International Growth as Integration of R&D Activities. Evidence from Large Multinational Companies

Corporate R&D internationalization has been analyzed predominantly in terms of the geographic diversification of multinational companies' research laboratories, and only to a lesser extent as a process involving the development of resources and capabilities within organizations and as a means of favoring international integration. This paper analyzes the relation between these two dimensions of internationalization, both of which are relevant for study of the multinational growth of R&D activities. Examination of the literature together with in-depth case reports of two large multinational clusters provides evidence in support of the following statements: · R&D internationalization can be seen as a "gradual" process that takes shape through the formation of specific resources and capabilities, which are developed within individual organizations but are designed to achieve integration both with foreign organizational units of the multinational cluster itself and also with other national innovation systems; · Multinational R&D follows a strategy that is characterized by a strong inter-relation between the formation of foreign research activities and the character of the integration process; · Corporate strategies may correspond to highly diverse and at times even contrasting R&D internationalization models, as shown by the emblematic case analyses presented here. The presence of these different models limits the scope of any general interpretation of the determinants and implications of R&D internationalization.-

Corporate Governance, Innovative Enterprise, and Economic Development

corporate governance, innovative enterprise, economic development

Monetary policy report to the Congress, July 16, 2002

The pace of economic activity in the United States picked up noticeably in the first half of 2002 as some of the powerful forces that had been restraining spending for the preceding year and a half abated. The economy expanded especially rapidly early in the year. As had been anticipated, much of the first quarter's strength in production resulted from the efforts of firms to limit a further draw down of inventories after the enormous liquidation in the fourth quarter of 2001. Economic activity appears to have moved up further in recent months but at a slower pace than earlier in the year. Notable crosscurrents remain at work in the outlook for economic activity. Although some of the most recent indicators have been encouraging, businesses still appear to be reluctant to add appreciably to workforces or to boost capital spending, presumably until they see clearer signs of improving prospects for sales and profits. These concerns, as well as ongoing disclosures of corporate accounting irregularities and lapses in corporate governance, have pulled down equity prices appreciably on balance this year. The accompanying decline in net worth is likely to continue to restrain household spending in the period ahead, and less favorable financial market conditions could reinforce business caution. Nevertheless, a number of factors are likely to boost activity as the economy moves into the second half of 2002. With the inflation-adjusted federal funds rate barely positive, monetary policy should continue to provide substantial support to the growth of interest-sensitive spending. Low interest rates also have allowed businesses and households to strengthen balance sheets by refinancing debt on more favorable terms. Fiscal policy actions in the form of lower taxes, investment incentives, and higher spending are providing considerable stimulus to aggregate demand this year. Foreign economic growth has strengthened and, together with a decline in the foreign exchange value of the dollar, should bolster U.S. exports. Finally, the exceptional performance of productivity has supported household and business incomes while relieving pressures on price inflation, a combination that augurs well for the future.Monetary policy - United States ; Economic conditions - United States

