Intellectual Property and Innovation: Changing Perspectives in the Indian IT Industry

Indian government has undertaken significant modifications in the IP regime of the country. This will lead to a realignment of business strategies by firms in several sectors. Similarly, with liberalization and globalization, new opportunities for IP creation may emerge for Indian firms. In this context, the paper attempts to document the emerging perspectives vis-�-vis IPRs in the Indian IT industry and explore factors that are driving the change in perspectives. Large IT firms and firms in high-end niche areas are proactively seeking IP based growth strategies. While they typically seek IP protection in Western nations and not so much in India, this has led them to perceive restrictive IP regimes more positively. IP regimes in the West are more relevant for IP creating Indian IT firms today but this may change in the near future as Indian market expands. Significant IP creation by MNC subsidiaries in India is also contributing to this change in perception. Survey data show that an average IT firm in India also perceives IP protection as an important appropriability mechanism, but access to markets and relevant complementary assets continue to be more important for appropriating profits from their economic activity. A positive view of the restrictive IP regimes also gets reflected in the demands of Indian industry associations for changes in the Indian law. Broadly, these changes in perceptions seem to be linked to the evolving global production networks, changing activity profile of Indian IT firms, emerging business opportunities and changes in the competitive scenario. The understanding of Indian IT firms of the complexities of IP regimes remains rudimentary and they will need significant preparation to deal with these IP related challenges.

Linking Technical Education to Business Growth: A Case Study on Building Technical Skills in India

Education has been recognized as the most important source of competitive advantage for a nation. It is the key determinant of firm level productivity which in turn drives business growth and profitability. Technical knowledge, in particular, is required both for industrial as well as service development. Technical institutions contribute to the growth of business and industry in a variety of ways. The most influential and direct impact is through their graduates who bring in new skills and perspectives to firms. Industries also seek advanced training on specific topics as well as consultancy from technical institutions. Often these institutions collaborate with academics to design and develop new technologies. In this paper we have argued that technical education plays a crucial role in building these capabilities and consequently in the growth of industry. We use the case study of the Indian technical education system to explore the nature of this system, mechanisms used to govern it, linkages between the education regime and the industry, and the roles that different stakeholders play in ensuring that such a regime delivers sustained advantage to the society. We study the business growth in a few select sectors and the changing needs of technical skills therein. These sectors are agricultural implements, auto-components, chemicals, construction, garments and machine tools. We also illustrate the link between technological innovation and technical skills thereby pointing towards the trajectory of developing industrial competitiveness.

How has the Indian Corporate Sector Responded to Two Decades of Economic Reforms in India? An Exploration of Patterns and Trends

In the context of various policy initiatives made during the last two decades to reform the Indian economy in general and corporate sector in particular, the present paper attempts to assess how the firms have responded to these policy measures and the resultant changes in the business conditions in a long run perspective. The paper finds that although the rate of growth of the Indian industry sector has not accelerated following economic reforms probably due to slow growth in agriculture and industrial productivity, investment in general and FDI in particular have shown considerable increase. Increase in competitive pressures during this period has forced the firms to adopt a variety of strategies. While reliance on mergers and acquisitions (M&A) has increased to restructure business and grow, the role of embodied and disembodied technology purchase has declined with firms relying somewhat more on in-house R&D. On the other hand, although strategies of building marketing and distribution related complementary assets continue to dominate the strategy of product differentiation, their role in a relative sense seems to have declined as these expenses as a proportion of sales show a declining trend. However, the emerging competitive pressures have raised the importance of sub-contracting/ outsourcing manufacturing, reducing the degrees of vertical integration. Interestingly, while cost-efficiencies do not show improvements, export orientation has increased across the industries significantly signaling enhanced global competitiveness of Indian firms, although imports have risen faster than exports. Overall, the observed trends of corporate response to economic reforms are interesting, but one need to systematically explore how M&A led consolidation and flows of FDI are linked to the adoption of various non-price strategies relating to technology and product differentiation. As economic reform deepens and competitive pressures build up, an analysis of these interactions would provide useful insights for understanding corporate behaviour and for making policy choices.

