Open Innovation

Open Innovation and Software Outsourcing

In an era of rapid technological advancement, open innovation is a beacon of collaborative growth and shared prosperity. This is particularly true in the evolving relationship between Swedish and Indian software outsourcing companies. Remarkable results can be achieved when these two cultures join forces with their distinct and complementary strengths. However, unlocking this potential hinges on bridging the cultural gap and fostering open innovation, which encourages sharing and collaboration of ideas, technology, and resources for mutual growth.


This year India and Sweden celebrate 75 years of bilateral relationship. In addition, Sweden holds the presidency of the Council of the European Union, and India holds the presidency of the G20. Therefore, this is a year when unique opportunities exist to build new and stronger relationships. India is presently emerging as a country with a firm growth trajectory, the fastest-growing larger economy in the world.

Swedish and Indian cultures offer a few striking differences. However, despite these differences, businesses are forging successful partnerships between Sweden and India. A collaboration between Sweden and India can yield remarkable results, given their contrasting yet complementary strengths, particularly in software outsourcing and BPO. However, this collaboration’s success hinges on bridging the cultural gap. In addition, to get the full value-added, there is a need to foster open innovation. This practice encourages sharing and collaboration of ideas, technology, and resources between organisations for mutual growth.

In this article, we will propose that it is essential to not only outsource tasks to Indian software companies but also engage and build relationships where the collaborating parties contribute to the creative processes. This approach will give the Indian developers a feeling of ownership, essential for getting more value.

Fostering open innovation in the relationship between Swedish clients and Indian software companies presents a promising area which would help the Indian software partner to add more value. To get there, there is a need to understand the cultural differences and how the differences complement each other. By cultivating a culture of shared knowledge, resources, and innovation, these partnerships can bolster their growth and contribute more effectively to the success of both parties.

Understanding and respecting each other’s cultural nuances will be vital in navigating this journey successfully. To navigate this cultural minefield effectively, it’s crucial to understand both cultures’ key aspects and develop strategies to bridge the divide.

Open Innovation

In the rapidly evolving software industry, open innovation is a concept that holds significant potential. It involves the sharing and collaboration of ideas, technology, and resources between organisations, fostering a culture of shared growth and mutual benefit.

In a Swedish-Indian partnership, this could be a game-changer. While Swedish software firms are renowned for their structured innovation processes, high levels of digitisation and advanced technology, Indian companies are applauded for their flexible problem-solving approach, rapid scalability, and abundant talent pool.

Open innovation allows Swedish firms to tap into India’s agile and resourceful software solutions, which are often designed to operate efficiently within resource-constrained environments. This ‘Jugaad’ approach to innovation can bring speed, flexibility, and cost-effectiveness to Swedish software development processes.

Conversely, Indian firms can benefit from Swedish companies’ systematic and meticulous approach. Access to advanced technologies and exposure to stringent quality control processes can help Indian software firms elevate their standards of operation and deliverables.

Moreover, open innovation could lead to a cross-pollination of work ethics and managerial practices. Swedish firms could learn from the strong hierarchical respect and team cohesion often seen in Indian companies. In contrast, Indian firms could imbibe the flat organisational structure, equality, and work-life balance inherent in Swedish culture.

For successful open innovation, both parties must foster an environment of trust and mutual respect. Intellectual property rights must be respected, and a system that encourages and rewards the sharing of ideas should be instituted.

Respect for Hierarchy vs Flat Structure:

One of the fundamental differences between the Indian and Swedish cultures is the perception of hierarchy. In India, businesses traditionally operate with a hierarchical structure where decisions are made at the top, and employees look to their superiors for guidance. On the other hand, Sweden is known for its ‘flat’ organisational structure, where decision-making is often decentralised, and employees are encouraged to be independent and proactive.

To bridge this gap, it’s crucial for Swedish managers working with Indian teams to offer clear directions and make assertive decisions. This doesn’t come easy for a Swedish manager being used to consensus decisions. Conversely, Indian businesses working in Sweden should encourage initiative and independence among their groups.

