Location, Technology and Innovation
Following the arguments in the previous chapters, the reasons why multinational firms should play an increasingly important role in shaping globalization are not dependent specifically on the structural changes – technological, institutional and organizational – which have strengthened and accelerated globalization processes. Rather, it is because of the technological capabilities, skills and knowledge assets of MNEs themselves. In the global competition of the twenty-first century, knowledge, innovation and technology become increasingly critical assets, and the structural changes which have facilitated globalization have also increased the potential returns to such intangible resources. As we have seen in Chapters 4 and 5, MNEs compete primarily on the basis of their internalized knowledge assets and also how these are employed to engage with the knowledge assets of the geographical localities in which they operate. As such, their competitive advantages arise from a variety of sources both internal and external to the firm. However, the crucial competitive advantages MNEs have are in terms of their ability to exploit their organizational capabilities and experience of operating in international markets in order to leverage the benefits from the variety of knowledge sources they are able to access. As such, multinational firms are best placed to reap the potential global rewards from globalization, and at the same time to act both as conduits and facilitators of global knowledge engagement across space.
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