State Promoted Technology Consortia In I

State Promoted Technology Consortia In India: Internal and External Factors Influencing
the Realization Of Initial Objectives
S Raghunath

Joseph Shields
Indian Institute of Management, India

Abstract
The factors, which influence the functioning of state, promoted technology consortia are studied here. Two cases, one a
technology development consortium and the other a technology deployment consortium were studied in this research.
Both the internal and external factors were taken into account to understand the performance of the consortia. While in
both the cases the non-participatory, but facilitating role of the state helped the consortia getting established and achieves
its initial objectives smoothly. From the point of view of internal organization, corporate governance through
establishment of independent corporate entities wherein the workforce was independent of functional loyalties to any of
the consortium participants helped immensely in the success of the consortia. In both the cases, market attractiveness
played a vital role of the consortium success. Among the external factors, availability of alternatives and the lack of
competitive positioning of the impeded the growth of the technology deployment consortium studied. Participation of the
technology users as stakeholders in the consortium aided the success of the technology development consortium. The user
base was also small and formed part of the consortium. It was however not the case with the technology deployment
consortium where the technology users were outside the consortium. The user base was quite large and had no stakes in
the consortium. This resulted in the success of the technology deployment consortium not being as high as what was

initially expected. The participation of the state in competing ventures also impeded the speedy realization of initial
objectives in the case of the technology deployment consortium.

Introduction
State promoted technology consortia have been instrumental in enhancing national competitive advantages of
various countries. Researchers [26], [29], [16], [10] have observed that technology consortia have been formed with
various goals ranging from funding of basic R&D, technology and market coordination, overcoming technological
discontinuities, funding risky ventures, standardization of technology and products, byproduct utilization,
management training, competence building to improve national competitive advantage etc.
Worldwide, various consortia were established with government support and participation. SEMATECH,
established in 1987 to develop semiconductor production technology with a US$ 1.7 billion budget as of 1996 had
half of its funding from the government. The European Strategic Programme for Research and Development of
Information Technology (ESPRIT), the EUREKA, the Japanese Fifth Generation Computer Project etc., are just a
few more examples of state promoted technology consortia. In a recent study of over 200 consortia in Japan [23] it
was found that governmental support is declining in technology consortia and the benefits expected now from
governments are more of an intangible nature. It was also found that even the motivations for the formation of such
consortia and expectations from the non-government partners are different now compared to what they were in the
earlier cases. While the experiences of Sematech, Eureka, the semiconductor industry consortia in US, Japan and
Taiwan were well researched [15], [5], [9], [27] the technology consortia in India with state participation are yet to
be studied in detail.

Research Objective
While studying collaborative ventures, researchers [11], [2], [13], have defined unsuccessful collaborative
relationships as those with less longevity or stability. However, exceptions to this school of thought have been the
researches which looked at such relationships more from the point of view of achieving the initial objectives [19],
[7], [22]. The authors subscribe to the latter worldview on inter-firm relationship success. The present paper is an

effort to study the dynamics of Indian technology consortia with state participation and from the point of view of the
determinants of success.
The following research questions were addressed:
1. What are the motivations for the formation of state promoted technology consortia in India
2. What are the internal and external factors that effect the realization of these objectives

Methodology
Technology consortia typically cover a range of emerging technologies including Information Technology,
Biotechnology, Pharmaceutical, Telecom and Speciality Chemicals. These consortia represent a new organizational
form and they pose management challenges. This study is based on case studies of consortia with private sector
participation with a degree of government involvement. Government can have a significant influence on the
formation of consortia including input on the type of participants who will be involved and the directions the
consequent results will take [23]. The consortia selected for case studies are based on the criteria that the projects

