophisticated computers, which were being imported duty free. This way, one could make use of the low cost expertise available in India and avoid the expense of time and cost in traveling abroad.

However, there was a substantial cost involved in the data communication links. As per the policy, companies were allowed to establish data communication links by their own initial investments. The ownership of the equipment and the operations of the same Gateway would remain with VSNL and VSNL would pay back to the user over a prescribed period after deducting the operational maintenance costs.
This used to be as high as Rs.45.00 lakhs per 64 Kbps for an Indian half circuit per year.

Texas Instruments has the credit of being the first software company with an Offshore Development Facility in Bangalore. Texas Instruments was also the first to establish its own Gateway at Bangalore with the support of VSNL on a 'build & operate' agreement.

Except Texas Instruments, no other company succeeded in establishing a similar facility. It was very expensive for smaller companies and other offshore development users to afford the high cost of the data communication.

Further, an Officer from the Dept. of Electronics, Govt. of India was posted at Texas Instruments to monitor the data using the protocol analyzer before issuing necessary certification. There were many hardships that Texas Instruments had to encounter and circumvent by liaisoning with DoT, Ministry of Commerce and the Dept of Electronics, to make sure that the concept of offshore development could be made a success.In fact, when the Govt. announced the first Software Policy in 1986, many such issues were addressed.

STPI's role began in the government's shadow and it was more of an entrepreneurial role of working directly with software companies and working like a corporate. However, this did not mean that STPI functioned like a typical government department. The role of STPI was more of a service provider that could be leveraged by software companies.

Therein emerged three important factors that gave the necessary impetus to the concept. These were the newness of the business model, Internet infrastructure facilities and the government interface; all these brought a positive response from industry, especially the SME sector, which needed this support for their business to grow.

The concept of STP Scheme was evolved in 1991 and enunciated the following objectives:

  • To establish and manage infrastructure resources such as Data Communication facilities
  • Core Computer facilities, Built-up space and other common amenities.
  • To provide 'single window' statutory services such as Project approvals, import certification,software valuation and certification of exports for software exporters.
  • To promote development and export of software services through technology assessments,market analyses, market segmentation and marketing support.
  • To train professionals and to encourage design and development in the field of software technology and software engineering.

In 1990, the STPIs were established through three separate autonomous societies at Pune, Bangalore and Bhubaneswar, which were later, merged in June 1991 into a single corporate entity and in quick succession STPIs at Noida, Gandhi Nagar, Hyderabad and Thiruvananthapuram were established. All STPs were equipped with dedicated earth station equipment for providing Data Communication links.

The erstwhile Department of Electronics, Govt. of India with the support of World Bank had carried out a study on the opportunities presented by the Global IT Industry. This study identified the factors, very essential for the growth of the Software Industry and also compared the potential of the countries competing in the Global Market. Some of the factors which needed improvement were clearly identified from the study and STPI focused in improving those factors.

International Communication is one such factor which needed much attention and India was factored -2 as against +8 factored to Ireland. This is one of the primary reasons why STPI took up the responsibility of improving the International Data Communication facilities exclusively for the Software Export Industry. Even though the intention was not to become an International Carrier, but because of the better quality of service provided by STPI and with a high rate of acceptance from the Industry, STPI's International Data Communication Services have grown much beyond anybody's imagination. STPI has truly emerged as an unconventional International carrier within a short span of time and developed relationships with 26 International carrier companies worldwide.

Since 1996, the State Governments' started taking a very proactive role in promoting the IT industry. After the Govt. of Karnataka came out with the first IT policy, many of the State Governments' followed suit. The success of STPI was not limited to the capital cities alone with STPI spreading it wings to secondary cities like Mysore in Karnataka and has, at the last count, spread to as many as 21 cities in a short span of 2 years.

The Growth Booster

The Role of STPI in the growth of the IT industry has been tremendous, especially in the case of start-up SME's.

STP scheme the catalyst

The STP scheme is a 100 percent export oriented scheme for the development and export of computer software, including export of professional services using communication links or physical media. This scheme is unique in its nature as it focuses on one product/sector, i.e. computer software. The scheme integrates the government concept of 100 percent Export Oriented Units (EOUs) and Export Processing Zones (EPZs) and the concept of Science Parks/Technology Parks, as operating elsewhere in the world.

With STPI presence, orderly implementation of STP Scheme and the Govt. initiatives, in general, the offshore software exports from the country during 1991-92, which was mere 20-35% has grown to more than 70% contributing to 73% of National software companies from STPI member companies.

In fact, countries like Mauritius, Sri Lanka, Nepal, Algeria, Indonesia, etc. are taking the help of STPI to set up similar technology parks with the same concept.

The Clustering Effect
Even though, STPI Centres have come-up across the country in as many as 21 locations, the major Industry concentration is at Bangalore, Noida, Chennai, Hyderabad and Pune, reflecting the natural technology clustering effect that has taken place in other technology clusters like Silicon Valley, Boston, Dallas, Ireland, Sweden and Tokyo.

