Higher Education Response to India’s IT Boom: Did State Governments Play a Role?

The contribution of information technology (IT) to India’s GDP increased from 1.2 per cent in 1997 to 9.3 per cent in 2015. A notable characteristic of this phenomenon is that the majority of the growth in this sector is driven by exports. Currently, more than 80 per cent of IT output is exported. This sector is thus very vulnerable to demand shocks in the world economy. Also, unlike the export of most goods, the export of IT services relies exclusively on the Internet, the expansion of which in the 1990s is a relatively recent phenomenon. The combination of worldwide rapid Internet growth along with rising demand for computing skills created an unprecedented demand for Indian IT services: from 1998, IT exports and employment doubled in a span of just two years.