diffusion of skills and improved education in its economy and a significant proportion of its culture.

The results of this transformation are impressive. Technological progress in agriculture has enabled India to better feed a vast and growing population, which is currently estimated at 960 million. Nuclear research and deployment has delivered power and been applied to health and agricultural activities. India is emerging as a major center for software development and information technology products. Increasingly, global technology companies are tapping the talents of flexible, highly-skilled Indian engineers and technicians.

India has carved a strong reputation for itself in developing technology for global applications. Currently it ranks as the world's second-largest exporter of software products and is an acknowledged global leader in systems development and maintenance services. India's vast pool of educated labor includes 3.5 million science and technology graduates, who are highly-skilled, flexible and hard-working individuals.

In recent years, the Indian government has encouraged investment in the information technology sector through tax concessions and incentives. Some of the most significant of those incentives include: exempting revenue from software exports from the income tax, exempting software products and services from the sales tax and supplying land, and making water and power available at discounted rates.

Tax concessions also exist for private and foreign investors specializing in research and development. For example, India has implemented a "rupee for rupee" incentive. If a private investor invests in a research and development project in one of India's laboratories or agricultural research institutes or universities, the Finance Ministry provides a rupee for every rupee earned by the institution. Private investors can therefore negotiate favorable terms for such projects.

Venture capital increasingly is being utilized in India due primarily to the government's 1992 decision to remove restrictions on the pricing of Initial Public Offerings (IPOs). This increased the potential that venture capitalists would make a decent profit when the time came for them to execute an exit strategy. This increased venture activity has had a demonstrable effect on start-up firms in India, particularly in areas of strength like software.

Bangalore, the capital of Karnataka state in southern India, is synonymous with the country's identity as an emerging high-tech powerhouse. Hundreds of high-tech companies, ranging from family-owned start-ups to multinationals like IBM, Intel, Motorola and Hitachi, operate in Bangalore. This past June, the Karnataka state government developed a new information technology policy which includes a number of fiscal and educational initiatives aimed at supporting the information technology sector. In the first package of its kind announced by an Indian state, Karnataka unveiled a variety of tax exemptions, some for as long as 10 years, for information technology companies choosing to develop a lasting presence in the state. It also abolished the electricity tax on captive power-generation units (a move aimed at relieving the stress on Bangalore's infrastructure which is buckling under the weight of increased demand).

Bangalore has also been a pioneer in developing technology parks. The city's Electronic City Software Technology Park was built in the early 1980s and is now home to more than 100 companies. The Electronic City will be joined later this year by India's most ambitious and internationally oriented industrial area to date, the $470 million International Technology Park (ITP). The ITP is a joint venture between India's giant Tata Group (40%), a Singapore government-backed group of six companies (40%) and the Karnataka state government (20%).

The establishment of technology parks has proven effective for bolstering India's high-technology industries. The main thrust of the parks built so far has been to provide an infrastructure for companies engaged in export-oriented software and hardware development. Current initiatives such as the new park in Bangalore are a significant factor in maintaining India's strong position in the global information technology industry.

The ITP is considered a departure from traditional science parks for a number of reasons. The involvement of Singaporean backers brings excellent infrastructure expertise, while the large budget ($470 million) has allowed the enterprise to offer virtually unmatched services in such crucial areas as telecommunications, sewage treatment and electricity supply supported by an on site power plant. Schools, shops and residential units are also included. The park is viewed as Singapore's gateway investment to India and tenants confirm that the Singapore link is important for them. Businesses operating in the park expect access to highly skilled resources and excellent infrastructure, as proven in other industrial parks managed by Singaporean agencies.

Similar to other regions, India has built its success on a business climate responsive to technology-intensive operations. Complementing that business climate is a focus on collaborative capacity and attraction of anchor investments. These actions have provided India the ability to overcome physical and cultural barriers and become a world technology leader.