First Phase

In 1991-92, there were very few Indian companies who were doing software exports from India. Those exporting software included few multinational companies like Texas Instruments, Hewlett Packard, and Digital. One could term this as the first phase of the developmental process.

Second Phase

In the second phase of the developmental process, the concept of the "Offshore Development Work" took birth. This second phase of the development, which started in 1993, took India, infact Bangalore in particular, to greater heights by 1998-99.

By the end of March 2001, the Industry has grown to US $ 5.7 billion in software exports with 380 multinational companies establishing base here, the largest concentration of the technology services. All the Global Leaders in Hi-Tech areas like IC Design, Communication Software and System Software have setup a base for their operations in India.

Third Phase

The success of the 2nd phase paved the path for the third phase of development to take place. The third phase of development led to very close and intimate relations with the Silicon Valley start-up companies. In fact, every small Hi-Technology Start-up Company in Silicon Valley valuated at millions of dollars in US market, started establishing their development Centers in Bangalore.

Fourth Phase
During the fourth phase of the development many Indian companies started owning the intellectual property within India and earning the royalty from the global players.

Impact of US Slow Down on Indian Software Industry

STPI has close interactions with the Industry on a day-to-day basis, acting as a single point of contact for any export related information for the Industry. It has been very interesting to watch this Industry's growth during the slow down of the US Economy. The slow down of the US Economy has multinational and variational impacts on MNCs, Home Grown Large Indian companies and SMEs.

While it has been observed that the Large Indian companies have already indicated the slow down in their growth, the multinational companies started recasting their plans after two quarters of the slow down and many of them are now coming forward with expansion plans in India.

The medium sized companies also started getting more and more enquires directly from similar companies in the US. These companies were earlier dependent, largely, on the consultants at their own locations.

There are cost cutting pressures on the companies because of competitive pricing and the customers' demands on the best rates for out-sourcing. It would be very interesting to see what kind of realistic impact that the slow down would have on the Indian Industry. It is definitely bound to would throw up new challenges and new opportunities for the Indian software Industry

Success Barometers

The success or the failure of any Industry can be gauged by three feel-good factors - fortune of the Industry in the capital market, attitude of the Government and the opinion of the customers.

The Indian Software Industry by all accounts rates high on these three counts. The stock market was the first to react to the software and Dot Com revolution, backing the newborn high potential listings. The Govt.'s positive stand vis-à-vis the software industry is significant. The Government's ready acceptance of the requests of the IT Industry, its effort to come-out with an extremely IT friendly budget every successive financial year, the quick passage of the IT bill and its open mindedness in order to create an amicable IT infrastructure are praiseworthy. Some of the key features like reducing duty on software to zero percent, rationalizing other taxations and ESOP related laws and the continuing tax holiday reaffirms the government's positive intent for the IT Industry in general. The dependence that the foreign customers are beginning to show on the strengths of India's software skills, is yet another barometer of the IT segments overall good health.

Indian Software talent is making its presence felt in various countries such as USA, Germany, Austria and Japan. The future plans clearly hover around the seven issues as listed below:-

  • Improving infrastructure and business opportunities by changing the approach from mere policy level to operative one
  • Provide more assistance to SMEs and facilitate incubation
  • Offer better access to finance
  • Improve its marketing initiatives

The policy of STPI is to continuously strive and delight customer through total quality performance of all its services in terms of quality culture, quality cost and quality delivery schedule.

Quality Objectives

  • To strive for the upgradation of the technology to meet customer requirements in ever changing market
  • To upgrade the technology knowledge of all STPI personnel through continuous improvement training
  • To provide state-of-art data communication services as per acceptable international standards
  • To provide comprehensive service including project approvals, import attestation, software export certification etc., in a time bound manner
  • Achieving customer satisfaction through the combined efforts of planning the infrastructure and executing the projects through dedicated workforce.

List of Software Technology Parks of India

  • Software Technology Park of India, Bangalore
  • Software Technology Park of India, Bhubaneswar
  • Software Technology Park of India, Chennai
  • Software Technology Parks of India Electronics Niketan, Delhi
  • Software Technology Park of India, Gandhinagar
  • Software Technology Park of India, Guwahati
  • Software Technology Park of India, Hyderabad
  • Software Technology Park of India, Jaipur
  • Software Technology Park of India, Kanpur
  • Software Technology Park of India, Lucknow
  • Software Technology Park of India, Mangalore
  • Software Technology Park of India, Mohali
  • Software Technology Park of India, Mumbai
  • Software Technology Park of India, Noida
  • Software Technology Park of India, Pune
  • Software Technology Park of India, Simla
  • Software Technology Park of India, Thiruvananthapuram
  • Software Technology Parks of India, Vishakapatnam

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