Knowledge transfer and innovation for a Western multinational company in Chinese and Indian technology clusters

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Western Multinational Companies face challenges in successfully innovating within emerging markets compared to local and global Asian competitors. This research defines and explains the specific knowledge transfer mechanisms at the local level in contrast to Western countries, focusing on how these companies integrate knowledge from culturally different environments. The study examines four significant clusters in China and India—Bangalore, Beijing, Shanghai, and Shenzhen—highlighting the cross-cultural challenges faced by Western MNCs. A retrospective analysis of successful innovations and the key actors involved in the innovation process within each cluster serves as the foundation for this research. Interviews with these key agents reveal crucial knowledge transfer mechanisms that contribute to successful innovations in these diverse economic, cultural, and social contexts. The findings lead to a new typology of clusters in both emerging and developed countries. Additionally, the research emphasizes both formal and informal knowledge transfer mechanisms for effective communication and integration of knowledge from foreign subsidiaries to headquarters. This comprehensive approach offers new insights into the innovation strategies and organizational structures that Western MNCs must adopt to achieve success in Asia.