As the dominant region for India's rapidly growing software industry, Bangalore is often compared to Silicon Valley. This dissertation examines the basis for the comparison by studying the software and the telecommunications equipment industries in Bangalore. The study also answers two questions. Why has India developed a globally competitive software industry when it has failed in other information technology (IT) sectors? How does the changing character of the developmental state affect the organization of production in firms and the position of regions in the international division of labor? While India's insignificant share of world IT production reflect the limited capabilities of the state, its developmental character has changed since the 1980s. The state has reached out to private capital, especially in the IT industry. But as the software industry has grown, Bangalore's older public-sector telecommunications equipment industry has declined, although the characteristics of telecommunications equipment are now determined by software. The divergent fortunes of the two sectors is used to show that even as the state has embedded itself in private capital, it has suffered erosion of autonomy, constraining its ability to rejuvenate the telecommunications equipment industry and other economic sectors. As the rejuvenation of any economic sector in the information age requires the use of software, it has also affected the position of the software industry in the international division of labor. Firms that began to export in the 1980s, offering low-wage, low value-added services, have since moved to more rewarding work as Indian skills have come to be prized globally. But in the 1990s, a majority of firms have struggled: rising wages have blunted the low-wage strategy, while social constraints on the state have limited the institutional support for valorizing skills either through innovation or local markets. This has hindered the transformation of Bangalore into a Silicon Valley style region that defines technologies. The dissertation shows that the path to an effective developmental state is not well defined and that multiple trajectories are possible. It also shows how a specific development trajectory influences the ability of firms and regions to exploit the opportunities provided by new technologies and industries.