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




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.

Suggested Citation

  • Chaminade, Cristina & Vang, Jan, 2006. "Globalisation of Knowledge Production and Regional Innovation Policy: Supporting Specialized Hubs in Developing Countries," Papers in Innovation Studies 2006/15, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  • Handle: RePEc:hhs:lucirc:2006_015

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    References listed on IDEAS

    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. repec:krk:eberjl:v:1:y:2013:i:2:p:73-86 is not listed on IDEAS
    2. José M. Barrutia & Carmen Echebarria, 2010. "Developing a New Framework to Explain Transverse Evolution of Knowledge‐Driven Regional Policy Networks," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 34(4), pages 906-924, December.
    3. 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.
    4. Chen, Victor Zitian & Li, Jing & Shapiro, Daniel M., 2012. "International reverse spillover effects on parent firms: Evidences from emerging-market MNEs in developed markets," European Management Journal, Elsevier, vol. 30(3), pages 204-218.
    5. García-Quevedo, José & Mas-Verdú, Francisco & Montolio, Daniel, 2011. "What type of innovative firms acquire knowledge intensive services and from which suppliers?," INGENIO (CSIC-UPV) Working Paper Series 201108, INGENIO (CSIC-UPV).
    6. José Guimón, 2007. "Government Strategies to Attract R&D-Intensive FDI," Policy Papers del Instituto Complutense de Estudios Internacionales 07-03, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    7. José Guimón, 2009. "Government strategies to attract R&D-intensive FDI," The Journal of Technology Transfer, Springer, vol. 34(4), pages 364-379, August.
    8. Natário, Maria Manuela, 2009. "Innovation Processes and Factors on Peripheral Regions of Portugal and Spain," MPRA Paper 18302, University Library of Munich, Germany.
    9. 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.

    More about this item


    Innnovation Policy; Developing Countries;

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy


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