Geography Reference
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innovative actors, MNEs' human capital also benefits from high
inter-firm interregional mobility. According to our interviews in the
UK, MNEs located in the Cambridge Cluster and in the Thames
Valley have high degrees of inter-firm mobility in which outflows
generally balance inflows.
Organization of R&D: how MNEs organize their R&D activity
Also in this case we can distinguish three different organiza-
tional modes adopted by MNEs: (1) Infrastructure assisting R&D
decision-making . Two rather distinctive models were identified. In
some firms, highly centralized basic research facilities are used
in order to catalyse economic resources and capabilities. This
strategy is followed for instance by one German-owned MNE
in the automotive sector, in which the central research facilities
serve the network of globally spread subsidiaries, carrying out
strategic R&D for the whole group. A similar approach is taken
by a German pharmaceutical company, which consolidated its
pre-clinical research in its headquarters, whilst it kept carrying out
clinical research in several major markets. In these cases, whilst
strategic R&D decisions are taken in the headquarters, devel-
opment activities are highly decentralized and spread across
various locations. On the other hand, some MNEs are developing
highly decentralized and entrepreneurial R&D units, with large
degrees of budget and planning autonomy. This model is chosen
as it enables the firm to manage the research portfolio more
efficiently by accessing external knowledge at earlier stages of
the innovation process. Moreover, they are often complemented
by venture capital units, which support the identification of new
growth opportunities. At the same time, intense interactions of
such R&D centres with local business and service delivery units
ensures inflows of relevant market information into the corporate
R&D network. For instance, one UK-owned pharmaceutical firm
has introduced new managerial positions to coordinate globally
independent research units and their collaborative strategies;
other MNEs have established specific departments that manage
internal knowledge transfer from the R&D units to the rest of the
company and vice versa. Similarly, research portfolio offices
have been set up by one ICT firm to evaluate and match internal
and external research findings. Supported by intense and struc-
tured communication processes, these units secure the transfer
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