and the output of the consortia involve cooperation among private sector firms. In other words, consortia which
involved primarily government participation and those in which the government agency simply allocated tasks
without the initiative of the private sector were excluded. The cases considered were the International Technology
Park Ltd., Bangalore in the Information Technology industry and the Biotech Consortium India Ltd., Delhi in the
Biotechnology industry. These case studies include cooperative projects sponsored by the Department of
Biotechnology, Government of India and the Government of Karnataka (through the Karnataka Industrial Areas
Development Board – KIADB).
At the outset, the target population of case leads considered for the study was the following.
1) Technology Development Consortia
a. Biotech Consortium of India Ltd., New Delhi (Biotechnology industry)
b. Non-ferrous Materials Technology Development Center, Hyderabad (Defence Sector)
c. Custom Molecules Pvt Ltd., Hyderabad (Pharmaceutical Industry)
2) Technology Deployment Consortia
a. International Technology Park Ltd., Bangalore (Information Technology Industry)
3) Marketing Consortia
a. VSNL-MTNL-TCIL consortium (Telecom Industry)
As the VSNL-MTNL-TCIL consortium was more of a marketing entity between three state owned firms
and no private sector participation, it was not considered for the purpose of the study as a technology consortium.
Custom Molecules Pvt. Ltd., a newly formed consortium between the Bulk Drug Manufacturers Association, the
Government of Andhra Pradesh and 8 SMEs was also not considered for the study as it is a relatively new entity and

it may not be possible to understand as of now whether or not the initial objectives are met. The Non-ferrous
Materials Technology Development Center, a consortium between the Defence Metallurgical Research Laboratory
and four state-owned firms in the mining and metals business was also dropped from the study due to strategic
reasons as it addresses the defense sector.
Eventually two consortia were chosen for the study, the BCIL, which is a Technology Development
Consortium, and the ITPL, which is a Technology Deployment Consortium.

Limitations of the Study
Data was collected from each department and government board through direct contacts after examining information
available over the Internet put out by the government agencies and other press publications. The consortia and their
activities were documented through personal contact with those officials involved in the formation and
administration of the consortia. The data set for the paper is not a comprehensive representation of the perspective of
all the stakeholders of the consortia as access, to the government officials involved in structuring and managing
projects in the consortia, was difficult and obtaining appointments for interviews from private sector partners in the

consortia was not an easy task given the busy schedule of these senior managers. Eventually, data was collected
through a combination of face-to-face interviews and telephonic question and answer sessions.
Both the consortia considered here viz., the ITPL and the BCIL were not predominantly state funded and
therefore the government did not have a majority stake in the consortia. Thus, the findings of this research may not
be generalizable for consortia with predominant state funding. Both the consortia, which form the focus of this

study, are separate legal entities. Thus, the findings may not necessarily apply to consortia formed without a separate
legal identity being incorporated.

Use of Technology Consortia
The need to leverage scarce scientific and technical talent, and the desire to share the risks associated with
technology generation and commercialization drives firms to band together in cooperative activities. Technology
activities are complex and hence call for reducing the risks for firms involved in either developing or deploying
them. Such activities are characterized by uncertainty, indivisibility and inappropriability [14]. The uncertainty
associated with new technology development and deployment makes it difficult for firms to understand or predict
the possible outcomes of associating with the technology. The indivisibility of the technology calls for firms to share
their resources and knowledge, in order to collectively deal with the various interlinked elements of the technology.
The difficulties associated with appropriating technology calls for firms to partner for transferring the knowledge to
the right users at the right time. The knowledge involved in transferring the technology is very critical here. Time
and again governments have participated in facilitating such multi-lateral partnerships between firms either for
Technology Development or for Technology Deployment. Such efforts have lead to the formation of consortia.
Consortia are considered to be intermediate governance forms between markets and hierarchies [30], [13].
Consortia can be distinguished from other interorganizational forms such as joint ventures, technology licensing,
subcontracting etc., along the following parameters:
They typically involve multifirm rather than dyadic interfirm cooperation
They usually involve horizontal collaboration among direct competitors

Technology consortia thus constitute a subset of organizational forms involving formal interfirm
cooperation among potential competitors from the same industry [6] and most of the collaboration is in the
precompetitive stages [14]. However, with the pressure on time to market increasing and also the product
development cycles being compressed into the product marketing activities, the very nature of the consortia is also
changing with the line between pre-competitive and competitive stages slowly getting effaced.
In a comparative study between R&D consortia in US and Japan, it was found [1] that internal diversity and
interorganizational relations in consortia have an impact on information exchange and governance mechanisms.
Thus the diversity among participating firms and the nature of relationships they engage into would have
implications on the success or failure of a consortium and also the governance costs that influence such a success or
failure.

