Suma Athreye

The Indian Software Industry and its Evolving Service Capability

This paper examines the growth of dynamic capabilities among firms in the Indian software industry by looking in some detail at the changing constraints, opportunities and competition facing incumbent firms. It emphasizes the important role played by tight labour market conditions in inducing investment in process capability and the role of entrepreneurial experimentation in evolving a business model (out-sourced software) that was best suited to limited resource advantages of Indian software firms. Copyright 2005, Oxford University Press.

Creating Competition? Globalisation and the Emergence of New Technology Producers

This paper studies the emergence of new countries as contributors to technology generation in the world economy and assesses the relationship between this and globalisation (through trade, inward FDI and international migration). It considers two measures of technology generation, viz. a countrys share of licensing revenues and of foreign origin patenting in the US, thus covering different phases and aspects of technological catch-up across countries. The paper uses a novel index to track the influence of new countries as technology generators in these datasets and uses time series techniques to understand the causal relationship between globalisation and the emergence of new technology producers. Our findings suggest a role for increasing international direct investment as a factor causing the emergence of new countries with the higher level competitiveness associated with patenting, but not in the recent surge of new countries with the basic capabilities needed to become licensors in the world economy. However, an increase in the international spread of the subsidiary sources of the patenting activity of multinationals appears to follow periods when the world economy becomes less open to trade.

Private Foreign Investment in India: Pain or Panacea?

Private foreign capital, whose presence in Indian industry was long regarded with concern and suspicion, is now presented as a panacea for Indias poor industrial and export performance. This paper examines available evidence to compare the behaviour and performance of domestic and foreign-controlled firms in India over the last five decades. It discusses the contribution of foreign capital to aggregate investment, balance of payments and economic growth. We assess the effects of government policy towards foreign investment, review recent changes, and outline implications for the future. Copyright Blackwell Publishers Ltd 2001.

Agglomeration and Growth: A Study of the Cambridge Hi-tech Cluster

This chapter is an empirical study of the growth and change in the Cambridge high technology cluster. Cambridge shows the paradoxical co- existence of vastly smaller scale outcomes but many qualitative similarities to Silicon Valley. Our main questions from the empirical enquiry in this chapter are broad: First, how has the Cambridge hi- technology cluster changed and grown overtime? Secondly, we are interested in what sorts of microeconomic factors explain these bigger changes. With an understanding of these two questions we draw some implications of the Cambridge story for our understanding of what kinds of agglomeration economies and externalities were important to the growth of the Cambridge cluster. The failure of Cambridge to globalise to the same degree as Silicon Valley, we argue, accounts for the dissimilarities in the two experiences

Industrial Concentration in a Liberalising Economy: A Study of Indian Manufacturing

This paper studies industrial concentration in Indian manufacturing sectors over the period 1970 to 1999. Given that Indian industry was highly regulated till the mid-1980s, the market structure in most manufacturing sectors was largely shaped by government policy. Deregulation after 1985 allowed greater scope for competitive processes, so that concentration levels are now more likely to be determined by industry characteristics rather than government policy. We find that, on the whole, concentration levels were indeed more significantly related to industry characteristics after deregulation. However, even after controlling for these characteristics, there is considerable heterogeneity in the patterns of concentration in individual industries.

Multinational Firms and the Evolution of the Indian Software Industry

The Indian software industry appears to provide a startling confirmation of the benefits of multinational investment in a fledging industrial sector. The main question explored in this paper is how and why this happened. We find that multinational firms had an important catalyzing effect on the industrys evolution, even though foreign firms established by expatriate Indians probably exerted more competitive pressure. We do not accept a popular view, which ascribes this benign influence to the development of human capital. We argue is was tight labour markets due to foreign competition, which induced domestic firms to both acquire unique organizational capabilities and to improve the value-adding strategies of multinational firms.

On Markets in Knowledge

Two conditions must be met in order for specialised markets in knowledge to emerge:(i) The alienation of knowledge from its context which allows knowledge to become a commoditisable product that can be bought and sold and transferred thereafter to different uses. Property rights are sufficient to such alienation and commoditisation.(ii) The establishment of a reasonable volume of exchange transactions in that commodified knowledge, which in turn requires cross sectoral application and horizontal integration. Institutional structures facilitate the continuance of exchanges and are sufficient to the second condition. The second condition is more stringent than the first.Empirical evidence suggests that technological convergence may be the specific and important historical occurrence when markets in technological knowledge emerge. Technological convergence meant that there were areas where knowledge could be transferred across industries, and in that process of transference knowledge also became more generic and abstract.

The Global Computer Software Sector

Until recently, economists studying economic development have tended to consider it a universal process, or focussed their attention on common aspects. This book originates from the growing recognition of significant sectoral differences in economic development and examines the catching-up process in five different economic sectors: pharmaceuticals, telecommunications equipment, semiconductors, software, and agro-food industries. Each of these sector studies explore the learning and catch-up processes in various developing countries, in order to identify both the common features, and those which differ significantly across sectors and nations. The authors pay particular attention to China, India, Brazil, Korea and Taiwan.

Competition, Rivalry And Innovative Behaviour

This paper is an empirical study of the importance of competition and rivalry in explaining innovative behaviour by software firms. The paper distinguishes between two notions of competition. One in which rivalry occurs due the possession of greater market power, and the other in which rivalry occurs due to diffennces in the abilities of firms. In addition the paper also decomposes changes in the extent of innovation due to the activities of firms that are innovators and due to changes in the probability of innovating. Competition always influences the extent of innovation by changing the propensity of firms to innovate.

Specialized Markets and the Behavior of Firms: Evidence from the United Kingdom’s Regional Economies

A key feature of the South East regional economy in recent decades has been the development of several intermediate markets in specialized business services. This article investigates whether the greater development of specialized markets in the South East is associated with different competitive and technological behaviors of innovative firms in this region when compared with firms in the Industrial Heartland regions of the West Midlands, North West England, and York-shire and Humberside. We find greater buying and selling of technology by firms and the presence of technological externalities in the South East, even when the services-intensive nature of the region’s production is accounted for. Industrial Heartland firms, in contrast, more frequently collaborate with domestic suppliers who are also an important source of technology. They also have greater collaboration with higher education institutes.