Measuring Institutional Relatedness

Firms in most emerging economies are engaged in seemingly un-related activities. This is particularly observed in the case of business groups which dominate the landscape of these economies. Initially, diversification in emerging economies that was not based on product or technological considerations was considered value reducing. However, according to the new emerging consensus unrelated diversification is a strategic response to the institutional voids that exist in such economies. Despite major breakthroughs in conceptualizing this institutional relatedness, the empirical support for this concept has come only through case studies and hence is not generalizable. Creating an appropriate measure of institutional relatedness is a challenge because it has to take into account the .unique and invisible. nature of institutional relatedness. An appropriate measure should capture the myriad reasons used by firms to combine various businesses in emerging economies as a response to various institutional voids, without giving undue importance to any specific rationale. Besides, the measure should not be a fixed value; it should be allowed to change to help gauge the impact of institutional transitions on relatedness. Finally, it should provide for the uniqueness of each firm when it ventures into areas not tried by other firms. In this paper we purport to address this lacuna in research by proposing an empirically implementable measure for institutional relatedness having the features described above. We also show that the empirical estimates for India of our measure of relatedness are in consonance with the tendencies observed by studies using the case-study method and seem to be linked with the institutional transitions that have been observed in recent years.

Empirical Assessment of Coherence in Information Technology Firms

Coherence is the ability to discover new – potentially profitable – combinations of various types of knowledge assets where complementarity is the basis for relevant combinations. Assets are considered complementary if doing (more of) any one of them increases the returns to doing (more of) others. Despite its strategic importance, few studies have addressed the issue of coherence in the Information Technology (IT) industry. This paper develops a novel methodology assess the extent of complementarity and coherence in the IT firms grounded in ‘sensemaking’, evolutionary economics, and strategic management. This paper uses managerial perspective for defining businesses. Managers and IT experts identify a typical IT firm based on the dimensions of applications (verticals) and specializations (service lines). Another feature of this paper is the use of survivor principle for assessing complementarity. The results on complementarity suggest that in case of applications, the boundaries between Transport & Ports and Airlines & Railways are getting blurred and these could become a generic combination. Similarly, in case of specializations Software maintenance migration and RDBMS, Datawarehousing & Datamining could become a generic combination. The results also suggest that there is substantial scope for improvement in coherence in both applications and specializations. Analysis of coherence also indicates greater fungibility of knowledge in applications than knowledge in specializations. Another finding is that the IT firms retain coherence with large number of applications but not with large number of specializations. Finally, as the number of applications and specializations reach a critical limit, the average coherence shows a definite decline.

Foreign R&D Centres in India: An Analysis of their Size, Structure and Implications

The study measures the contribution of MNCs to the generation of innovations from India. The focus is on innovations that are carried out in foreign R&D Centres. After having mapped out the size of this sector, the study develops a way of classifying them into two categories on the basis of their actual record with respect to performance of innovations. Further we survey the policies that are available in India to promote FDI in R&D services. The study also identify the characteristics of these foreign R&D centres in terms of a number of indicators like their, size, domain expertise, physical location and then it distils out the interaction of these centres with India’s National System of Innovation. The latter is carried out through a primary survey. The contribution of this study is an identification of the size of foreign R&D Centres in India from official sources of data and its actual working. The study has thus a number of pointers for public policy for promoting this activity so that it is beneficial to the host economy of India.

An Arrested Virtuous Circle? Higher Education And High-Tech Industries In India

We provide a brief but comprehensive overview of linkages between higher education and the high tech sector and study the major linkages in India. We find that the links outside of the labor market are weak. This is attributed to a regulatory structure that separates research from the university and discourages good faculty from joining, which erodes the quality of the intellectual capital necessary to generate new knowledge. In the labor market, we find a robust link between higher education and high-tech industry, but despite a strong private sector supply response to the growth of the high-tech industry, the quality leaves much to be desired. Poor university governance may be limiting both labor market and non-labor market linkages. Industry efforts to improve the quality of graduates are promising but over reliance on industry risks compromising workforce flexibility. Addressing the governance failures in higher education is necessary to strengthen the links between higher education and high tech industry.

