Innovation Spaces in Asia
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Innovation Spaces in Asia

Entrepreneurs, Multinational Enterprises and Policy

Edited by Maureen McKelvey and Sharmistha Bagchi-Sen

Innovation Spaces in Asia provides insight into how and why Asia is poised to impact global innovation. Asia is undergoing rapid developments in markets, sources of technology and user preferences. A key characteristic of the book is the rich empirical understanding of the dynamic processes, involving the strategic decisions of firms and entrepreneurs with the broader socio-economic environment in terms of institutions, markets, knowledge and innovation systems. Innovation spaces are analyzed within Asian countries and firms, from Asia to the world, and from the world to Asian countries.
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Chapter 14: Problem-framing in new innovation spaces: insights from software outsourcing

Rasmus Lema


This chapter examines how emerging innovation spaces are created, by focusing upon problem-solving and problem-framing tasks in the Indian software industry. Over the last three decades, outsourcing has had a major influence on the international division of labour. It is clear that it has been an important reason for the enormous build-up of production capabilities in the developing world, in particular in the export platforms of Asia. While there is increasing acknowledgement that the globalization of research and development (R & D) and innovation is following production, it is not clear how this process unfolds and whether it extends to advanced innovation. Until recently, the literature on outsourcing and global value chains maintained that only certain stages of the chain was outsourced to low-cost economies, mainly manufacturing and standardized services. Innovation activities, on the other hand, remained in so-called advanced economies (Mudambi, 2008). Outsourcing should merely strengthen suppliers’ existing position in the global division of labour – where competitive advantage is defined primarily by low cost. Innovation activities were ‘detached’ from outsourced tasks and they remained centralized in and around lead firms and global buyers residing in advanced economies.

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