IDEAS home Printed from https://ideas.repec.org/a/bla/growch/v52y2021i2p687-705.html
   My bibliography  Save this article

The Indian venture capital emergence, development, and boom: A southern contextualization

Author

Listed:
  • Manuel Gonzalo
  • Hugo Kantis

Abstract

Even during the current COVID‐19 crisis, venture capital (VC) is booming in India. Indian‐based VC funds grew from less than 10 at the start of the 1990s to more than 500 nowadays, with the amount of total investment continuously increasing since 2000. The aim of this paper is to contextualize the process of emergence, development, and boom of the Indian VC industry from the theoretical perspective of innovation and entrepreneurial systems, particularly incorporating contributions from Latin American and Indian authors. In doing so, we present a global, historical, and territorially grounded narrative of the Indian VC development stressing the relevance of: (a) the institutional and technological capabilities accumulated by the Indian National Innovation System (NIS) and the Indian Computer and Information Services Entrepreneurial Ecosystem (CISEE), particularly around Bangalore, (b) the role of the State (and the institutional entrepreneurs) and the timing of the STI policy oriented to the software industry, (c) the growing influence of global players such as the World Bank, the Indian American argonauts and multinational enterprises, and (d) the U.S. offshoring opportunities and the growing Indian domestic demand. We discuss these processes with a wider relevance for theoretical and policy advancement in Global South settings.