Factors Effecting Consortium Performance
Since consortia are often composed of companies that seek mutual benefits but remain competitors otherwise, they
are composed of personnel from radically different corporate cultures, shareholders with different managerial
priorities, policies and procedures. As a result, managing consortia poses a major challenge. There are a variety of
possibilities in terms of the organizational structure, technological emphasis, funding mechanisms and personnel
make-ups possible in consortia. These choices are a fall out of the mechanisms in place to avoid failure of the
consortia and also in order to achieve the initial objectives set forth. The geographic shift, person-to-person, groupto-group and organization-to-organization interactions influence the ease of governance of a consortium and also the
benefits accrued to the participant firms.
The performance of technology consortia has thus been found to be effected by a host of internal

governance issues of the consortium like structure, culture, goal congruence between the partners, information

processing, equivocality of objectives, organizational processes relating to recruiting personnel, obtaining resources,
decision making, evaluation of outputs, bureaucracy, retention of members etc., and external issues like culture of
the country, institutional environment, legal issues, distance between the partnering firms, competitive positioning of
the consortium etc [24], [6], [12], [17], [3]. Researchers [17] have found that all these governance issues lead to an
increase in the transaction costs, which have been found to be the key determinants of the success or failure of
consortia. They have also found that the effect of power dependence is much less compared to the effect of
transaction costs.
Apart from incongruity of goals, bureaucracy and cultural factors, many technology consortia were found
to be failures on account of the improper split of activities across various participating firms [28]. Closely related to
this is the level of importance each of the partners attach to the technology being dealt with. Typically in consortia
dealing with technology transfer, the willingness of the recipient to receive the technology as well as the willingness
of the owner to transfer the technology are critical for the success of the consortium [20]. Recipients of the
technology can be outside the consortium also. These are the end users in the marketplace. The market conditions
and the utility value the end users attach to the technology as a tool or a product in the marketplace becomes critical
here.
The nature and internal alignment of the relationship between the participating firms signified by the degree
of procedurality, competitiveness or collegiality, involvement or distance, individualism or supportiveness, apart
from the stress in the relationship determines the success of consortia [31]. Apart from this, the perception of the

participating firms about the consortia also matters much in the performance of the consortium. Often firms view
consortia as forced cooperative ventures [3]. This attitude of indifference could lead to opportunism and thus erode
the benefits of a consortium. Several organizational mechanisms like individual structures and central controls are
employed in order to overcome this problem in consortia. The importance attached to the consortium by the
individual firms, the resulting involvement by each of these firms in the consortium, as well as the alternatives
available would determine the success of the relationship [17].
On the relationship front, consortia performance has also been found to be closely coupled with the
tightness of the individual level relationships between the decision makers of the consortia and the proponents of the
consortia [18]. Thus more than the organizational-level networks, the individual level networks also play a vital role
in the effective functioning and success of the consortia. The value addition each partner brings on account of their
network ties with participating members, also determines the success of a consortium [17], [8], [4], [21]. Such ties
would prevent the participating firms from indulging in opportunistic behavior. The ties that firms have outside the
network could add additional value to the relationship as this could help commercially sustain the technological
efforts of the consortium.
The functional loyalty [3] of the staff to their parent companies plays a vital role in their allegiance to the
consortium and thus has a positive or detrimental effect on the results gained. Staffing is a key problem in consortia.
The staff could be directly hired for the new entity floated or they could be deputed from the individual firms
partnering in the consortium. Researchers have also found that the attitudes and expectations of the direct hires and
deputed employees of the shareholders are different and the effects of these are reflected in the performance of the
consortium [25].

