The Globalization of Indian Firms from Steel to Software
Chapter 1: Introduction
This book documents the journey embarked on by ﬁrms in ﬁve diﬀerent industries over the period of a decade (1993–2003) beginning shortly after the liberalization of the Indian economy in 1991. It includes ‘old economy’ industries such as steel, automotive components, heavy equipment and other manufacturing industries, and ‘new economy’ industries such as software and biotechnology.1 Internationalization has largely been examined from the perspective of industrialized countries with some exceptions (Dahlman and Westphal, 1982; Westphal, Kim, and Dahlman, 1985; Lall, 1987; Enos and Park, 1988; Chang, 2003; Guillen, 2005) of studies on how developing countries and emerging economies build capabilities. Although problems and issues related to development have been widely studied, the emphasis has been on technology transfer by foreign ﬁrms and its attendant diﬃculties rather than on the innovative capacities of recipient ﬁrms. This book aims to redress this balance by adopting an evolutionary approach to capabilitybuilding and focusing on innovation in India, a developing country, and to situate this process in the context of a transition to a market-oriented economy. Although the perspectives applied in this book are not new, they have been synthesized and applied in a novel context – an emerging market. CONTEXT I draw on a variety of disciplinary perspectives to develop a theoretical framework for the creation of organizational and technological capabilities. It combines perspectives on social learning, internationalization, knowledge and capabilities, real options, and complexity theories to yield a deeper understanding of how internationalization occurs. The analysis focuses primarily on ﬁrms...