The Globalization of Indian Firms from Steel to Software
Chapter 6: Industrializing Knowledge Production via Born Global Firms: Biotechnology and Software
6. Industrializing knowledge production via born global ﬁrms: biotechnology and software The two previous chapters discussed three stages of evolution of ﬁrms in the manufacturing sector and their progression from learning via transferring technology from external sources to institutionalizing the knowledge gained, and, ﬁnally accelerating knowledge production in the new environment. In contrast, in this chapter I focus on the rise of Indian ﬁrms in knowledge-intensive industries such as software and biotechnology. The manufacturing ﬁrms diﬀer from software and biotechnology ﬁrms in three ways. First, while complex technical knowledge was required for the former (ﬁrms producing steel, bearings, earthmoving equipment, automotive components, engines, farm equipment and commercial vehicles), the knowledge underlying these technologies was well understood and diﬀused. In contrast, the biotechnology and software industries are less mature than steel and automotives, the underlying knowledge more complex, and embedded not just in ﬁrms but within an institutional system. Second, manufacturing ﬁrms were only able to convert to using information technology for all activities in Stage III. In contrast, software and biotechnology ﬁrms, being younger and being IT-based could modularize activities from the start. Third, manufacturing ﬁrms were isolated from global markets until the 1990s; consequently, the attainment of Stage I took longer. It was only in the 1990s that managers in these ﬁrms realized that it was not necessary to reinvent the wheel. However, the ﬁrst two stages were accelerated in the software and biotechnology ﬁrms, because of their late entry and because they were interacting from the...
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