Catching-up or Leapfrogging in the Indian IT Service Sector: Windows of Opportunity, Path-creating, and Moving up the Value Chain
TL;DR: In this article, the authors identify the windows of opportunity open to Indian firms, with the following findings: (i) the catching-up process by Indian IT firms can be classified as a three-stage ‘body shopping-offshoring-global delivery model’, comparable with the three steps in original equipment, own-design and own-brand manufacturing.
Abstract: type="main"> Indian IT service firms are successfully competing with world leaders and research on the industry is emerging. Providing analysis at firm rather than industry level, this article identifies the windows of opportunity open to Indian firms, with the following findings: (i) the catching-up process by Indian IT firms can be classified as a three-stage ‘body shopping–offshoring–global delivery model’, comparable with the three steps in original equipment, own-design and own-brand manufacturing; (ii) the window of opportunity for Indian firms was primarily the techno-economic paradigm shift, and secondarily the government's regulation and support of the industry; and (iii) Indian firms initially partially re-invented their own path by offshoring and created their own global delivery model, gradually moving to higher value-added services.
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TL;DR: In this article, the authors propose a framework that aims to explain why successive changes in industry leadership (called also the catch-up cycle) occur over time in a sector and identify windows of opportunity that may emerge during the long-run evolution of an industry.
341 citations
TL;DR: In this paper, the authors presented a hypothesis that at the initial stage of growth by a latecomer, increased participation in the global value chain (GVC) is necessary to learn foreign knowledge and production skills, and that functional upgrading at middle-income stage requires effort to seek separation and independence from existing foreign-dominated GVCs, and might have to seek reintegration back into the GVC after establishing their own local value chains.
Abstract: This paper presents a hypothesis stating that at the initial stage of growth by a latecomer, increased participation in the global value chain (GVC) is necessary to learn foreign knowledge and production skills, that functional upgrading at middle-income stage requires effort to seek separation and independence from existing foreign-dominated GVCs, and that latecomer firms and economies might have to seek reintegration back into the GVC after establishing their own local value chains. This paper aims to verify this “in–out-in-again” hypothesis by looking into firm cases of upgrading in Korea and Brazil. Trends in the share of foreign value-added in gross exports (FVA) in successful catching-up economies of Korea and Taiwan, including China recently, are consistent with this pattern. Regression results also confirm a negative correlation between the degree of local creation and diffusion of knowledge and FVA values, such that gaining increased local knowledge is a basis for increasing (reducing) domestic value-added (foreign value-added). Given that this variable of local creation and diffusion of knowledge is a key innovation system variable, this finding implies that building local innovation systems is the key in making a possible upgrade while being integrated into the GVC.
120 citations
Cites background from "Catching-up or Leapfrogging in the ..."
...Lundvall (1992) defined the NIS as the ‘‘elements and relationships which interact in the production, diffusion, and use of new and economically useful, knowledge....
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...As emphasized in Lee et al (2014), it is very interesting to note that the three IT service giants in India have gone through similar three stages of upgrading from body shopping to offshoring, and eventually to the global delivery model....
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TL;DR: In this paper, the authors propose the notion of green windows of opportunity, highlighting the importance of institutional changes in the creation of new opportunities for latecomer development and highlight the important role emerging economies may attain in the global green transformation.
Abstract: The world is in the early stages of a paradigm transition toward a global green economy. In this article, we propose the notion of green windows of opportunity, highlighting the importance of institutional changes in the creation of new opportunities for latecomer development. We emphasize how demand and mission-guided technical change influence the directionality of latecomer development and highlight the important role emerging economies may attain in the global green transformation. We provide important insights regarding opportunities for green development in emerging economies, how these opportunities emerge in different renewable energy sectors and their implications for the global green economy.
49 citations
TL;DR: In this article, the authors use the Pakistani IT industry as their study context and use the experiences of 12 Pakistani offshore service providers (OSPs) who succeeded in offsetting the negative implications of the country's adverse political environment.
