The Internationalisation of Business R & D
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The Internationalisation of Business R & D

  • New Perspectives on the Modern Corporation series

Edited by Bernhard Dachs, Robert Stehrer and Georg Zahradnik

It has become clear that over the past few decades enterprises not only produce and sell abroad but increasingly also develop goods and services outside their home countries; a development now known as the internationalisation of business R & D. This book presents a comprehensive picture of the current state of internationalisation of R & D in the business sector.
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Chapter 12: R & D Internationalisation from an Indo-German Perspective

Rajnish Tiwari

Extract

Even though internationalisation of research and development is not a completely new phenomenon with one of its early academic documentations tracing it back to the late 19th century (Dunning 1958), it was long considered to have been effectively centred in the triad of North America, Western Europe, and Japan (cf. Archibugi and Iammarino 1999, Carlsson 2006). R & D activities in the ëemerging economiesí of the developing world by global MNEs is a relatively recent trend, especially regarding the scope of the truly ëinnovativeí work conducted there (Tiwari and Herstatt 2012). Nevertheless, of late, there have been suggestions that the growing and largely unsaturated markets and increasing technological capabilities in some emerging economies are creating lead markets for affordability-driven ëfrugal innovationsí and acting as a ëpullí factor for FDI in R & D (Asakawa and Som 2008, Tiwari 2013). Even more recent, and still somewhat scattered, is the trend of MNEs from developing countries like India to indulge in outward FDI in the industrialised world for R & D purposes (Dachs and Pyka 2010, Sauvant et al. 2010). Not surprisingly, the issue of probable differences in the motives of the two sets of MNEs and the resultant implications of overseas R & D for the respective home countries require further research for a comprehensive understanding. For, the internationalisation of R & D may lead to a new division of labour in R & D within multinational companies, and different tasks may be shifted to locations abroad. This might, in some instances, have negative implications for the home country, but on the other hand may also help increase R & D activities in the home country; for example when the headquarter activities can benefit from a higher overall demand due to expansion into new markets.

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