Academic journal article International Journal of Business and Management Science

MNCs, Global Innovation Networks and Developing Countries: Insights from Motorola in China

Academic journal article International Journal of Business and Management Science

MNCs, Global Innovation Networks and Developing Countries: Insights from Motorola in China

Article excerpt

INTRODUCTION

This paper is concerned with the temporal and spatial dynamics of foreign MNCs innovative activities in developing countries. Not many years ago research on multinational corporations' (MNCs) strategies for developing countries was the domain of development scholars only. MNCs were seen mainly--if not solely as agents that exploited the existence of an abundant and cheap labor force. Focus was primarily on the derived effects on the national economies. The emergence of the first and second generation East Asian tiger countries did not change t his much. Yet, today the situation is significantly different. There is now a large and valuable stream of research on MNCs global strategies (Bartlett and Ghosal, 1991). Thematically, this includes research on how and when the MNCs should adapt to local circumstances, when to outsource and off/-onshore (Vang and Overby, 2006; Mahnke et al., 2005), under which conditions to engage in M&A's or Greenfield investments, the evolution of MNCs governance structures (Peng 2003), the impact of cultural differences of their local strategies (Hofstede, 2001), issues stemming from coordination across borders and time zones, fragmentation of value chains, impact of host and home innovation systems (Lundvall et al., 2006), etc. Theoretically, the research draws on transaction cost economics (Williamson, 1999), the knowledge or resource-based view of the firm (Barney 1991; Prahalad and Hamel, 1991), Porter's (1980) strategizing and/or more explicit MNCs theories (Dunning, 1988, 1993, 1995 and Vernon, 1966). A new stream of research has even started to conceptualize the specificities of third world MNCs (Matthews, 2002; Yeung and Olds, 2000).

However, most of this research is concerned with the increasing globalization of production and the role of developing countries in global production networks (GPN). Recently, some leading researchers have started to pa y attention t o globalization of innovation (Florida, 1997; Greybadze and Reger, 1999; Kuemmerle, 1999; Narula and Zanfei, 2003), but almost not to the role of developing countries in the MNCs (new) global innovation networks (GINs). And almost no research has unpacked temporal and spatial dynamics of the role of the R&D subsidiaries in developing countries (for good exceptions, Gassmann and Han, 2004; Von Zedtwitz, 2004; Sun, 2003; Sun and Wen, 2007; Chen, 2006). That is how MNCs starts with particular R&D activities in one location in a developing country, how the nature, type and size changes over time and how this leads to new location strategies within the country.

By providing and in-depth case that analyzes why Motorola located their R&D subsidiaries in China as part of their GIN, how the nature of the R&D changes over time and how and why new regions in China are included in Motorola's GIN this pa per aims at shedding light on an ignored phenomenon. The paper is essentially empirical and inductive in nature but uses the insights to highlight theoretical implications. While focus is on Motorola it is not a 'unique' example. Other well-known MN Cs a s IBM, Intel, Microsoft, Nokia, Ericsson, SAP, Samsung and Matsushita have all started to set up R&D subsidiaries in China as part of their GINs. While China and other developing countries might not attract a large share of the MNCs GINs (measured as their percentage of total R&D) it is a growing phenomenon which we need to unpack in greater details to capture the contours of 'tomorrows' GINs.

The data used in this study was obtained from one of the authors fieldwork in China in June-September 2001, September 2002-January 2003 and June 2005 (Chen, 2007). The main source of data came from 25 informants from Motorola. Each of the informants was interviewed for a round 1-3 hours through semi-structured questions. Most of the participants were from the various research laboratories. Some were from the business arm (sales and business development). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.