Globalization, the rise of biotechnology and catching up in agricultural innovation: The case of Bt technology in India

M. Iizuka, A. Thutupalli

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The agricultural sector has played an important role in the provision of
food, foreign exchange and sustainable energy to many developing
countries. This sector, however, has not been considered as a driving
force of innovation as compared to other productive sectors. However,
recent economics and international business literature suggests that the
agricultural sector (1) has become knowledge intensive with the rise of
biotechnology (Bt); and (2) is a sector where firms in developing
countries can play an important role in production and innovation due to
their latent advantage in the context-specific or in-situ knowledge
base. In this paper, we first present a conceptual framework that
characterizes the knowledge required for successful agricultural
innovation against the backdrop of globalization and rise of
biotechnology. We then examine the case of diffusion of Bt cotton
hybrids (Bacillus thuringiensis, an insect resistant seed technology) in
India to illustrate the dynamics of knowledge creation and catching up
by the local seed firms based on their interactions with global as well
as other local firms. Our analysis reveals that the local firms with
absorptive capacity, that is, the ability to effectively integrate
location-specific (in-situ knowledge) and generic scientific knowledge
(global knowledge) can catch up with global frontier technologies to
gain significant domestic market shares.
Original languageEnglish
Place of PublicationMaastricht
Publication statusPublished - 1 Jan 2014

Publication series

SeriesUNU-MERIT Working Papers

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