Abstract: This paper contributes to theory building efforts around the concept of knowledge connectivity and its relevance in buyer-supplier relationships in global value chains. We use the Pakistani IT industry as our study context. Pakistan suffered a significant adverse perception bias following terror attacks in 2008-09. We based our illustration on the experiences of 12 Pakistani offshore service providers (OSPs) who succeeded in offsetting the negative implications of the country’s adverse political environment. The case firms link into two distinct value chain configurations. In each configuration, we observe a distinct course of strategic action, which we term step-up and break-out, respectively. While these observations emerged from the Pakistani context, the implications of the resulting dynamic framework for theory and practice go beyond this particular adverse country setting.
45 citations
Book•
16 May 2019TL;DR: Lee as mentioned in this paper argues that eventual catch-up and overtaking require pursuing a path that differs from that taken by forerunners, and also accounts for the Catch-Up paradox, in which one cannot conclusively catch up if they are continually trying to follow the path of those ahead.
Abstract: In his previous Schumpeter Prize-winning work, Lee analysed the 'middle-income trap', in which a developing country grows strongly only to plateau at a certain point. Yet certain developing countries, most significantly China, have managed to escape this trap. Building on the conception of the ladder from developing to developed countries being kicked way, this book suggests alternative ways, such as 'leapfrogging', in which latecomers can catch up with their forerunners. Providing policy solutions for development challenges in non-technical terms, Lee frames his theories with insightful and inventive allegories. In doing so, Lee also accounts for the catch-up paradox, in which one cannot conclusively catch-up if they are continually trying to follow the path of those ahead. He argues that eventual catch-up and overtaking require pursuing a path that differs from that taken by forerunners. This highly original and accessible book will appeal to students, scholars, practitioners, and anyone interested in economic development and innovation.
45 citations
References
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TL;DR: In this paper, the authors describe the process of inducting theory using case studies from specifying the research questions to reaching closure, which is a process similar to hypothesis-testing research.
Abstract: Building Theories From Case Study Research - This paper describes the process of inducting theory using case studies from specifying the research questions to reaching closure. Some features of the process, such as problem definition and construct validation, are similar to hypothesis-testing research. Others, such as within-case analysis and replication logic, are unique to the inductive, case-oriented process. Overall, the process described here is highly iterative and tightly linked to data. This research approach is especially appropriate in new topic areas. The resultant theory is often novel, testable, and empirically valid. Finally, framebreaking insights, the tests of good theory (e.g., parsimony, logical coherence), and convincing grounding in the evidence are the key criteria for evaluating this type of research.
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TL;DR: In this paper, the authors define a leadership event as a perceived segment of action whose meaning is created by the interactions of actors involved in producing it, and present a set of innovative methods for capturing and analyzing these contextually driven processes.
Abstract: �Traditional, hierarchical views of leadership are less and less useful given the complexities of our modern world. Leadership theory must transition to new perspectives that account for the complex adaptive needs of organizations. In this paper, we propose that leadership (as opposed to leaders) can be seen as a complex dynamic process that emerges in the interactive “spaces between” people and ideas. That is, leadership is a dynamic that transcends the capabilities of individuals alone; it is the product of interaction, tension, and exchange rules governing changes in perceptions and understanding. We label this a dynamic of adaptive leadership, and we show how this dynamic provides important insights about the nature of leadership and its outcomes in organizational fields. We define a leadership event as a perceived segment of action whose meaning is created by the interactions of actors involved in producing it, and we present a set of innovative methods for capturing and analyzing these contextually driven processes. We provide theoretical and practical implications of these ideas for organizational behavior and organization and management theory.
22,673 citations
"Catching-up or Leapfrogging in the ..." refers methods in this paper
...We combined various data collection methods, such as archival research (for example, going through publicly available company data, news articles, research journals, and reports) and person-to-person interviews, and followed the case-study method suggested by Eisenhardt (1989)....
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TL;DR: In this paper, the authors focus on international investment and international trade in the product cycle and argue that it is a mistake to assume that equal access to scientific principles in all the advanced countries means equal probability of the application of these principles in the generation of new products.
