Cluster diversification: A study of innovation processes in the Bangalore IT cluster

Regitse Leleur

Student thesis: Master thesis


Based on a debate about the sustainability of a cluster model of mainly low-value IT services and the potential for high-value IT activities in Bangalore, this thesis explores how the Bangalore IT cluster can diversify into high-value IT activities. To operationalize this study of cluster diversification on the case of Bangalore, the ideas of Etzkowitz (2002a; 2002b; 2003) are applied to 1) formulate the term „research ecosystem‟ to propose a way for the Bangalore IT cluster to diversify into high-value IT activities by making innovation occur in a collaborative environment of firms and knowledge-producing institutions from both the private and public sphere and 2) specify a framework – the triple helix model (THM) (Etzkowitz 2002b) – to structure an analysis of the institutional spheres of government, academia, and industry in Bangalore. Drawing upon relevant aspects from the cluster literature and using Etzkowitz‟s (2002b) THM as a framework, the thesis systematically explores the emergence of a research ecosystem in Bangalore to facilitate a diversification into high-value IT activities. To account for the global dimension of the Bangalore IT cluster, the THM is extended using Morosini (2004). The analysis illustrates areas to address by government, universities, and the IT industry at the regional level to spur the development of a research ecosystem in Bangalore. The analytical findings can thus be seen to constitute proposed actions for the three institutional spheres. These are:  Geographical diversification by the Bangalore IT industry into the domestic market to enhance learning through proximity to end-users.  Infrastructure improvements to spur the flow of people and information in the cluster.  Creation of more specialized research education such as PhDs to create the human capital required for high-value IT activities in Bangalore.  Further incorporation of entrepreneurship programs into the curriculum at engineering schools to bring academic knowledge into society.  Promotion of state-IT industry linkages and specification of innovation goals in Karnataka‟s export promotion policy by Karnataka state government.  Provision of public venture capital to academic start-ups and other start-ups to address the still underdeveloped private market for venture capital.  Construction of an adequate framework for academic spin-offs based on an analysis of the current shortcomings by government authorities and Bangalore universities.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2009
Number of pages104