The Role of Science and Multinationals
Edited by Grazia D. Santangelo
Chapter 5: MNCs, Local Clustering and Science–Technology Relationships
John Cantwell BACKGROUND Since the 1960s, when location was central to discussions such as those on the product cycle model (Vernon, 1966) and the role of US direct investment in Europe (Dunning, 1970), interest in it as a critical factor in international business has experienced ﬁrst a decline and recently a revival. The lessening of interest in the 1970s was largely due to the shift in emphasis in the international business literature from macro-level questions about countries and their trade and balance-of-payments positions towards micro-level questions to do with the organization of cross-border operations within ﬁrms. So the focus of investigation shifted from location to the ﬁrm. However, the international company itself has gradually come to be perceived in a wider context. The revival of concern with location has been in part based on major changes in the economic environment, such as the increasing importance of intellectual capital as the key wealth-creating asset, increasing globalization in the form of a closer integration of activity between countries, but at the same time an increasing concentration of some specialized knowledge-based functions within selected sub-national regions, and the rise of alliance capitalism (Dunning, 1998). Alliance capitalism involves both strategic alliances and acquisition exchange deals between leading ﬁrms, but it also incorporates extended local networks in many vicinities that entail new and often closer relationships not merely between ﬁrms themselves but between ﬁrms and other local actors (such as universities), in what have sometimes been referred to as regional and national systems of innovation....
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