Software Technology Parks of India was established and registered as an Autonomous Society under the Societies Registration Act 1860, under the Ministry of Electronics & Information Technology, Government of India on 5th June 1991 with an objective to implement STP Scheme, set up and manage infrastructure facilities and provide other services like technology assessment and professional training.
Emergence of Software Policy
The first Computer Policy of 1984 and Software Policy of 1986 emphasised the concept of software development and export through data communication links. This policy's objective was to develop software in India using Indian expertise on sophisticated computers, which were being imported duty free. This way, one could make use of the low cost expertise available in India and avoid the expense of time and cost in traveling abroad.
However, there was a substantial cost involved in the data communication links. As per the policy, companies were allowed to establish data communication links by their own initial investments. The ownership of the equipment and the operations of the same Gateway would remain with VSNL that would pay back to the user over a prescribed period after deducting the operational maintenance costs.
This used to be as high as Rs.45 lakhs per 64 Kbps for an Indian half circuit per year.
Texas Instruments has the credit of being the first software company with an Offshore Development Facility in Bengaluru. Texas Instruments was also the first to establish its own Gateway at Bengaluru with the support of VSNL on a 'build & operate' agreement.
Except Texas Instruments, no other company succeeded in establishing a similar facility. It was very expensive for smaller companies and other offshore development users to afford the high cost of the data communication.
Further, an officer from the Dept. of Electronics, Govt. of India was posted at Texas Instruments to monitor the data using the protocol analyser before issuing necessary certification. There were many hardships that Texas Instruments had to encounter and circumvent by liaising with DoT, Ministry of Commerce and the Dept of Electronics, to make sure that the concept of offshore development could be made a success.
In fact, when the Govt. announced the first Software Policy in 1986, many such issues were addressed.
STPI's role began in the government's shadow and it was more of an entrepreneurial role of working directly with software companies and working like a corporate. However, this did not mean that STPI functioned like a typical government department. The role of STPI was more of a service provider that could be leveraged by software companies.
There in emerged three important factors that gave the necessary impetus to the concept. These were the newness of the business model, Internet infrastructure facilities and the government interface; all these brought a positive response from industry, especially the SME sector, which needed this support for their business to grow.
The concept of STP Scheme was evolved in 1991 and enunciated the following objectives:
- To establish and manage infrastructure resources such as Data Communication facilities, Core Computer facilities, Built-up space and other common amenities.
- To provide 'single window' statutory services such as Project approvals, import certification software valuation and certification of exports for software exporters.
- To promote development and export of software services through technology assessments, market analyses, market segmentation and marketing support.
- To train professionals and to encourage design and development in the field of software technology and software engineering.
In 1990, three Software technology Parks (STPs) as separate autonomous societies at Pune, Bengaluru and Bhubaneswar were established, which were later merged in June 1991 into a single autonomous society as Software Technology Parks of India (STPI) and in quick succession STPIs at Noida, Gandhi Nagar, Hyderabad and Thiruvananthapuram were established. All STPIs were equipped with dedicated earth station equipment for providing Data Communication links.
The erstwhile Department of Electronics, Govt. of India with the support of World Bank had carried out a study on the opportunities presented by the Global IT Industry. This study identified the factors that are very essential for the growth of the Software Industry and also compared the potential of the countries competing in the Global Market. Some of the factors which needed improvement were clearly identified from the study and STPI focused in improving those factors.
International Communication is one such factor which needed much attention and India was factored -2 as against +8 factored to Ireland. This is one of the primary reasons why STPI took up the responsibility of providing the International Data Communication facilities exclusively for the Software Export Industry.
The Growth Booster
The Role of STPI in the growth of the IT industry has been tremendous, especially in the case of startups and SMEs.
STP scheme the catalyst
The STP scheme is a 100 percent export oriented scheme for the development and export of computer software, including export of professional services using communication links or physical media. This scheme is unique in its nature as it focuses on one product/sector, i.e. computer software. The scheme integrates the government concept of 100 percent Export Oriented Units (EOUs) and Export Processing Zones (EPZs) and the concept of Science Parks/Technology Parks, as operating elsewhere in the world.
With STPI presence, orderly implementation of STP Scheme and the Govt. initiatives, in general, the offshore software exports from the country during 1991-92, which was mere 20-35% has grown to more than 70% during 2009-10.
In fact, countries like Mauritius, Sri Lanka, Nepal, Algeria, Indonesia, etc. are taking the help of STPI to set up similar technology parks with the same concept.