NASSCOM BCG Innovation Report 2007 Executive Summary

fi rm’s competitive advantage. Sustaining innovations help fi rms maintain their current position
in the market. Enhancing innovations, on the other hand, help a fi rm gain a clear advantage
over its peers within the ambit of market boundaries. Finally, breakthrough innovations can help
a fi rm to redefi ne the market boundaries and create unique ‘blue ocean’ strategic spaces for
itself. On the second dimension, i.e., area of innovation, fi rms can make three broad choices –
the inputs to the fi rm, the business processes of the fi rm and the market-facing areas like
delivery and business models, products and services.
Current footprint for the Indian IT-ITES industry leaves scope for improvement
Exhibit 2
The current innovation footprint of the Indian IT-ITES industry as outlined in Exhibit 2 above, is
heavily skewed away from market-facing and breakthrough innovation efforts and is focussed
predominantly on sustaining, and some enhancing, innovations on inputs and business processes.
While sustaining innovations are important, only a signifi cant shift towards more market-facing
breakthrough and enhancing innovations will provide the necessary revenue impetus in the medium to
long-term. There are several areas of innovation which can address this need, for instance:
• Penetrating new customer segments in intellectual asset-intensive service lines like
engineering and R&D services
• Creating IP in emerging technology areas
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