Resource-Constrained Innovation for Emerging Economies: The Case of the Indian Telecommunications Industry

Abstract

A daunting challenge that enterprises face today is how to design and diffuse innovations to effectively tap into local demand in emerging country markets. Although extant literature focuses on the dominant innovation models of multinational enterprises from developed countries, little attention is directed to carefully examining the alternative models of innovation offered by local players from emerging markets. The aim of our study was to gain an in-depth insight toward understanding ¿what kind of innovation models effectively suit emerging markets needs"? Using the case of an indigenous enterprise, Centre for Development of Telematics from India, we demonstrate how the emphasis on developing affordable and locally sustainable products has provided an alternative model of resource-constrained innovation in the telecommunications sector. The three critical factors for innovation were identified as: entrepreneurial leadership and vision; modular designs to meet user demands of affordability, functionality, and operability through architectural innovation; and exploitation of the local knowledge base and the creation of local innovation clusters. Our study provides insights into the labor-intensive, but capital-sensitive, processes involved in shaping and managing technology development and diffusion to meet the unique demands of mass markets in emerging economies.