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November 20, 2006
Seeking foreign R&D
Last week, I posted a description of a recent Swiss study on informal innovation. Using the same data from the Swiss Innovation Survey, Heinz Hollenstein look at the behavior of companies seeking foreign R&D. He identified four strategies:
• Strategy 1: Firms pursuing a broad-based foreign R&D strategy in terms of motives, with tapping into knowledge available at foreign universities and embodied in specialists as the core elements;
• Strategy 2: Firms strongly embedded in networks of highly innovative companies and transferring a substantial part of the knowledge obtained abroad to the domestic headquarter;
• Strategy 3: Firms pursuing a strongly focused strategy, with foreign R&D almost exclusively used as a means to extend local markets;
• Strategy 4: Firms pursuing, in terms of motives, a rather narrow-based foreign R&D strategy that aims at reducing R&D costs and gaining access to highly skilled personnel.
His findings:
Foreign R&D still is based to a very significant extent on the traditional efficiency- and market-seeking motives: clusters 3 and 4, which primarily reflect these types of motives, dominate foreign R&D activities, at least in terms of employment (65% of employment). However, knowledge-seeking, which is a core ingredient of the other two foreign R&D strategies, has become a very important driver of the internationalisation of R&D in the Swiss economy: 51% of firms (although only 35% of employment) pursue these two types of foreign R&D strategies.
Given that the Swiss economy and Swiss companies are highly internationalized, it is interesting the extent to which companies’ foreign R&D strategy are still relatively traditional. However, the growth in the more knowledge-seeking strategies portents a coming shift.
This is the subject of a number of on-going studies (most notably by my colleague Hal Salzman at the Urban Institute). It will also be the subject of a conference next year at the National Academy, which Athena Alliance is a co-sponsor. More on that as details become available.
Posted by Ken Jarboe at November 20, 2006 10:50 AM
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