In summary the factors, which influence the performance of consortia both internal and external to the
consortia, are listed below:

Table 1:INTERNAL AND EXTERNAL FACTORS INFLUENCING STATE-PROMOTED TECHNOLOGY
CONSORTIUM PERFORMANCE

External Factors
Internal Factors
Contribution of the State
Contribution of the State
Cultural distance between firms
Struggle for control between participating firms
Geographical distance between firms
Network ties between participating firms
Distance from commercialization space
Opportunism on account of the perception that the
Equivocality
consortium is a temporary arrangement
Motivation to keep the consortium operational
Management Structure

Willingness of end recipient
Culture
Market conditions
Goal congruence
Importance of the consortia in the market place
Split of operations
Involvement of the end users
Functional loyalty of the staff
Network ties outside the consortia
Willingness to transfer technology
Alternatives available to the participants
Willingness to receive technology
Pre-competitive Vs. cooperative nature of the
Approach towards the relationship
association
– functionalist Vs. culturalist
Knowledge ownership
Cohesion in the unit
Newness of technology
Work coordination

Resource constraints
Feedback motivation
Competitive positioning of the consortium
Job involvement of the partners
Autonomy of the entity
Stress on the consortium
Lost opportunity
Inefficiencies on account of improper functionality
These factors could however be different for technology development consortia and technology deployment
consortia. Not all of these factors could be relevant for both types of consortia. The following sections would chart
the evolution and functioning of one case each of the technology development consortia and technology deployment
consortia and bring out the distinctions between the internal and external factors that effect the performance of the
same.

Case of a Technology Development Consortium: Biotech Consortium India Ltd., Delhi
This consortium was started in 1990 at the initiative of the Department of Biotechnology of the Government of
India, with a core capital of US$ 1.2 m. A major part of the initial investment came in from five Indian Financial
Institutions viz., IDBI, ICICI, IFCI, UTI and RCTC. Apart from this a host of companies from the corporate sector
viz, Ranbaxy Laboratories, Glaxo India, Cadila Laboratories, Lupin Laboratories, Kothari Sugars and Chemicals,
Rallis India, SPIC, Madras Refineries, Zuari Agro, EID Parry, ACC and Excel Industries joined the consortium,
with some investments from their side.
In the biotechnology industry, as realization of technological initiatives into commercial ventures could not
take place in the absence of adequate scale up, the Department of Biotechnology felt the need to set up BCIL to
undertake a continuous exercise to screen these technologies, interface between technology sources and technology
seekers, assist in technology sourcing, marketing tie-ups and identification of joint venture partners.
The consortium was set up with the following objectives:
Providing the linkages to facilitate accelerated commercialization of biotechnology
Technology development
Technology transfer
Project consultancy
Fund syndication
Information dissemination

Manpower training and placement
The technology commercialization process was facilitated by the following:
Financing scale up from lab scale to pilot plant demonstration unit
Packaging to enable entrepreneurs/industry and financial institutions to assess the commercial
potential
Industrial tie-up for scaling up from pilot plant to commercial level
Patenting of technology
Role of the State

The consortium was first initiated by the State through the Department of Biotechnology. There was however no
funding from the state. The State consciously refrained from having its personnel in the workforce of the company.
However, the Secretary of the Department of Biotechnology and the heads of the CSIR and ICAR, two state run
R&D councils are Directors on the board of the company. The Directors add value by bringing in the linkages from
the basic R&D labs in the country. The state through the Department of Biotechnology also helps in developing
specifications for the technology and standardizing the technology. The conscious step taken by the state to refrain
from any management control over the consortium has enabled the consortium record good performance leveraging
the flexibility that was built into the system.
Role of Other Stakeholders

The firms, which are part of the consortium, help in gauging the technology trends and also in taking the
consultancy and technology development services of BCIL. They play the role of a captive market and also that of
designers and drivers of the technology being incubated in the labs. Apart from this they also act as technology
transfer channels for the company.
The financial institutions have their presence in the company more as equity holders as they had brought in
the initial investment.
Market Attractiveness

All the firms in the consortium apart from the financial institutions are users of the technology and help BCIL
incubate and commercialize those specific technologies, which they intend to transfer to the marketplace for being
used by the end customers. The presence of a captive market and also the involvement of the recipients of
technology as partners in technology development and commercialization has resulted in BCIL catering to a highly
attractive market.
Governance Structure and Staffing

The consortium is being operated as a separate legal entity and was incorporated as a separate company according to
the Indian law. This gives the consortium a high degree of flexibility in its operations and also having direct hiring
for its employees. As a result it does not possess any conflict of interests between its goals and those of its
employees, as these employees do not have any affiliations with the partnering firms. This has been a critical
success factor of the consortium.
Network Ties of the Parties

The state leverages on its network with the other R&D labs in the country to bring in value in the basic research,
thus adding quality to the work being done at BCIL. The participating firms add value to the consortium by
leveraging on the network relationships they have with their end users and business partners to commercialize the
technology being incubated at in the consortium.

