Software and globalization provide both opportunities and challenges to developing
countries. Whether these opportunities are successfully utilized depends upon the
availability of infrastructure and educational skills, a conclusion arrived at by
many development debates over the past few decades. We will consider the impact of
the software industry on development, drawing on the case of India. We show that in
India, a number of factors have come together to contribute to the success of this
industry, in spite of relatively poor infrastructure and education levels. In this
case, however, the inadequacy of infrastructure and education have manifested
themselves in an uneven spread of the benefits of this industry, leading to
enclave-type development in urban centres in the southern and western parts of the
country. While this is improving, the government has to take an active role to
ensure a more even spread of the benefits accruing from this industry.