Labour Market Deepening in the Indian Information Technology Industry: An Exploratory Analysis

The Indian Information Technology (IT) sector has seen significant growth in terms of employment and revenue and is expected to provide quality employment to a large number of workers in the coming years. A more widespread participation of workers with different skill/education profiles, gender, regions etc. would facilitate deepening of the labour market and eventually reduce costs. The only data on the IT industry that has been analyzed so far is based on surveys conducted by the National Association of Software and Services Companies (NASSCOM). NASSCOM estimates are essentially based on data collected from its members. While the estimates are considered to be reasonably reliable, one is not sure of the coverage of IT firms by NASSCOM, particularly of small IT firms and hardware firms. Besides, the estimates may not adequately capture employment of IT workers in IT using sectors. It is, therefore, desirable to explore other data sets to analyze issues relating to the IT labour market in India. This paper is an attempt in this direction and hopes to provide a tentative understanding of the processes that have been important for the evolution of the IT labour market in India. It analyses NASSCOM and National Sample Survey (NSS) data to explore the processes that deepen the IT labour market in India. The analysis suggests that deepening is actually taking place but the pace can probably be enhanced. Transition to the off-shore model, growth of the ITES sector, competition and infrastructure led movement of IT activity to smaller cities and hiring of workers with diverse education backgrounds and of women workers has facilitated the deepening processes. These processes will need to be intensified in order to further deepen the market and enhance employment opportunities.

Communication Standards Adoption in Developing Economies: Issues and Options for India

Given the importance of communications in todays world, its spread in developing economies is critical for their development. Emergence of standards reduces market and technological uncertainty and lays the foundation for market creation and enhances the diffusion of communication technologies partly through the advantages associated with network and scale economies. Standardisation has also become important with the rise in cross-fertilisation between information technology (IT) and other technologies, especially in communications. Under these circumstances, strategic implications of IT standardisation are huge because standards can determine the growth potential of individual firms, affect the competitive advantage of nations and even development of technologies and their diffusion. Policies for standards adoption have been used world-wide to facilitate the diffusion of communications technologies, acquire a larger market share of the global telecom market, build technological capabilities. The paper reviews various approaches to communications standard adoption as well as the experiences of other countries. These approaches and experiences and the associated market and regulatory failures are evaluated in the context of the current Indian situation. This evaluation suggests that a standards neutral policy is desirable for India.

Knowledge Flows and Industrial Clusters: An Analytical Review of Literature

The dynamism and persistence of competitiveness among industrial clusters, even in the wake of globalization and liberalization in the 1990s, had led researchers to explore the causes of dynamic efficiencies at the cluster level. Cluster studies in the 19880s focused on static advantages of clustering that essentially emerge from lower transaction costs, vertical disintegration of production, availability of skilled manpower and inter-form interaction. Recent studies have focused on dynamic efficiencies that emanate from learning at the cluster level. The "knowledge focus" of cluster studies is of recent origin and we know very little about the nature of knowledge flows and their determinants. This paper reviews the available literature to identify key processes at work and the gaps in the understanding of these processes. It is suggested that the nature and quantum of knowledge flows in a cluster would depend upon its (a) internal characteristics, (b) external linkages and 9c) external policy and economic environment. Using available studies, the paper highlights the role of these characteristics in the generation and flows of knowledge within the cluster. Many of the relationships are still being explored and no consensus has emerged. Future efforts at analyzing these issues will need to systematically capture the knowledge embodied in products, processes and practices and the variety of sources that contribute to the development and diffusion of this knowledge. Apart from other issues, a research focus on the role of "external" linkages of a cluster in knowledge flows will be extremely useful and should be accorded top priority. In the process, the linkages between "internal" and "external" sources of knowledge should be also be systematically analyzed. Some methodological issues that will need to be addressed while pursuing research is this direction are identified.