Developing the Knowledge Creation Capability for Innovation – the Case of the Indian Pharmaceutical Industry

In the globalised era, the ability of firms to reconfigure existing competencies and create new knowledge for innovation has become a strategically important capability. In the emerging environment, firms will have to create knowledge for innovation by acquiring the necessary new knowledge and combining it with the existing knowledge base. This research explores the approaches used by Indian pharmaceutical firms to combine existing accumulated knowledge from imitative R&D with new knowledge in order to develop innovative R&D as a response to the World Trade Organisation agreement. The analysis shows that personnel transfer plays a crucial role and is thus a primary mechanism for acquiring knowledge for innovative R&D. Complementary to this, is the network model of collaborative R&D, in augmenting innovative capabilities. This research provides insight into the processes involved in the reconfiguration of existing capabilities to develop new knowledge for innovation and which have wider implications for firms in other developing countries.