Geography Reference
In-Depth Information
in many other aspects the fast-growing industries of India have some
similar features to the case of China. First, most of the trade of the Indian
and Chinese economies is still in the form of re-exports of finished or
semi-finished products or services produced by MNEs which are based
in Europe or the US. Second, many of the key growth centres are domi-
nated by links with multinational companies and are often critical nodes
in GPNs. In the Indian IT industry, highly concentrated in the Bangalore
region, two-thirds of all sales are accounted for by foreign owned MNE
affiliates located there (Scheve and Slaughter 2007). Third, as India under-
goes continuing regional economic restructuring, firms located in the
regions with large home markets earn higher profits (Kambhampati and
McCann 2007). This implies that, in terms of economic geography, the
large home market effects associated with agglomeration are driving the
internal economic growth and restructuring of the Indian economy.
On the other hand, abundant highly trained and cheap human capital,
the existence of some public research centres of excellence with interna-
tional reputation, and the accumulation of sufficient technological capa-
bilities, have attracted to India the location of MNE R&D laboratories
and software development centres. Most of these foreign investments have
been highly concentrated in space, targeting the regions endowed with the
highest technological capabilities and knowledge resources in the vicinity
of the centres of excellence (Lall et al. 2003, 2004). Moreover, MNEs have
also established collaborations and research contracts with some of India's
public R&D institutions such as the National Chemical Laboratory in
Pune, the Indian Institute of Chemical Technology in Hyderabad, and the
Indian Institute of Science in Bangalore, thereby tapping into the local
innovative capabilities and knowledge assets, benefiting at the same time
by cheaper costs as compared to the technological centres of excellence
of the developed world (Kumar 1996, 1999, 2001). The critical impact
of ICT multinational investment on Indian economic development, and
its uneven distribution across space within the national boundaries, have
been highlighted by a number of studies looking at the rise and evolution
of regional cores and clusters located either in medium-sized cities, such
as Bangalore, Hyderabad, Chennai and Pune, or within the metropoli-
tan regions of large global cities such as Mumbai and New Delhi (Arora
and Athreye 2002; Athreye 2003, 2004; Athreye and Srinivasan 2005;
Ramachandran and Ray 2005).
As with the case of China, ongoing economic growth in India is also
expected to be associated with newly-emerging cities and regions (MGI
2010b). This should lead to somewhat lower levels of spatial concentra-
tion over the coming decades, although to a lesser extent than is the
case with China (MGI 2010b). This should also lead to a rethinking of