Abstract: Publisher Summary This chapter focuses on international investment and international trade in the product cycle. It is a mistake to assume that equal access to scientific principles in all the advanced countries means equal probability of the application of these principles in the generation of new products. There is ordinarily a large gap between the knowledge of a scientific principle and the embodiment of the principle in a marketable product. An entrepreneur usually has to intervene to accept the risks involved in testing whether the gap can be bridged. The United States' market offers certain unique kinds of opportunities to those who are in a position to be aware of them. The market consists of consumers with an average income that is higher than that in any other national market, and is characterized by high unit labor costs and relatively unrationed capital compared with practically all other markets. As the demand for a product expands, a certain degree of standardization usually takes place. A commitment to some set of product standards opens up technical possibilities for achieving economies of scale through mass output, and encourages long-term commitments to some given process and some fixed set of facilities.
7,068 citations
TL;DR: In this article, the authors report results from empirical tests of relationships between the pattern of innovation within a firm and certain of the firm's characteristics: the stage of development of its production process and its chosen basis of competition.
Abstract: This article reports results from empirical tests of relationships between the pattern of innovation within a firm and certain of the firm's characteristics: the stage of development of its production process and its chosen basis of competition. The hypothesized relationships posed for the present investigation are a synthesis of prior research by the present authors on two distinct but complementary conceptual models of innovation, concerning respectively: the relationship between competitive strategy and innovation, and the relationship between production process characteristics and innovation. The empirical investigation is carried out with data available from the Myers and Marquis study of successful technological innovation in five different industry segments. The essential aspects of the hypothesized relationships are that the characteristics of the innovative process will systematically correspond with the stage of development exhibited by the firm's production process technology and with its strategy for competition and growth. As a more specific example these relationships predict that there will be coherent patterns in the stimuli for innovation (market, production or new technology); in the types of innovation (product or process, original or adopted, etc.) and in barriers to innovation. The presently reported statistical evidence is decidedly favorable to the hypothesized relationships, even though the adaptations needed to implement tests with existing data introduce dependencies that limit conclusions which would otherwise be warranted. The broad implication is that strong and important relationships exist among the capability of a firm to innovate, its competitive strategy and the posture of its production resources.
3,323 citations
"Catching-up or Leapfrogging in the ..." refers methods or result in this paper
...…countries by adapting their more or less obsolete technology, an argument that is consistent with the so-called product life-cycle theory (Vernon, 1966; Utterback and Abernathy, 1975), according to which catching-up is considered to be a question of relative speed in a race along a fixed track....
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...However, more traditional or earlier literature on the technology-oriented views of latecomer development tends to focus on how the latecomers attempted to catch up with the advanced countries by adapting their more or less obsolete technology, an argument that is consistent with the so-called product life-cycle theory (Vernon, 1966; Utterback and Abernathy, 1975), according to which catching-up is considered to be a question of relative speed in a race along a fixed track....
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TL;DR: In this paper, the authors focus on international investment and international trade in the product cycle and argue that it is a mistake to assume that equal access to scientific principles in all the advanced countries means equal probability of the application of these principles in the generation of new products.
Abstract: Publisher Summary This chapter focuses on international investment and international trade in the product cycle. It is a mistake to assume that equal access to scientific principles in all the advanced countries means equal probability of the application of these principles in the generation of new products. There is ordinarily a large gap between the knowledge of a scientific principle and the embodiment of the principle in a marketable product. An entrepreneur usually has to intervene to accept the risks involved in testing whether the gap can be bridged. The United States' market offers certain unique kinds of opportunities to those who are in a position to be aware of them. The market consists of consumers with an average income that is higher than that in any other national market, and is characterized by high unit labor costs and relatively unrationed capital compared with practically all other markets. As the demand for a product expands, a certain degree of standardization usually takes place. A commitment to some set of product standards opens up technical possibilities for achieving economies of scale through mass output, and encourages long-term commitments to some given process and some fixed set of facilities.
1,857 citations
"Catching-up or Leapfrogging in the ..." refers methods or result in this paper
...However, more traditional or earlier literature on the technology-oriented views of latecomer development tends to focus on how the latecomers attempted to catch up with the advanced countries by adapting their more or less obsolete technology, an argument that is consistent with the so-called product life-cycle theory (Vernon, 1966; Utterback and Abernathy, 1975), according to which catching-up is considered to be a question of relative speed in a race along a fixed track....
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...…advanced countries by adapting their more or less obsolete technology, an argument that is consistent with the so-called product life-cycle theory (Vernon, 1966; Utterback and Abernathy, 1975), according to which catching-up is considered to be a question of relative speed in a race along a fixed…...
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