Innovation through Long-distance Conversations? Lessons from Offshoring-based Software Clusters in Bangalore

This paper is aganist the popular assertion regarding the links between innovation and clustering and it is found that the main sources of knowledge transfer and innovation among key firms in Bangalore’s software cluster are their external linkages outside the cluster rather than face-to-face interactions between firms within the cluster. Moreover, the rich pool of skilled labor, made available through clustering has played an important role in facilitating learning, that is, diffusing the knowledge brought in by foreign networks.