Wednesday, July 24

Has Open Innovation Taken Root in India? Evidence from Startups working in Food Value Chains

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By Chandra Sekhara Rao Nuthalapati

Working Paper No- 417

Open innovation represents a paradigm shift in the technology development process from the advent of the New Millennium. Though evidenced mainly in technology-intensive sectors of developed countries, several ‘erosion factors’ and their interplay catalyse open innovation in relatively traditional sectors of developing countries. The rise of startups with supplementary venture capital industry is hypothesised to play this role in the Indian food system. This paper examines this hypothesis by leveraging a large database of startups. Several types of startups have come up in the last decade and are filling the gaps in the food value chains in infrastructure deficit regions and introducing innovations. The interconnections between startups themselves and their business partnerships with input companies, processors, aggregators, traders, hotels and restaurants, supermarkets, e-commerce companies, research organisations, various governments, international institutions like the World Bank, various crop associations like the tea growers association, constitute a complex web. The knowledge flows are both outbound from the startups to the companies and other actors and sometimes in the opposite direction as well as bi-directional. These fast expanding knowledge flows have brought several innovations that could not be imagined just a few years back in developing countries. The emergence of open innovation in agriculture bodes well to food value chain flows and to harness the higher level of technologies. There is a need to internalise these innovations in the national food policy for addressing issues of inclusion. The paradigm shift also calls for rigorous research on the business models, and collaboration and licensing agreements between companies, universities, and governmental agencies

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