My friends are joking, even nowadays, about my first and only trial to contribute to one girly conversation, saying: “The world is globalizing. The main shopping streets in capital cities are so similar, that you almost can not distinguish one city from another anymore only by looking at the brands.”

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Looking at globalization one way or another (I will put the innovation hat in this post), globalization brings several opportunities and pressures for domestic firms in emerging market economies to innovate and improve their competitive position, as well as highly influences the transfer of capabilities. There is large amount of theory on this, but that is only one variable of what globalization does to innovation.

What I was more intrigued from, is the globalization of the PROCESS of innovating. In this post, I would like to feature part of a highly descriptive story, on this topic, in the book “The World is Flat” – T.L.Friedman, which goes:

“If I have a granddaughter one day, and I tell her I’m going to India, will she say, “Grandpa, is that where software comes from?” No, not yet, honey. Every new product-from software to widgets-goes through a cycle that begins with basic research, then applied research, then incubation, then development, then testing, then manufacturing, then deployment, then support, then continuation engineering in order to add improvements. Each of these phases is specialized and unique, and neither India nor China nor Russia has a critical mass of talent that can handle the whole product cycle for a big American multinational. But these countries are steadily developing their reseach and development capabilities to handle more and more of these phases. As that continues, we really will see the beginning of what Satyam Cherukuri, of Sarnoff, an American research and development firm, has called “the globalization of innovation” and an end to the old model of a single American or European multinational handling all the elements of the development product cycle from its own resources. More and more American and European companies are outsourcing significant research and development tasks to India, Russia, and China.”

I would just say that regardless of the new truth about the global shift caused by cheap outsourcing offerings, I’m glad that parts of the process of innovation has been tackled for outsourcing and have been structured to details, enabling an outsourcing approach.  What I’m also glad for, is that the global innovation playing field is being leveled.

T.L.Friedman continues with some statistics about this phenomena: “According to the information technology office of the state government in Karnataka, where Bangalore is located, Indian units of Cisco Systems, Intel, IBM, Texas Instruments, and GE have already filed 1,000 patent applications with the U.S. Patent Office. Texas Instruments alone has had 225 U.S. patents awarded to its Indian operation. “The Intel team in Bangalore is developing microprocessor chips for high-speed broadband wireless technology, to be launched in 2006,” the Karnataka IT office said, in a statement issued at the end of 2004, and “at GE’s John F. Welch Technology Centre in Bangalore, engineers are developing new ideas for aircraft engines, transport systems and plastics.” Indeed, GE over the years has frequently transferred Indian engineers who worked for it in the United States back to India to integrate its whole global research effort. GE now even sends non-Indians to Bangalore.”

Enjoy this video if you haven’t read the book!