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Globalisation of Knowledge Production and Regional Innovation Policy: Supporting Specialized Hubs in Developing Countries


Author Info

  • Chaminade, Cristina

    (CIRCLE, Lund University)

  • Vang, Jan

    (CIRCLE and Copenhagen Institute of Technology, Aalborg University)


This paper sheds light on the role of the regional innovation system facilitating the transition from competing on low cost activities/services towards competing in innovation, using Bangalore software industry as an example. Recent research has documented that Bangalore has become one of the most important IT clusters outside the US. According to this stream of literature a combination of easy access to qualified and relatively cheap technical human capital has attracted a number of transnational corporations (TNCs) during the nineties (eg. IBM, Motorola, Hewlett-Packard, Siemens, 3M, Texas). The TNCs have stimulated a tremendous development of the IT software industry either through outsourcing of routine activities or though establishing offshore subsidiaries. This literature however has not yet paid much attention to the evolutionary aspects of the system of innovation, that is, how the system of innovation emerges and evolves encompassing the changes in the strategies of the indigenous firms. This chapter attempts to contribute to reducing these omission by paying specific attention to the evolutionary aspects of the system of innovation, analyzing the emergence and evolution of the regional system of innovation of the software industry in Bangalore, India. The case clearly illustrates that the move from cost competition to innovation base competition of the Bangalore firms is seriously compromised by the existing weaknesses in systemic aspects of the regional system of innovation. The interactions with Universities are weak and so are the interactions among the indigenous firms. Furthermore, the connections with the final users and lead users are also quite limited. The paper concludes suggesting some policy measures that take the specific systemic propensities of the Bangalore cluster into account.

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Bibliographic Info

Paper provided by Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy in its series Papers in Innovation Studies with number 2006/15.

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Length: 32 pages
Date of creation: 01 Dec 2006
Date of revision:
Handle: RePEc:hhs:lucirc:2006_015

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Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Phone: +46 (0) 46 222 74 68
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Keywords: Innnovation Policy; Developing Countries;

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  1. Arora, Ashish & Arunachalam, V. S. & Asundi, Jai & Fernandes, Ronald, 2001. "The Indian software services industry," Research Policy, Elsevier, vol. 30(8), pages 1267-1287, October.
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Cited by:
  1. Maria Manuela Natario & Joao Pedro Couto & Ascensao Maria Braga & Teresa Maria Tiago, 2011. "Evaluating The Determinants Of National Innovative Capacity Among European Countries," ERSA conference papers ersa10p1342, European Regional Science Association.
  2. Natário, Maria Manuela, 2009. "Innovation Processes and Factors on Peripheral Regions of Portugal and Spain," MPRA Paper 18302, University Library of Munich, Germany.
  3. José García-Quevedo & Francisco Mas-Verdú & Daniel Montolio, 2011. "What type of innovative firms acquire knowledge intensive services and from which suppliers?," Working Papers 2011/22, Institut d'Economia de Barcelona (IEB).
  4. José Guimón, 2009. "Government strategies to attract R&D-intensive FDI," The Journal of Technology Transfer, Springer, vol. 34(4), pages 364-379, August.
  5. Maria Manuela Natário & João Pedro Couto & Ascensão Maria Braga & Teresa Maria Tiago, 2011. "Dynamics of innovation in European regions," ERSA conference papers ersa11p466, European Regional Science Association.


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