Suggested Citation

  • Manuel Gonzalo & Hugo Kantis, 2021. "The Indian venture capital emergence, development, and boom: A southern contextualization," Growth and Change, Wiley Blackwell, vol. 52(2), pages 687-705, June.
    • Handle: RePEc:bla:growch:v:52:y:2021:i:2:p:687-705
    DOI: 10.1111/grow.12495
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/grow.12495
    Download Restriction: no
    File URL: https://libkey.io/10.1111/grow.12495?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Balaji Parthasarathy, 2010. "The computer software industry as a vehicle of late industrialization: lessons from the Indian case," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 15(3), pages 247-270.
    2. Keun Lee & Tae Young Park & Rishikesha T. Krishnan, 2014. "Catching-up or Leapfrogging in the Indian IT Service Sector: Windows of Opportunity, Path-creating, and Moving up the Value Chain," Development Policy Review, Overseas Development Institute, vol. 32(4), pages 495-518, July.
    3. Yoguel, Gabriel & Borello, José Antonio & Erbes, Analía, 2009. "Argentina: cómo estudiar y actuar sobre los sistemas locales de innovación," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    4. Sunil Mani, 2009. "Growth of Knowledge-intensive Entrepreneurship in India, 1991-2007," WIDER Working Paper Series RP2009-49, World Institute for Development Economic Research (UNU-WIDER).
    5. Helena M. M. Lastres, 1994. "Advanced Materials Revolution," Palgrave Macmillan Books, in: The Advanced Materials Revolution and the Japanese System of Innovation, chapter 4, pages 58-80, Palgrave Macmillan.
    6. Wright, Mike & Lockett, Andy & Pruthi, Sarika, 2002. "Internationalization of Western Venture Capitalists into Emerging Markets: Risk Assessment and Information in India," Small Business Economics, Springer, vol. 19(1), pages 13-29, August.
    7. Sharif, Naubahar, 2006. "Emergence and development of the National Innovation Systems concept," Research Policy, Elsevier, vol. 35(5), pages 745-766, June.
    8. Kenney, Martin & Dossani, Rafiq, 2001. "Creating an Environment: Developing Venture Capital in India," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt6z47h77n, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
    9. Balaji Parthasarathy, 2004. "India's Silicon Valley or Silicon Valley's India? Socially Embedding the Computer Software Industry in Bangalore," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 28(3), pages 664-685, September.
    10. Colin Mason & Richard Harrison, 2006. "After the exit: Acquisitions, entrepreneurial recycling and regional economic development," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 55-73.
    11. Manuel Gonzalo & Juan Federico & Sergio Drucaroff & Hugo Kantis, 2013. "Post-investment trajectories of Latin American young technology-based firms: an exploratory study," Venture Capital, Taylor & Francis Journals, vol. 15(2), pages 115-133, April.
    12. Hugo Kantis & Pablo Angelelli, 2006. "El proceso de creación de empresas basadas en el conocimiento en América Latina: una visión comparada," EKONOMIAZ. Revista vasca de Economía, Gobierno Vasco / Eusko Jaurlaritza / Basque Government, vol. 62(02), pages 240-265.
    13. Dharish David & Sasidaran Gopalan & Suma Ramachandran, 2021. "The Startup Environment and Funding Activity in India," World Scientific Book Chapters, in: Farhad Taghizadeh-Hesary & Naoyuki Yoshino & Chul Ju Kim & Peter J Morgan & Daehee Yoon (ed.), Investment in Startups and Small Business Financing, chapter 7, pages 193-232, World Scientific Publishing Co. Pte. Ltd..
    14. Helena M. M. Lastres, 1994. "The Advanced Materials Revolution and the Japanese System of Innovation," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-23521-6, October.
    15. AnnaLee Saxenian & Charles Sabel, 2008. "Roepke Lecture in Economic Geography Venture Capital in the “Periphery”: The New Argonauts, Global Search, and Local Institution Building," Economic Geography, Taylor & Francis Journals, vol. 84(4), pages 379-394, October.
    16. Helena Maria Martins Lastres & José Eduardo Cassiolato, 2017. "Development and innovation: learning from the legacies of Freeman and Furtado," Innovation and Development, Taylor & Francis Journals, vol. 7(2), pages 271-286, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Manuel Gonzalo, 2023. "The Indian Growth Acceleration: A Brazilian Demand-led Insight," Millennial Asia, , vol. 14(4), pages 509-534, December.
    2. Rhiannon Pugh & Jana Schmutzler & Alexandra Tsvetkova, 2021. "Taking the systems approaches out of their comfort zones: Perspectives from under explored contexts," Growth and Change, Wiley Blackwell, vol. 52(2), pages 608-620, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. José E. Cassiolato & Helena M. M. Lastres, 2008. "Discussing innovation and development: Converging points between the Latin American school and the Innovation Systems perspective?," Globelics Working Paper Series 2008-02, Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management.
    2. Riccardo Crescenzi & Andrés Rodríguez-Pose, 2012. "An ‘Integrated’ Framework For The Comparative Analysis Of The Territorial Innovation Dynamics Of Developed And Emerging Countries," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 517-533, July.
    3. Kim, Yong Jin & Lee, Duk Hee, 2020. "Technology convergence networks for flexible display application: A comparative analysis of latecomers and leaders," Japan and the World Economy, Elsevier, vol. 55(C).
    4. Suneel Kunamaneni, 2019. "CHALLENGES IN MOVING FROM INCREMENTAL TO RADICAL LOW-COST INNOVATION IN EMERGING AND TRANSITION COUNTRIES: Institutional Perspectives Based on Rechargeable Battery Innovation in China and Point-of-Use," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(03), pages 1-36, April.
    5. Helena Maria Martins Lastres, 2017. "Development, innovation, sustainability and policies: Chris Freeman's legacy," Globelics Working Paper Series 2017-02, Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management.
    6. Noriyuki Doi, 1996. "R&D Strategy-Makings in Japanese Large Firms: Evidence from Questionnaire Survey," Discussion Paper Series 10, School of Economics, Kwansei Gakuin University, revised Apr 1996.
    7. Arun Natarajan Hariharan & Arindam Biswas, 2020. "A Critical review of the Indian knowledge‐based industry location policy against its theoretical arguments," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 431-454, June.
    8. Jonas Heiberg & Bernhard Truffer, 2021. "The emergence of a global innovation system – a case study from the water sector," GEIST - Geography of Innovation and Sustainability Transitions 2021(09), GEIST Working Paper Series.
    9. Suma Athreye & Martha Prevezer, 2008. "R&D offshoring and the domestic science base in India and China," Working Papers 26, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    10. Patzelt, Holger & zu Knyphausen-Aufseß, Dodo & Fischer, Heiko T., 2009. "Upper echelons and portfolio strategies of venture capital firms," Journal of Business Venturing, Elsevier, vol. 24(6), pages 558-572, November.
    11. Lander, Bryn & Atkinson-Grosjean, Janet, 2011. "Translational science and the hidden research system in universities and academic hospitals: A case study," Social Science & Medicine, Elsevier, vol. 72(4), pages 537-544, February.
    12. Schertler, Andrea & Tykvová, Tereza, 2011. "Venture capital and internationalization," International Business Review, Elsevier, vol. 20(4), pages 423-439, August.
    13. Hyeonchae Yang & Woo-Sung Jung, 2015. "A strategic management approach for Korean public research institutes based on bibliometric investigation," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(4), pages 1437-1464, July.
    14. Souzanchi Kashani, Ebrahim & Roshani, Saeed, 2019. "Evolution of innovation system literature: Intellectual bases and emerging trends," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 68-80.
    15. Soete, Luc & Verspagen, Bart & ter Weel, Bas, 2010. "Systems of Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1159-1180, Elsevier.
    16. Dodgson, Mark & Hughes, Alan & Foster, John & Metcalfe, Stan, 2011. "Systems thinking, market failure, and the development of innovation policy: The case of Australia," Research Policy, Elsevier, vol. 40(9), pages 1145-1156.
    17. Garry D. Bruton & Vance H. Fried & Sophie Manigart, 2005. "Institutional Influences on the Worldwide Expansion of Venture Capital," Entrepreneurship Theory and Practice, , vol. 29(6), pages 737-760, November.
    18. Julia Naranjo-Valencia & Ricardo Vidal-Patiño & Gregorio Calderón-Hernández, 2019. "Characterization of Innovation Research Published in Latin American Journals Indexed in WoS," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(07), pages 1-38, November.
    19. Jana M. Kleibert & Laura Mann, 2020. "Capturing Value amidst Constant Global Restructuring? Information-Technology-Enabled Services in India, the Philippines and Kenya," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(4), pages 1057-1079, September.
    20. Yang, Hyeonchae & Jung, Woo-Sung, 2016. "Structural efficiency to manipulate public research institution networks," Technological Forecasting and Social Change, Elsevier, vol. 110(C), pages 21-32.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:growch:v:52:y:2021:i:2:p:687-705. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0017-4815 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.