Innovation and Entrepreneurship in India: An Overview
Suresh Bhagavatula, Ram Mudambi, and Johann Peter Murmann
ABSTRACT India began the process of market liberalization that opened it to significant interactions with the world economy in 1991. In this essay, we provide an overarching view of the country's journey toward integration with the global innovation and entrepreneurship network. Major nodes in this global network have two major components that may be metaphorically referred to as "pillars and ivy." Globally connected multinational enterprises (MNEs) form the pillars. Agile startups are the ivy, and their success (metaphorically, the height to which they can climb) depends on their symbiotic connections with the pillar MNEs. Both components are essential and reinforce each other. Without MNEs, the scaling of startups is hampered. Without a vibrant population of startups, MNEs' interest in a location remains driven by cost, rather than capability and creativity. MNEs (mainly foreign) provided the initial sparks for the formation of the Indian innovation and entrepreneurship ecosystem. We chart the subsequent growth of India's startups. They began in the information technology (IT) sector but now cover a much wider range of industries. Today, India's innovation and entrepreneurship ecosystem is one of the largest in the world, with global integration in terms of technology, financing, human capital, and administration.
KEYWORDS connectivity, entrepreneurship ecosystems, global linkages, multinational firms, national systems of innovation, startups
Reconceptualizing and Redirecting Research on Guanxi: 'Guan-Xi' Interaction to Form a Multicolored Chinese Knot
Peter Ping Li, Steven Shijin Zhou, Abby Jingzi Zhou, and Zhangbo Yang
ABSTRACT Guanxi is one of the most popular topics in Chinese and Western scholarship concerning social ties in China. However, several problems in research on guanxi persist, and multiple debates are still ongoing without much consensus in sight. This study has two goals. First, we offer a systematic review of the current literature on guanxi, especially by differentiating guan dyads from xi networks. This reconceptualization of guanxi enables us to clarify the concept of guanxi by differentiating its two dimensions. Second, based on this literature review, we propose a redirection of future research on guanxi such that guan dyads and xi networks are not examined in isolation; rather, their holistic and dynamic interaction is the most fruitful avenue for future research, especially the four mechanisms of their interaction. The proposed reconceptualization and redirection are our two contributions to the literature.
KEYWORDS guanxi, guan dyad, guan-xi interaction, multicolor Chinese knot, xi network
How Early Entrants Impact Cluster Emergence: MNEs vs. Local Firms in the Bangalore Digital Creative Industries
ABSTRACT This article addresses the question of how the emergence of a cluster in a global innovation system is influenced by early entrants. It does so by presenting an explorative study of the emerging digital creative industries cluster in Bangalore. I find that MNE entrants develop production and technological capabilities comparatively fast within a narrow range of value chain activities with limited spillovers to the cluster. In comparison, local entrants develop such capabilities more slowly, but within a broader range of value chain activities and with higher spillovers of skills and knowledge, as well as higher participation to building a local entrepreneurial ecosystem. I propose that these effects are moderated by the size of national consumer markets as well as industry context in the guise of project lengths and technological modularity. I also point to the role of global connectivity, proposing that local entrants, in particular, leverage international personal relationships for development of not only relational, but also production capabilities.
KEYWORDS capability development, cluster emergence, connectivity, MNE entry
The Institutional Context of Incubation: The Case of Academic Incubators in India
V. K. Narayanan and Jungyoun (Natalie) Shin
ABSTRACT We introduce incubators as an organizational form intended to facilitate entrepreneurship. The theorizing and research on incubators have been primarily anchored in market failure perspective and carry over the assumptions about a free market economy, mostly implicitly into the empirical work. This ignores the influence of the institutional context and obscures processes that may come into play in emerging economies like India. Using Scott’s model (1995, 2008) of institutional context, we argue how the institutional context provides a complementary perspective that may reveal a richer picture of incubator operation in emerging economies. We illustrate this in the case of academic incubators in India.
KEYWORDS academic incubators in India, emerging economy, incubation, institutional context
International New Ventures from Emerging Economies: Network Connectivity and Legitimacy Building
Shameen Prashantham, K. Kumar, and Sumelika Bhattacharyya
ABSTRACT We develop an integrative perspective on the role of coethnic ties and ties with foreign multinational enterprises (MNEs) – normally studied in isolation of each other – on the perceived legitimacy of international new ventures (INVs) from emerging economies. Building on the notions of people (interpersonal diaspora ties) and pipelines (interorganizational MNE ties) in Lorenzen and Mudambi's connectivity theory of clusters, we argue that these could contribute to the focal INV's internal and external legitimacy, respectively, as it seeks to upgrade its capabilities. We go a step further by highlighting people within pipelines – coethnic managers working in foreign MNEs – as a potentially important catalyst of the focal INV's cross-border legitimacy. Using an illustration of an INV from Bangalore, we note that India offers a fruitful setting – and one that is distinct from China – for future INV research into the role of people, pipelines and, in particular, people within pipelines.
KEYWORDS business strategy, entrepreneurship, India, international entrepreneurship, international new venture, legitimacy, organizational theory, social networks
Knowledge Sources and International Business Activity in a Changing Innovation Ecosystem: A Study of the Indian Pharmaceutical Industry
Sreevas Sahasranamam, Satyanarayana Rentala, and Elizabeth L. Rose
ABSTRACT The Indian pharmaceutical industry has experienced rapid growth, becoming the world's largest provider of generic drugs, based on product and process innovation. The industry has undergone dynamic changes in recent decades, operating in a rapidly evolving environment affected by domestic and global policies; a key example of the latter is the TRIPS agreement. Taking an intellectual property perspective, we describe how changes in the innovation ecosystem have affected companies' strategies related to international activity and accessing knowledge from both internal and external knowledge sources, during the transitional- and post-TRIPS periods (1995–2004 and 2005–2014, respectively). Combining intellectual property arguments with contextual aspects of the innovation ecosystem, we conjecture that, in the post-TRIPS period, externally-sourced knowledge will be more important than internally-sourced knowledge, for Indian pharmaceutical firms’ international business activity.
KEYWORDS India, innovation, intellectual property regime, international business, knowledge sources, pharmaceutical industry
An Anatomy of Bengaluru's ICT Cluster: A Community Detection Approach
Ekaterina Turkina and Ari Van Assche
ABSTRACT We use community detection analysis to investigate the structure of Bengaluru ICT cluster's inter-organizational network during the period 2015–2017. Building on the knowledge sourcing literature, we conjecture that cluster firms primarily build knowledge-seeking horizontal linkages with technologically similar companies, and that this splits the network into multiple technological communities within which firms are tightly connected, but between which linkages are scarce. We further propose that community-spanning firms which build horizontal linkages that bridge technological communities are more likely to conduct radical innovation than their peers. We finally argue that no relation exists between technological proximity and community formation in the network of vertical buyer-supplier relations. Using a voltage-based algorithm for community discovery, we draw empirical support for these predictions. We discuss the implications of our findings for Bengaluru's upgrading potential.
KEYWORDS business groups, knowledge sharing, organizational theory, patent and citation analysis, social networks