Most Indian organizations operate within the technological frontier and focus on lowering costs, sometimes through frugal innovation or jugaad, to meet the constrained affordability of Indian consumers. Process and organizational innovations abound more than product or supply chain management innovations. Foreign multinationals, the major contributor of patents in India, appear to be uninhibited by the current state of the IP protection regime, although this has deficiencies in enforcement. A new noteworthy trend is the rise of startups that hold promise as a source of product and business model innovations. Our analysis of the (limited) extant literature indicates a general dearth of empirical research on this topic, relative to work on China; as such, there is scope for further research.
This paper offers a perspective on innovation in India by both Indian and foreign companies. Using an inward‐outward lens, we conclude that while many Indian organizations have been the source of myriad process and incremental – as well as frugal – innovations that have cumulatively created value for companies and consumers, much of this has happened within the technological frontier and has been focused on lowering costs to meet the constrained affordability of Indian consumers (inward lens). At the same time, foreign multinationals have played an important role in initiating patent‐creating R&D activity, mostly for global products (outward lens). Spillovers from these entities have, in part, fueled the emergent rise of startups, many of which are pursuing product innovation and, in some instances, frugal innovation.
We develop an integrative perspective on the role of coethnic ties and ties with foreign multinational enterprises (MNEs) – normally studied in isolation of each other – on the perceived legitimacy of international new ventures (INVs) from emerging economies. Building on the notions of people (interpersonal diaspora ties) and pipelines (interorganizational MNE ties) in Lorenzen and Mudambi's connectivity theory of clusters, we argue that these could contribute to the focal INV's internal and external legitimacy, respectively, as it seeks to upgrade its capabilities. We go a step further by highlighting people within pipelines – coethnic managers working in foreign MNEs – as a potentially important catalyst of the focal INV's cross-border legitimacy. Using an illustration of an INV from Bangalore, we note that India offers a fruitful setting – and one that is distinct from China – for future INV research into the role of people, pipelines and, in particular, people within pipelines.
A large number of Chinese firms lack the resources for having competitive advantages. Under this severe constraint, such firms are forced to find new paths toward developing certain competitive advantages, including the ability to combine ordinary resources into novel competitive advantages, which is referred to as compositional capability. Such a special capability underlying novel competitive advantages is related to certain cultural factors, such as the Chinese cultural tradition in the case of China. However, the potential links between compositional capability and the Chinese cultural tradition remain poorly understood and largely unspecified. This paper responds to the call for more research on identifying relevant cultural factors by explicating the inherent connections between compositional capability and the Chinese cultural value of balanced moderation.