What enables innovation in the private sector? Lessons from the development of salt-tolerant hybrid rice

Under what circumstances can a private company succeed in developing new crops? This paper examines the experience of an Indian seed company that sought to use an advanced new technology (molecular breeding) to develop a salt-tolerant form of hybrid rice. It demonstrates that the company's success was made possible by its effective linkages with national and international institutions, which mean that the company received indispensable inputs to its work; namely DNA sequence data from the global public domain and germplasm from the Indian public sector. Provision of these inputs was not mediated by a market system: indeed, recent changes that tend to make such interactions subject to market forces, notably the commodification of germplasm, have increased transaction costs and been a source of inefficiency. At the same time, the internal characteristics of different parts of the firm meant that (i) a number of technically demanding tasks were successfully completed; but (ii) progress was slower than could reasonably have been expected and (iii) at one point the project suffered a severe setback. These experiences confirm the innovation systems framework and also highlight the critical importance of the internal culture of a firm in determining success or failure in innovation. Interestingly, they also demonstrate that key aspects of organisational culture may vary between different parts of the same company. Copyright © 2007 John Wiley & Sons, Ltd.