Relationship Orientation vs Task Orientation:

Indians place a high value on relationships and trust-building. Personal relationships often form the basis of business partnerships. Contrastingly, Swedes typically adopt a more task-oriented approach, focusing on efficiency and the task at hand.

Swedish managers working with Indian teams should invest time in relationship-building activities. This could include participating in social events, understanding and respecting Indian customs, and taking a personal interest in the lives of their team members. On the other hand, Indian businesses working in Sweden should appreciate the Swedish focus on efficiency and the separation of personal and professional lives.

Jugaad vs Systematic Innovation:

The Indian concept of “Jugaad” represents a resourceful, innovative, and flexible approach to problem-solving. This contrasts with the Swedish approach, which is often more systematic, planned, and structured.

Recognising these differing approaches to innovation can help manage expectations and foster creativity. Swedish businesses can harness the ‘Jugaad’ spirit of their Indian teams to encourage out-of-the-box thinking. Conversely, Indian companies can learn from the systematic and structured approach to innovation in Sweden.

The Concept of ‘Face’:

In India, like many Asian cultures, maintaining one’s reputation or ‘face’ is essential. Direct criticism, especially in public, is often avoided to prevent ‘loss of face.’ On the other hand, Swedes value transparency and directness, even if it involves criticism. Having said that, Swedes are often scarred by open conflict and may not always be direct when criticising. This may sound contradictory, and maybe it is. But no culture is simple. This may mean that Indians don’t understand when Swedes are giving criticism or the seriousness of it.

Swedish managers should be mindful of this cultural nuance when providing feedback to their Indian teams. Feedback should be constructive, and public criticism should be avoided. Indian businesses working in Sweden should respect the Swedish value of directness and transparency. But Indians must also learn to understand the subtleness of Swedish criticism and the need to avoid conflicts.

Motivation and Attrition:

Indian employees value career development opportunities, challenging work, and regular feedback. In contrast, Swedish employees place a high value on work-life balance and equality.

To retain talent, businesses should focus on the factors that motivate their teams. Swedish companies in India should provide ample career development opportunities and regular feedback. Indian firms in Sweden should ensure work-life balance and equality in the workplace.

In conclusion, while the differences between Indian and Swedish cultures are significant, they are not insurmountable. By understanding these cultural nuances, businesses can develop strategies that enable successful collaboration. Ultimately, the key is to maintain respect and openness towards the other culture and to view the differences not as barriers but as opportunities for learning and growth.


In an era where technological advancements are redefining how businesses operate and succeed, open innovation emerges as a beacon of collaborative growth and shared prosperity. The Sweden-India software outsourcing partnership is a compelling example of how embracing this concept can create a win-win situation.

This partnership synergistically combines Swedish firms’ structured innovation processes, high digitisation levels, and advanced technology with the agile problem-solving approach, rapid scalability, and abundant talent pool of Indian software companies. This confluence of strengths holds immense potential for delivering transformative solutions that can shape the software industry’s future.

However, the key to unlocking this potential lies in understanding and respecting the cultural nuances that make each party unique. From differing perceptions of hierarchy and task orientation to contrasting approaches to innovation and feedback, these cultural differences can pose challenges. But they also provide a rich tapestry of insights and perspectives that can stimulate out-of-the-box thinking and creativity.

As the world watches Sweden chairing the European Union and India leading the G20, it’s an opportunity to demonstrate how open innovation can strengthen international relationships and contribute to global economic growth.  Swedish and Indian software outsourcing companies can play a significant role. By fostering open innovation, these companies can increase their value. They can also become a global model of successful collaboration.

It is not just about outsourcing tasks; it is about creating a symbiotic relationship that harnesses each other’s strengths, respects cultural nuances, and cultivates an environment of shared knowledge, resources, and innovation. As businesses navigate the complexities of this partnership, they should view cultural differences not as barriers but as bridges to mutual understanding, respect, and growth. This approach will enable them to maximise the value derived from software outsourcing. Doing so will contribute to outstanding success.

Gislen Software has extensive experience bridging the gap between Swedish and Indian cultures. Speak to us about how you can take the next step to foster open innovation. We also help you to understand and mitigate cultural challenges!

A lot of ideas for this article came from a thesis about open innovation by Petra Edoff.

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