Global Redistribution of Innovation Activities

Over the last three decades, outsourcing has had a big influence on the international division of labour. It is clear that it has been a major reason for the enormous build-up of production capabilities in the developing world, in particular in the export platforms of Asia. However, the influence of outsourcing on innovation capabilities is less clear. This book asks whether and how outsourcing by firms residing in the OECD countries influences the formation of advanced innovation capability in Bangalore software suppliers. It identifies how ‘innovation-push’ by specialising buyers and ‘innovation-pull’ by increasingly capable suppliers reinforce each other. Most studies tend to focus on only one side; but the key is to see them in conjunction. The book suggests that their co-evolution changes not only the scale of outsourcing but also its contents. It indicates that a global redistribution of increasingly advanced innovation activities is underway in the software outsourcing industry.