Academic journal article Management Revue

Internationalisation of R&D: New Insights into Multinational Enterprises' R&D Strategies in Emerging Markets **

Academic journal article Management Revue

Internationalisation of R&D: New Insights into Multinational Enterprises' R&D Strategies in Emerging Markets **

Article excerpt

1. Introduction

Due to the rapid internationalisation and disintegration of value chains, it has become imperative for firms at the forefront of technology development to reorganise and restructure innovation activities on a global scale. This article aims to provide a greater understanding of the complex and dynamic process of internationalisation of research and development (R&D) taking place in multinational enterprises (MNEs). The international business and management literature has been relatively silent about the actual internationalisation of R&D in MNEs, although this process has intensified immense- ly during the last decade (OECD, 2008, 2013). Burgeoning evidence shows that a momentous integration of knowledge activities from new locations beyond the Triad (US, Europe and Japan) is currently taking place. MNEs are extending R&D activities to host locations in emerging markets as part of their global innovation networks. This process has interested many but remains poorly understood. In light of this, a specific aim of this article is to explore R&D strategies and the drivers being deployed in emerging markets as part of firms' efforts to integrate R&D activities undertaken abroad. The article draws on an in-depth case study of Novozymes, a leading European MNE from a highly globalised sector (biotech) with eight R&D sites spanning eight countries. By specifically focussing on the R&D activities in the emerging markets of China, India and Brazil, the article delves into Novozvmes's current reorganisation of innovation.

The article draws attention to two gaps in the international business literature in the understanding of R&D strategies of MNEs. Firstly, while the extant literature has enriched our knowledge of the general trends in international R&D (Gammeltoft, 2006; Ernst, 2006; Patel & Pavitt, 1992; UNCTAD, 2005; Cooke, 2013) and on its various typologies (Ronstadt, 1978; Häkanson & Nobel, 1993; Archibugi & Iammarino, 1999; Pearce, 1999), the MNE R&D strategies abroad were presented in nar- row typologies (archetypes). For instance, according to these typologies, the establishment of foreign subsidiaries is connected to either home-base augmenting (F1BA) strategies (hereafter augmenting) or home-base exploiting (FIBE) strategies (hereafter exploiting) (Kuemmerle, 1999). According to Kuemmerle (1997, p. 61), who coined this dichotomy: "All foreign R&D sites fall into one of two categories and each type has different needs." Whether the two strategies can co-occur and eventually even shift frequently remains unclear. Given the speed of globalisation today, it seems likely that an MNE may use a combination of these strategies at its multiple locations and that its foreign subsidiaries may pursue these two strategies simultaneously. As a result, the exploitation/augmentation dichotomy, though convenient, may have resulted in an oversimplification of the R&D internationalisation that MNEs practise. Flence, we suggest that a more nuanced view of the static classification is relevant.

Secondly, while prior research has drawn on many perspectives, such as product life cycle (Vernon, 1966), incremental commitment (Johanson & Vahlne, 1977), sequential expansion (Kogut, 1983) and organisational learning (Kogut & Zander, 1993), to explain international strategies, the focus has mainly been on MNE entry strategies in foreign markets. Albeit, the few studies that draw on economic geography (Mudam- bi, 2008; Buckley & Ghauri, 2004; Haakonsson, Jensen, & Mudambi, 2013), the evolu- tion of global innovation networks in general and internationalisation of R&D strategies in particular have received limited attention (Herstad, Asiesen, & Ebersberger, 2014). As also pointed out by Blomkvist, Kappen, and Zander, (2010), evolutionary paths and potential limits to the development of technological capabilities at the foreign subsidiary level have not been fully explored. …

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.