In summary the following table captures the major factors, which enabled BCIL to be a high performing state
promoted technology consortium.
Performance of the Consortium

The facilities are currently benefiting over 120 clients, scientists, technologists, research institutions, universities,
first generation entrepreneurs, the corporate sector, government, banks and financial institutions. The company has
successfully commercialized and licensed out a host of indigenous technologies in the areas of biopesticides, neem
pesticides, bacterial biofertilizers, Microbial aerobic fermentation, Lactic acid and derivatives etc., and a host of
international technologies like spirulina production, extraction of papain from papaya, b-carotene production etc.
Apart from these, blue green algae, bacterial biofertilizers, HIV detection kits and Pearl culture are some of the
technologies in the process of commercialization.
The consortium was a recent recipient of the National Award for the Best Efforts in Commercialization and
has been recording profits over the years. Apart from the initial investment, there has been no further funding for the
consortium and the revenues are being generated purely through their own activities.
Table 2: INTERNAL AND EXTERNAL FACTORS INFLUENCING PERFORMANCE OF BCIL

External Factors
Contribution of the State - by interfacing with the
basic R&D institutes of the country
Distance from commercialization space – the
partners were also the users of the technology
Equivocality – there was a clarity of purpose as all
the partners joined on account of a need to speed up
commercialization
Motivation to keep the consortium operational
Willingness of end recipient
Market conditions – attractive as the partners
themselves were using the technology
Leveraging personal relationships - high
Importance of the consortia in the market place
Involvement of the end users
Network ties outside the consortia – high
contribution both by the state and the partnering
firms
Alternatives available to the participants - low
Pre-competitive Vs. cooperative nature of the
association – the focus was clearly on the
precompetitve phase
Knowledge ownership – rested with BCIL
Newness of technology - high
Resource constraints – high
Competitive positioning of the consortium - high
Autonomy of the entity – extremely high

Internal Factors
Struggle for control between participating firms –
there was no struggle for power as BCIL has been
incorporated as a separate legal entity with no
majority shareholding for any company
Network ties between participating firms – high
Opportunism on account of the perception that the
consortium is a temporary arrangement - low
Management Structure - independent
Goal congruence - high
Split of operations – there was no split all rested
with BCIL
Functional loyalty of the staff – high as they were
all employees of BCIL
Willingness to transfer technology - high
Willingness to receive technology - high
Approach towards the relationship
– functionalist
Cohesion in the unit - high
Work coordination - high
Feedback motivation - high
Job involvement of the partners - high

