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The Dragon vs the Elephant: Comparative analysis of innovation capability in the telecommunications equipment industry in China and India

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  • Sunil Mani

    (Centre for Development Studies)

Abstract

China and India have one of the largest telecommunications equipment markets in the world. The paper employs a sectoral system of innovation framework towards understanding the differential outcomes in innovation capability building in the industry achieved by China and India. The countries have pursued widely diverging strategies for developing their domestic innovation capability. India followed a very rigid policy of indigenous development of domestic technologies by establishing a stand-alone public laboratory that developed state-of-the art switching technologies. These were then transferred to manufacturing enterprises in both public and private sectors. The enterprises themselves did not have any in-house R&D capability. The public laboratory was also not given any strategic direction, even though it was technologically speaking, very competent. Consequently the country, despite possessing good quality human resource was unable to keep pace with changes in the technology frontier and the equipment industry has now become essentially dominated by affiliates of MNCs. China, on the contrary, first depended on MNCs for her technology needs in this area. But subsequently encouraged the emergence of three national champions, two of which are erstwhile public laboratories. The country has built up considerable hardware capability in both fixed line and mobile communications technology and has also emerged as a major player in world markets. Although the sectoral system of innovation in both the countries were promoted and nurtured by the state through a variety of instruments, the quality of such interventionist strategy is found to be better in China. The final outcome proves this line of argument.

Suggested Citation

  • Sunil Mani, 2005. "The Dragon vs the Elephant: Comparative analysis of innovation capability in the telecommunications equipment industry in China and India," Centre for Development Studies, Trivendrum Working Papers 373, Centre for Development Studies, Trivendrum, India.
  • Handle: RePEc:ind:cdswpp:373
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    References listed on IDEAS

    as
    1. Mothuri Venkatanarayana, 2005. "On the non-random distribution of educational deprivation of children in India," Centre for Development Studies, Trivendrum Working Papers 372, Centre for Development Studies, Trivendrum, India.
    2. Sunil Mani, 2007. "Keeping Pace with Globalisation: Innovation Capability in Korea’s Telecommunications Equipment Industry," Springer Books, in: Jörg C. Mahlich & Werner Pascha (ed.), Innovation and Technology in Korea, pages 255-286, Springer.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Lee, Keun & Malerba, Franco, 2017. "Catch-up cycles and changes in industrial leadership:Windows of opportunity and responses of firms and countries in the evolution of sectoral systems," Research Policy, Elsevier, vol. 46(2), pages 338-351.
    2. Rifat Sharmelly, 2016. "Innovation for Emerging Markets Confronting Institutional Environment Challenges: Perspectives from Visionary Leadership and Institutional Entrepreneurship," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(6), pages 108-108, May.
    3. Jue Wang & Shaoming Cheng & Sukumar Ganapati, 2012. "Path dependence in regional ICT innovation: Differential evolution of Zhongguancun and Bangalore," Regional Science Policy & Practice, Wiley Blackwell, vol. 4(3), pages 231-245, August.
    4. Keun Lee & Sunil Mani & Qing Mu, 2012. "Explaining Divergent Stories of Catch-up in the Telecommunication Equipment Industry in Brazil, China, India and Korea," Chapters, in: Franco Malerba & Richard R. Nelson (ed.), Economic Development as a Learning Process, chapter 2, Edward Elgar Publishing.

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    More about this item

    Keywords

    Innovation capability; China; India; Telecommunications industry; Digital switching systems; Mobile telephony;
    All these keywords.

    JEL classification:

    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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