Economic Adversity and Entrepreneurship-led Growth: Lessons from the Indian Software Sector

It is commonly believed that the business environment in developing countries does not allow productive technology-based entrepreneurship to flourish. In this paper, we draw on the experience of Indian software firms where entrepreneurial growth has belied these predictions. This paper argues that the business models chosen by Indian firms were those that best aligned the country’s abundant labour resources and advantages to global demand. Many potentially higher value added opportunities struggled to attain success, but the qualitative value of experimental failures and the capability gaps they exposed was invaluable for collective managerial learning in the industry. Second, the paper also shows that the presence of growth opportunities and the success of firms stimulated institutional evolution to promote entrepreneurial growth. Last we show that the distinctive aggregate contribution of entrepreneurial firms was that they outperformed business houses and multinational subsidiaries in their more productive use of available capital resources whilst achieving similar levels of growth in output and employment. This paper draws upon an earlier shorter paper co-authored with Mike Hobday and titled 'Overcoming Development Adversity: How Entrepreneurs Led Software Development in India'.Technology entrepreneurship, institutions and economic development, Indian software, intellectual property rights

AGGLOMERATION AND GROWTH: A STUDY OF THE CAMBRIDGE HI-TECH CLUSTER

This chapter is an empirical study of the growth and change in the Cambridge high technology cluster. Cambridge shows the paradoxical co- existence of vastly smaller scale outcomes but many qualitative similarities to Silicon Valley. Our main questions from the empirical enquiry in this chapter are broad: First, how has the Cambridge hi- technology cluster changed and grown overtime? Secondly, we are interested in what sorts of microeconomic factors explain these bigger changes. With an understanding of these two questions we draw some implications of the Cambridge story for our understanding of what kinds of agglomeration economies and externalities were important to the growth of the Cambridge cluster. The failure of Cambridge to globalise to the same degree as Silicon Valley, we argue, accounts for the dissimilarities in the two experiencesclustering and growth, cambridge hi-technology

Economic Adversity and Entrepreneurship-led Growth - Lessons from the Indian Software Sector

It is commonly believed that the business environment in developing countries does not allow productive technology-based entrepreneurship to flourish. In this paper, we draw on the experience of Indian software firms where entrepreneurial growth has belied these predictions. This paper argues that the business models chosen by Indian firms were those that best aligned the country's abundant labour resources and advantages to global demand. Many potentially higher value added opportunities struggled to attain success, but the qualitative value of experimental failures and the capability gaps they exposed was invaluable for collective managerial learning in the industry. Second, the paper also shows that the presence of growth opportunities and the success of firms stimulated institutional evolution to promote entrepreneurial growth. Last we show that the distinctive aggregate contribution of entrepreneurial firms was that they outperformed business houses and multinational subsidiaries in their more productive use of available capital resources whilst achieving similar levels of growth in output and employment. This paper draws upon an earlier shorter paper co-authored with Mike Hobday and titled 'Overcoming Development Adversity: How Entrepreneurs Led Software Development in India'.technology entrepreneurship, institutions and economic development, Indian software, intellectual property rights

Go west for fame and fortune? The role of internationalization in the growth of Chinese telecom firms

This paper focuses on the role played by internationalization in the growth of Chinese telecom firms by comparing the three cases from China’s telecom sector – Huawei Technologies (Huawei), Zhongxing Telecom Equipment Corporation (ZTE), Datang Telecom Technology (Datang). Faced with a global market that was strongly oligopolistic and dominated by Western firms, we show that internationalization strategies triggered by resource seeking played different roles in the growth strategies of these three firms. The contrasting fortunes of these firms also underscores the fact that the success of internationalization strategies of firms from emerging markets cannot be understood without reference to the global competitive environment faced by firms

Patent incentives: Returns to patenting and the inducement for research & development (R&D)