Case of A Technology Deployment Consortium: International Technology Park Ltd.,
Bangalore
The city of Bangalore in South India has come to be known as the Silicon Valley of India. It has over 900 IT
companies contributing a major chunk to the US$ 1.58b software exports from India. Over the years 1999-2000
Bangalore has experienced an exponential growth of 73% in its software export revenues and has reached a business
of US$ 16.6m. One of the major infrastructural requirement for IT companies in India is the technology in terms of
uninterrupted power supply and high speed communication backbone to their clients in US in order to have a 24
hour interface and make effective use of the differentials in time zones. With the latest advances in broadband and
Internet technologies it was felt that there was a need to make these technologies available at a pool for IT
companies in Bangalore. Also the power supply fluctuations called for establishing power generation units to cater
to multiple users under the same roof at lower prices.
The Information Technology Park Limited was set up with an initial outlay of US$ 1.2m to provide
efficient & reliable infrastructural services offering a dynamic business platform of international standards to the IT
companies based in Bangalore. It was conjured by the best brains and corporate enterprises from both India and
Singapore, who are experts in the formation and management of high-tech business superstructures. The consortium
was formed between The Tata Industries Ltd., the investment arm of the Tata Group one of India's largest
conglomerates with more than 80 companies in diverse businesses, the Singapore Consortium, a consortium of
Singapore companies, led by Ascendas Land International Pte. Ltd., associated with successful industrial and
science parks in Singapore, China and other Far East nations and the Karnataka Industrial Areas Development Board
(KIADB), a statutory body of the Government of Karnataka, India.
The International Tech Park, Bangalore was set up to provide a one-stop solution to multinationals and
other conglomerates for conducting high-tech and knowledge-base business in India in an environment based on the
integrated concept of work, live and play. High quality professionally-managed services apart from state of the art
communication facilities like video conferencing, high speed data transfer links, uninterrupted power supply etc.,
were provided at the park.
The Park already houses corporate majors operating in a wide range of businesses, such as information
technology, biotechnology, electronics, telecom, R&D, financial services, and other IT-related services.
With the commissioning of Stage 2, the park is gearing up for extending its commitment to the new occupants.
The fully occupied Phase 1 of the Park stands on a 27 hectares (68 acres) plot in Whitefield, Bangalore.
Whitefield is located 12 kms from Bangalore airport and 18 kms from the city. The ready-built facilities;
infrastructure like power, water, telecommunication and satellite connectivity as well as other value added services
offer companies a quick start up - a distinct advantage over others who have to start from scratch and put in heavy
upfront investment. The first phase of the project comprises three buildings - Discoverer, Innovator and Creator,
totaling close to 1.2 million square feet of built up office, production and retail space. A 51-unit residential tower,
situated in the Park, also enjoys the facilities of the Park like power, water and recreation.
Electricity being a major constraint in Bangalore. ITPL as its own 9 MW (3x3) Dedicated Power Plant.
This is synchronized with the 220 KV grid of the Karnataka Power Transmission Corporation Limited. The
synchronized power is redistributed to the clients thereby ensuring reliable and clean power supply 24 hours a day.
ITPL is the only such establishment in Karnataka to receive power from the Utility Board (KPTCL) at the highest
voltage level i.e. at 220,000 volts. The power supply at 220 kV ensures that is far more dependable than what is
available at lower voltage levels to other consumers in the State (11 kV for e.g.) The supply to the Park is through
two such 220 kV lines from two different substations of KPTCL thus ensuring 100% redundancy.
As most of the firms operating in ITPL are information technology firms, the park had established an
dedicated high speed internet access link. A Videsh Sanchar Nigam Limited (VSNL) Earth Station featuring a very
high bandwidth provides direct connectivity with destinations across the world for high-speed data transfer. The 13m wide satellite dish supports high-bandwidth requirement in multiples of 2 mbps for superior quality data
transmission. It comes with optional benefits for Internet and Video Conferencing. The connectivity has an
efficiency of 99.99%. The Park provides leased lines from 64 Kbps to 2 Mbps.

Role of the State

The participation of the state in the consortium was through a statutory body called the KIADB. The objective of the
state in participating in the venture was to help in the overall industrial growth of Karnataka and also to generate
employment. Since it was expected that most of the companies occupying the park would be from the IT industry,
the state expected to have Bangalore on the IT map of the world by providing high quality infrastructure, which
could attract the best companies in the world to Bangalore. The state helped in procuring the land and the necessary
clearances.
Role of Other Stakeholders

The Tatas were instrumental in bringing in the investment and the Singapore consortium with its vast expertise in
building similar technology parks enabled to develop the park as a good international destination by bringing in its
technical expertise and apart from the investment. The Tatas also leveraged on their relationship with the
government and helped the Singaporeans cope with the cultural aspects of managing the consortium and its dealings
with the external interfaces.
Market Attractiveness

As mentioned earlier, the market for software exports has been quite attractive and Bangalore as a destination for IT
companies had also been an attractive proposition. India has a great advantage in the IT world map as it has a good
low-cost high-quality manpower, and is the second largest English speaking manpower resource to the world. The
IPR laws in the country are also quite attractive.
Governance Structure & Staffing

As the state helped in procuring the land and the necessary clearances and in return was given a 20% equity in the
consortium. The rest of the partners the Tatas and the Singapore Consortium were given a 40% state each. Each of
the partners have a proportionate representation in the board. The ITPL was incorporated as a separate corporate
entity under the Indian law and has employed its one sole employees. The park is currently headed by a CEO from
Singapore. The government refrained to depute its employees as staff of the ITPL. It was agreed that the Chairman
of the consortia would be a nominee of the Tata group and the CEO would be a nominee of the Singapore
consortium. Initially some personnel were deputed at the senior level from both the parties in order to establish the
consortium. There was however no such participation from the state.
Network Ties of the Parties
The government was able to leverage its linkages by getting the necessary clearances and also procuring the land.
Performance of the Consortium

