Models of Innovation in Emerging Economies

CENTRE FOR BUSINESS AND DEVELOPMENT STUDIES (CBDS) SEMINAR:

MODELS OF INNOVATION IN EMERGING ECONOMIES

With Dr Pradeep Ray (from Australian School of Business UNSW) and Dr Sudhanshu Rai (from Copenhagen Business School) as discussant

September 24, 2012 - 14:00-16:00

CBS Porcelænshaven 18b, Room S-0.23

Innovation is critical for competitive survival in a globalised world, however, many firms in emerging economies (EMFs) lack resources to innovate. Hence what kind of innovation strategy to pursue is a daunting challenge for these enterprises.

In our studies, we found at least two innovation strategies pursued by EMFs: 1) autonomous 2) linkage-oriented. In the autonomous category, EMFs in telecom and auto industry in India, working under extreme resource constraints, leveraged resources from local factor and intermediate product markets to create disruptive technologies for low income mass markets. By contrast, in the Indian IT and Taiwanese TFT-LCD industries, linkages with foreign MNCs obtained resources to innovate new products and services for sophisticated customers in global markets. In our research we found that both innovation strategies, i.e., autonomous and linkage oriented, are effective in extreme resource constrained situations. In a linkage-oriented alliance strategy the EMF mounts the global value chain of innovation led by the MNC. By contrast, in an autonomous strategy the EMF retains control of the value chain in local mass markets and pursues similar emerging economy markets around the world. The success of both strategies is predicated upon learning efforts by the EMF. The type of innovation outcomes discerned in our research were a) disruptive technologies and b) new to the world technologies.

The purpose of this presentation is to explain the innovation models in detail.