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Linking Innovation Ecosystems Across National Boundaries Symposium

The challenge of linking innovation ecosystems across national boundaries ensuring win-win outcomes for both countries and avoiding the significant potential perils is the focus of this video. The two countries considered are U.S.A and India. The negative strategic and long-term viability implications for firms engaging in "high-end" outsourcing, involving domain and technological knowledge, are addressed. The distinguished speakers and their key observations are listed below.

Raj Chengappa -- Managing Editor, India Today.

Mr. Chengappa highlights the:

  1. Rapid growth in the Indian economy, particularly in the IT sector
  2. Major discontinuities, breaks from past trends, that are happening now
  3. Impact of government involvement
  4. trong and increasing interdependence between the U.S. and India, on educational, economic and political fronts.

C. K. Prahalad, Ph.D. -- Paul and Ruth McCracken Distinguished University Professor of Corporate Strategy, Ross School of Business, University of Michigan

Professor Prahalad suggests that:

  1. The traditional view of outsourcing is obsolete and wrong; the arena is shifting from:
    • Exporting Jobs to Importing Competitiveness
    • Cost Arbitrage to Innovation Arbitrage
    • Tactical Decisions to Strategic Imperatives
    • Independence to Interdependence
  2. Ecosystems (that incorporate universities, venture capital, diverse services, large and small firms, a highly developed diverse skill base, large numbers of start ups, committed leadership and an enabling regulatory environment) are the key to innovation
  3. Global ecosystems are evolving
  4. Multi-industry ecosystems (industry convergence) are emerging
  5. Dramatic progress up the knowledge chain is taking place
  6. New business models are emerging
  7. The end of asymmetry between the haves and have-nots can be perceived to be taking place as a result of the spread of information technology
  8. There is a "fortune at the bottom of the pyramid"
  9. India is changing dramatically in terms of:
    • Achieving a world-class combination of cost, quality, technology and innovation
    • The number of technology start ups
    • The emergence of mini-multinationals
    • Growing FDI
    • Advanced pharmaceutical and semiconductor manufacturing capability
    • Award-winning manufacturing quality
    • An efficient and profitable auto components industry
    • A unique and potentially explosive geographic juxtaposition of IT and automobile eco systems
    • Eliminating the asymmetries of Information, choice, capacity to enforce contracts, and dignity and self esteem.
  10. Project management skills and intercultural competence will be increasingly needed
  11. Outsourcing is not the issue or the point, the challenge is one of global resource leverage.

Vijendra N. Asopa, Ph.D. -- Professor, Indian Institute of Management, Ahmedabad

Professor Asopa observes that:

  1. The changes taking place are "unbelievable" in terms of both rapidity and magnitude
  2. Indian companies are "moving up the value chain" -- accumulating both domain knowledge and business expertise
  3. Retention of experienced personnel is the key
  4. Global research networks are being developed
  5. Outsourcing can also limit innovation, because of the loss of connection with local markets
  6. Leadership development and the ability to handle culture change are key
  7. Different levels of leadership responsibility need different values and competencies
  8. Educational alliances could be productive

V. Kalyanaraman, Ph.D. -- Professor, Indian Institute of Technology, Madras

Profession Kalyanaraman proposes that:

  1. High-end outsourcing (paradoxically) is the way to ensure sustainability
  2. Win-win approaches have to be designed and managed and will not happen if high-end outsourcing is merely an expedient response
  3. Suitably designed alliances can offer mutual benefits
  4. A SWOT analysis of the U.S. and India in the context of high-end outsourcing suggests a variety of issues and concerns
  5. More research is needed to understand and implement win-win approaches

Stephen Nesmith - Former Assistant Secretary of HUD and Commerce Department, and Principal, Blank Rome Government Relations LLC

Mr. Nesmith remarks that:

  1. "Outsourcing" is and will continue to be the focus of a "hot, torrid and robust" dialogue
  2. It is difficult but necessary to initiate a rational and comprehensive discussion of high-end outsourcing
  3. Thinking that academia con provide a sheltered context for generating discussion and consideration of issues is naïve
  4. It is critically important to engage policy makers in the dialogue

Arvind Panagariya, Ph.D. - Jagdish Bhagwati Professor of Indian Political Economy, Columbia University

Professor Panagariya asserts that:

  1. India's share of the global market in most categories of software services, except applications development, is small
  2. From an economist's point of view no quantum changes are likely
  3. The challenges of widespread poverty, inadequate higher education and poor infrastructure in India are daunting
  4. Innovation will happen close to major markets and the U.S. is by far the largest market
  5. Significant high-end outsourcing, if it happens at all, will happen in the distant future

Sunil Wadhawani - Founder and President, iGate Corporation

Mr. Wadhwani mentions that;

  1. iGate is a local (Pittsburgh) start up that has grown rapidly in four continents and is beginning to engage in high-end work in India
  2. Outsourcing is a competitive imperative that can be motivated by:
    • Cost pressure
    • Flexibility advantages
    • Focus on core processes and high-value work
    • Innovation that can be bought
  3. There are major pitfalls in outsourcing:
    • Failure to transform from supplier management to partner relationship capability
    • Not integrating outsourced processes with retained processes
    • Absence of clear accountabilities
    • Ineffective governance
    • Failure to communicate strategy and business outcomes
    • Absence of service management process and discipline
  4. Successful operating models have appropriately designed:
    • Governance components
    • Value creating components
    • Enabling components
  5. There are three levels and foci of partner relationships:
    • Functional
    • Profess
    • Business Value
  6. The operating model should be transformed from:
    • Managing Operations to Managing Outcomes
    • Managing Processes to Managing Process Impact
    • Managing Consumption to Managing Demand
    • Procurement to Strategic Sourcing
    • Vendor Management to Partner Relationship Management
    • Independent Solutions to Collaborative Solutions
    • Focus on Cost to Focus on Value
    • Operational Data to Management Information