Offshore outsourcing and innovation capabilities in the supply base: Evidence from software firms in Bangalore

This paper contributes to the growing body of literature concerned with the global redistribution of innovative capacity towards the emerging economies. It does so by asking whether Indian software firms have developed significant innovation capabilities. It draws on evidence from ten software service suppliers in Bangalore (India) and the examination of key change events within these firms. The study finds evidence of deepened capabilities for significant – ‘problem framing’ – innovation in India. The findings challenge the predominant view about outsourcing and innovation capability in Indian software industry. It also challenges existing perspectives in the broader literature on the acquisition of innovation capabilities by suppliers in global value chains.