The consortium is considered to be moderately successful as it was not at the pace, which was expected. Plans are
however afoot for the phase-II. The schemes offered by the STPI (Software Technology Parks of India), an autonomous
association floated to promote the software industry, were taken as a better proposition by many firms due to the tax and import
duty concessions and the flexibility in location. As a result large corporates set up their own technology parks closer to the city of
Bangalore than ITPL and still enjoying the same infrastructural facilities built by them as those existing at ITPL. It was the
smaller firms, which could not afford their own infrastructure in communication, and power that opted for ITPL. However, as the
STPI also set up cost effective large technology parks in the Electronics City promoted by the Government of Karnataka, some of
the smaller IT companies found attractive to occupy those office spaces due to proximity to the city of Bangalore and availability
of cost effective space.
The factors influencing the performance of the consortium are summarized below:

Table 3: INTERNAL AND EXTERNAL FACTORS INFLUENCING PERFORMANCE OF ITPL

External Factors
Contribution of the State - by interfacing with the
government for clearances
Distance from commercialization space – high
Market conditions – attractive
Importance of the consortia in the market place –
not very high as there were other alternative
sources
Network ties outside the consortia – high
contribution both by the state
Nature of technology – investment intensive
Competitive positioning of the consortium - low
Autonomy of the entity – moderately high

Internal Factors
Struggle for control between participating firms –
there was no struggle for power as ITPL has been
incorporated as a separate legal entity with no
majority shareholding for any company
Management Structure – independent. However it
was agreed that the Chairman would be from the
Tata group and the CEO would be from the
Singapore consortium.
Split of operations – there was no split all rested
with ITPL
Functional loyalty of the staff – high as they were
all employees of ITPL

Summary of Findings
The following grid depicts the critical success factors and the detrimental factors both internal and external for the
technology development and the technology deployment consortia. The role of the government, which enables the
consortia to reach a level of success, is also listed.
Table 4: CRITICAL SUCCESS AND IMPEDING FACTORS INFLUENCING PERFORMANCE OF STATE PROMOTED
TECHNOLOGY CONSORTIA

TECHNOLOGY
DEVELOPMENT CONSORTIUM

TECHNOLOGY DEPLOYMENT
CONSORTIUM

Success Factors:
Participation of the
technology users in
the consortium
Attractiveness of the
market
Usage of network
ties by the partners
Involvement of
almost all the
technology users as
stakeholders
Success Factors:
Attractiveness of the
market
Impediments:
Lack of competitive
positioning
Availability of
alternatives outside
the consortium to
technology users
Participation of the
state in similar

Success Factors:
Facilitating, nonparticipatory role of
the government
Structuring as a
separate legal entity
independent of the
government
Independent
workforce

Success Factors:
Facilitating, nonparticipatory role of
the government
Structuring as a
separate legal entity
independent of the
government
Independent
workforce

-

competing ventures
Large number of
technology users
and the inability to
incorporate them as
stakeholders

EXTERNAL FACTORS

INTERNAL FACTORS

While in both the cases the non-participatory, facilitating role of the state helped the consortia getting
established. From the point of view of the internal organization of the consortium, corporate governance through the
establishment of independent corporate entities where the workforce was independent of any functional loyalties to
any of the participating firms helped immensely in the success of the consortia. While involving the technology
users as stakeholders helped the technology development consortium, such a possibility could not be experienced in
the technology development consortium. Moreover, the number of technology users who could be involved as
stakeholders was high in the case of the technology development consortia compared to the technology deployment
consortia, where the technology users were much more higher and could not be incorporated into the consortium as
stakeholders. Among the external factors, participation of the technology users helped in making the technology
development consortium as stakeholders a success. In both the cases, market attractiveness played a vital role in the
success. However, the availability of alternatives and the lack of competitive positioning of the consortium impeded
the growth of the technology deployment consortium. The participation of the state in competing ventures also
contributed to the slower growth of the technology deployment consortia compared to what was initially expected.

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