The UK has one of the oldest and best regarded intellectual property rights (IPR) regimes in the world. Yet there is little evidence on private returns to patenting for firms operating in the UK, and on the incentive effects of patenting in encouraging R&D investment in patenting firms. Using available data from the UK innovation survey (known as the Community Innovation Survey or CIS) and linked business performance data the report assesses both the additional returns firms achieve by patenting, and the effects on R&D spending. This report tests an economic model built upon the following intuition. The monopoly power conferred by a patent provides a firm a price premium in new product revenue, thus increasing profitability. At the same time this increased profitability also acts as an inducement to increase R&D spending by the firm. Using this idea we try to jointly estimate the extent of the premium and the inducement to R&D. In this way the research builds and extends work in two literature streams, viz. the economic literature on the value of patents and the literature on effect of patents on R&D expenditures

The internationalization of Chinese and Indian firms: trends, motivations and policy implications

The rapid rise in the overseas investments of Indian and Chinese firms has attracted widespread attention in recent years. To a large extent, the growing internationalization of these emerging economies has been driven by a search for resources, technology and related assets. What are the implications of this for foreign direct investment policy in both the source and the recipient countries? Furthermore, how will the ongoing global financial crisis affect the continued expansion of multinationals from the two countries, which have relied on international markets to fund their investments

The internationalization of Chinese and Indian firms: trends, motivations and strategy

The last two decades have seen significant internationalization of firms from developing economies, in terms of their greater participation in international trade, growing outflows of foreign direct investment (FDI), and a recent surge in their cross-border mergers and acquisition activity. Outward investment from developing countries is not a new phenomenon but in recent years there has been a marked increase in the magnitude of flows and a qualitative transformation in their pattern. Within this broad trend, the growing internationalization of firms from two fastgrowing developing countries, China and India, is particularly notable. Exports have been a central feature of the growth of the Chinese economy over the last three decades and, more recently, they have made a visible contribution to Indian growth too. Outward FDI from China and India has grown rapidly in recent years, and firms from these two countries are increasingly involved in overseas mergers and acquisitions

R&D offshoring and the domestic science base in India and China

This paper uses patent and publication data to assess the nature of technological advantages that are attracting R&D offshoring and outsourcing activities to India and China and the possible consequences of such R&D offshoring in increasing domestic innovative capability and building domestic research infrastructure. We find evidence that domestic patenting is concentrated in sectors that are different from sectors of R&D offshoring. Furthermore, whilst the domestic science base (as measured by publications data) in India and China shows strong complementarities in its specialisation profile to that in the US, our data also suggest that the location of international R&D activity in these economies from 1995 may not have strengthened the science base of these economies. Foreign patenting activities in India and China are also marked by a low attachment to the science base.R&D offshoring/internationalisation, Science base, Emerging economies, India and China

Internationalising to create Firm Specific Advantages: Leapfrogging strategies of U.S. Pharmaceutical firms in the 1930s and 1940s & Indian Pharmaceutical firms in the 1990s and 2000s

Internationalisation is a useful strategy to gain firm specific advantages during periods of technological discontinuity. The pharmaceutical industry offers us two such episodes as examples: when the antibiotics revolution was beginning and when the possibilities of genetic routes to new drug discovery were realised. This paper compares the strategies adopted by laggard U.S. firms scrambling to gain capabilities in antibiotics, and Indian firms equally eager to acquire positions in new biotechnology based drugs and shows that both groups used internationalisation strategies to gain technological advantages and build up their firm specific advantages.Technological leapfrogging, Internationalisation Strategies, Indian Pharmaceutical industry, Antibiotics revolution, US Pharmaceuticals

Experimentation with Strategy and the Evolution of Dynamic Capability in the Indian Pharmaceutical Sector

This paper demonstrates that radical regulatory changes can be tantamount to technological revolutions by studying Indian pharmaceutical firms. It shows that radical regulatory changes such as the Indian Patent Act of 1970, the New Industrial Policy of 1991 and the signing of TRIPS (Trade Related Intellectual Property Rights System) in 1995 served to open up new economic opportunities and constraints in the wake of which the winners and losers were selected as a function of the dynamic firm capabilities most appropriate for the new market environment.International Marketing, R&D Management, India, Pharmaceutical Sector, Corporate Strategy