Role of foreign MNCs in technological activities of India’s IT services industry: an analysis from patent granted data

ABSTRACT India has now become one of the biggest sourcing countries for engineers and scientists. More than 25 per cent of all worldwide patent sourcing by the US companies has at least one inventor from India or China. This paper is a fresh attempt to discuss different aspects of measuring technological activities of Indian IT services industry with the help of detailed patent granted data, particularly first name inventor (FNI). The Indian IT industry has experienced several transformations. After the economic reforms of 1991, the presence of foreign MNCs in this industry started rising. Presently, the industry is dominated by foreign MNCs in terms of patent applications, the patent granted, and software exports. The study found that more than 50 per cent of patents granted to IT companies by the USPTO has at least one First Name Inventor from India. Results also show that the industry has become the world’s largest sourcing destination for foreign MNCs. Today, almost all big foreign MNCs from all over the world, including IBM, Apple, Qualcomm, Samsung and Nokia have established their subsidiary in India. Bangalore has become the most desired destinations for foreign MNCs.