Knowledge, Organizational Evolution, and Market Creation

Knowledge, Organizational Evolution, and Market Creation

The Globalization of Indian Firms from Steel to Software

Gita Sud de Surie

Knowledge, Organizational Evolution, and Market Creation documents the emergence of the Indian multinational by looking at data from firms in the ‘old’ economy, such as those in manufacturing, steel-making, automotive components and heavy machinery and the ‘new economy’ such as software and biotechnology. The author provides insights on knowledge transfer, innovation and capability building processes through in-depth case studies in these industries and suggests that both entrepreneurship and distributed innovation are critical for the growth of firms globally.

Appendix B: Indian software industry: historical background

Gita Sud de Surie

Subjects: business and management, international business, knowledge management, organisational innovation, economics and finance, industrial organisation, innovation and technology, knowledge management, organisational innovation

Extract

The diffusion of information technology (IT) into all other industrial and service sectors makes it one of the most critical technologies affecting economic growth in developing countries (World Bank, 1992). Failure to introduce new information technologies is likely to result in inefficient administrative and production methods. While IT includes both hardware and software technologies, software is vital because other technologies cannot function without it. Software is an important component of overall value within information technologies and is becoming a pervasive technology embodied in a vast and diversified range of products and services (Gaio, 1989). The development of a local software industry is seen as a necessity for developing countries to be able to adapt software technology to suit their particular local needs. Software production is also seen as the best entry point for developing countries into the IT production complex because of lower entry barriers and capital intensity, greater labor intensity and a lower rate of obsolescence (for some types of software) and fewer economies of scale. Labor intensity of production offers an opportunity to developing countries compared with other production processes. Thus, developing countries’ production and use of software is becoming more intense and India, China, Brazil, Mexico, Singapore, Hong Kong, Taiwan, South Korea, and the Philippines all have software industries of note with annual growth rates of 30 to 40 percent not being uncommon (Heeks, 1996). Other interesting features of software include the fact that it is intangible, modifiable after initial production...

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