The innovation management strategy governs the innovation through a knowledge management process. Knowledge management strategy excels in decision making and innovative performance to achieve industrial goals as market advantage and prime value. The market advantage is an intellectual asset enriched with technological, intellectual and legal standards positioned dominantly in the market to command prime market value. Knowledge led innovation establishes core competencies: entrepreneurial capital to acquire market advantage to earn profits. Intellectual capital is utilized to build up a domain knowledge and information systems to be utilized for creation of exclusive technologies to fulfill market needs to optimize market value. Technological capital provides a platform to share knowledge-technology-information productively to establish industrial standards in market assets. The stakeholder capital extends social responsibility for ethical practices to share socio-economic returns. They provide impetus to reach industrial standards in productivity, profitability, exclusivity and socio-economic returns. Application of industrial knowledge, tacit and explicit has technological innovation capability to define intellectual assets and its sustenance depends on the background of tacit knowledge. Empirical investigation led to unearth a holistic management theory on innovation management for the local IT industry. The investigation is drawn from in-depth interviews of experienced practitioners managing the industries. A qualitative inquiry to understand industry environmental phenomenon and a quantitative inquiry on industrial performance and value generation were undertaken to facilitate data reduction and visualize competitive measures to achieve optimum value. The research reveals the strategic need for core competencies to converge a knowledge domain, technological capabilities and information systems to collaborate higher knowledge value for premiumization of software. Industry concentration on knowledge domain for innovation in core business operations rather than functions will provide means to overcome competition. Lack of knowledge domain and technological capabilities are impediments to score over preeminent competitors. The need for a competitive strategy, policy remedies and regulatory efforts to carve a knowledge based industrial ecosystem is highlighted.