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Internationalisation of R&D The local level Session report Stefan Kuhlmann, Fraunhofer ISI / Univ. Utrecht.

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Presentation on theme: "Internationalisation of R&D The local level Session report Stefan Kuhlmann, Fraunhofer ISI / Univ. Utrecht."— Presentation transcript:

1 Internationalisation of R&D The local level Session report Stefan Kuhlmann, Fraunhofer ISI / Univ. Utrecht

2 Raimo Lovio, Multinational corporations in a local perspective – the case of Varkaus in Finland Foreign-owned companies are doing well in Finland (profitability; management; R&D?) Varkaus: small industrial city, dominated by Ahlström (pulp&paper); 1985-2002 all units sold to international companies (S; DK; USA; A; CAN) Today in particular Honeywell active in Varkaus: originally wanted to place own product – but not successful. Instead: locally embedded and customized know- how turned out to be more productive and attractive Message: in favourable circumstances local business units may have some power vis-à-vis MNCs – at least with focus on customer-driven R&D Open questions: What kind of cultural problems envisaged by Honeywell? Differing management styles? Role of technology? Given strong local capabilities – to be complemented by national R&D policies (in pulp&paper and new, advanced technologies)?

3 Dermot O'Doherty, From technology acquisition and absorption to international R&D strategies – the Ireland case Ireland's economy doubled in size in a decade: in 1990s very strong FDI in software (also pharmaceuticals and medical devices) because of skilled workforce, low taxes But: success based mainly on import of advanced technologies from overseas Response: need to shift to a "knowledge economy"/system of innovation: HEI and public R&D to be resourced strongly Government's RTDI strategy accordingly aiming at indigenous knowledge creation and competitiveness; variety of policy initiatives launched Open questions: Public and private sector's spending sufficient? Size of domestic economy sufficient? Attention to medium-tech industries?

4 Moshin U. Khan, India's R&D policy and growth of software industry in comparison with China India: after a long period of tight regulation and protection; relaxation of regulation since the late 1980s (reduction of "public sector" industries; abolished licensing obligation and restrictions on mergers, take-over …; less protection of SME; etc) Result: strong FDI in electronics and software industry; influx of MNC; e.g. IT industry added 100,000 new jobs 2003/4; many new software companies created Reasons: High quality of Indian production; supportive regulatory framework; (low labour cost?) China: economic reforms started earlier; strong focus on IT hardware industries China's software industry suffering from small company size; only medium quality; "cultural confusion" Conclusion: Need for strong resource exploitation capabilities (human resource; learning; …); managerial capabilities (interface R&D and production; joint R&D; …) Open questions: Policies for indigenous sustainable growth? (education, skills, domestic research base, local demand, …)

5 Staffan Laestadius; Vicky Long, The relocation of ICT R&D activities Conventional wisdom: "Tigers" grow fast but don't catch up with leading economies; MNCs keep strategic R&D at home But empirical research shows: Chinese companies are rapidly becoming strong in high-end ICT based on R&D – not only domestically but increasingly in home countries of MNCs! Result: global convergence of knowledge formation, favoured by mobility of ICT knowledge! Open questions: Supporting the main hypothesis means a methodological challenge! Can a country like China with authoritarian/technocratic public policy develop and sustain favourable, learning-oriented frame conditions and institutions – when becoming a developing consumer society, striving for individualism …?

6 Lessons "Local"? (ranging from regional to national level) FDI as (one) important factor of "local" growth Medium-tech level, FDI targeting at local or regional markets … High technology level: exploitation of cheap high-level skills in R&D and/or production … [Very advanced technology level: FDI striving to build on high level of local knowledge] "Local" factors attracting FDI: favourable national regulation; attractive skills of local labour; How to sustain such growth? Indigenous knowledge creation as a base for long-term attractiveness and competitiveness … Development of HEI, domestic science and technology, capable production labour force, "systemic" managerial capabilities, … Stimulation of local demand … Challenge for public innovation-oriented policy! Systemic perspective? Sectoral scope? Institutions (HEI, research, regulatory bodies, ministries, local authorities, …) both reliable and learning-oriented and flexible? In China some signs of upcoming dramatic changes in global knowledge regimes (trend: Eu over China; US over Eu; J over US; Asia over rest?)

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