On The IT Industry and Government Policy Related with FDI in China

중국은 1978년 개혁개방이후 빠른 경제성장을 경험하고 있다. 이러한 경제성 장에 필요한 자본을 외국인 직접투자(FDI)형태로 조달하였다. 초기 경제성장은 중국의 저렴한 노동과 외국자본을 결합하여 가공무역형태로 진행되었다. 어느 정도 경제성장을 이룩하자 중국정부는 경제성장을 좀 더 기술집약적이고 자본 집약적인 산업으로 질적인 전환을 시도하였다. 이 과정에서 IT산업은 중국의 전략산업으로 부각되었다. 중국정부는 IT산업의 기술흡수 목적을 염두에 두고 더 많은 FDI를 유도하기 위해 합작투자형태 위주의 투자방식에서 독자소유기업을 허용하는 방침을 발표 하였다. 독자소유 형태로 전환한 다국적기업들은 기술을 보호하기 위해 자체의 R&D센터를 설립하는 등 다양한 형태의 경영활동을 펼쳤다. 이러한 활동들이 중국경제의 입장에서 보면 여러 가지 문제점을 노출하였다. 첫째 거대한 소비 시장과 정부우대정책으로 인해 다국적 기업의 과잉투자가 이루어져 초과생산설 비를 갖게 되었다. 둘째 다국적기업들의 과도한 기술보호로 중국의 기술파급효 과(technology spillover effect)가 기대수준보다 낮았다. 셋째 FDI투자의 불균등 이 심각하다. 동부해안 중심으로 FDI투자가 집중되어 지역격차, 소득격차 등 다 양한 불균형현상을 초래하였다. 넷째 심각한 환경문제를 발생하였다. IT관련 제 조품을 생산하는 과정에서 유독가스, 환경오염 등 유해물질을 무분별하게 방출 하여 국민건강에 해를 끼치고 있다. 이러한 문제를 해결하기 위해 다음과 같은 개선점을 제시한다. 첫째 정부는 정책가이드를 강화하여야 한다. 전문가고용문제, 정부우대정책, 환 경문제와 기술이전 등 중요 사안에 대해 모호한 지점이 없도록 명확히 가이드 라인을 정하고 홍보해야 한다. 둘째 다국적기업의 활용방안에 대해 강구해야 한다. 중국현지기업과 다국적 기 업간의 어떤 전략적 제휴가 유효한가, 어떻게 다국적 기업의 R&D활동에 참여 할 수 있는가 등에 대한 방안을 모색해야 한다. 셋째 기술파급효과를 최대화하기 위한 정책을 모색해야 한다. 기술파급효과가 큰 기술을 갖고 있는 다국적 기업이 중국기업과 합작투자방식을 택할 수 있도 록 과감한 우대정책을 펼쳐야 한다. - vi - 넷째, 중국현지기업의 기술혁신능력을 배양해야 한다. 중국 자체 내 과학기술연 구센터를 설립하여 신기술을 창출할 수 있는 인프라투자를 적극적으로 시행해 야 한다.List of Tables ················································································································· ⅲ List of Figures ··············································································································· ⅳ Abstract ··························································································································· ⅴ Chapter 1. Introduction ····································································································1 1.1 The background and purpose ··········································································1 Chapter 2. Current situation of IT industry in China ··············································4 2.1 The development of IT industry ····································································4 2.1.1 Expansion of IT industry ·····································································4 2.1.2 Increasingly strong international status ··············································6 2.2 Scales of investment in IT industry ······························································6 Chapter 3. IT industry and FDI in China ··································································10 3.1 Situation of FDI ····························································································10 3.1.1 The Characteristics of FDI in IT Industry ······································10 3.1.2 The trends of FDI ················································································16 3.1.3 The relation between FDI and IT industry ·····································20 Chapter 4. Problems of investment in IT industry ·················································24 4.1 Overinvestment ·······························································································24 4.2 Blockade on New Technology ·······································································24 4.3 The environment for investment ·······························································28 4.4 Uneven FDI in IT industry ·············································································29 4.5 Serious pollution ·······························································································31 Chapter 5. The improvement policy ···········································································32 - ii - 5.1 Strengthening the policy guide ·····································································32 5.2 Utilization of MNCs ··························································································34 5.2.1 Association between local companies and multinational companies ·············································································································34 5.2.2 Active participation of R&D activities ·············································35 5.3 “Spillover effect” for rational exploitation ············································37 5.3.1 Policy environment ···············································································37 5.3.2 R&D encouragement ············································································38 5.4 Fostering Innovation ························································································39 5.4.1 R&D ability of local companies ·························································40 5.4.2 FDI enterprises and Chinese scientific research institutions ······40 Chapter 6 Conclusion ·····································································································42 Reference ·············································································································

The Internet's Effects on Global Production Networks: Challenges and Opportunities for Managing in Developing Asia

Placing global production networks (GPN) on the Internet poses a fundamental challenge, but also creates new opportunities for managing in Developing Asia. Network flagships can now select best-performing suppliers on a global scale, increasing the pressure on Asian suppliers. But the transition form EDI to the Internet may also provide new opportunities for Asian suppliers, by reducing barriers to network entry, and by enhancing knowledge diffusion. A conceptual framework is introduced to assess how the Internet reshapes business organization and GPN. That framework is applied to one of the role models of managing in Asia, Taiwan's Acer Group. The paper highlights a vicious circle that must be broken to reap the benefits of the Internet: Asian firms must reduce a huge efficiency gap between manufacturing and the management of supporting digital information systems (DIS). The challenge is to embrace the Internet as flexible infrastructures that support not only information exchange, but also knowledge sharing, creation and utilization. The Internet facilities this task: it provides new opportunities for the outsourcing of mission-critical support services.

The McKinsey Global Institute Productivity Studies: Lessons for Canada

The McKinsey Global Institute (MGI) is a think tank based in Washington, D.C. founded in 1990 with the objective of analyzing international productivity levels from both economic and management perspectives. MGI uses microeconomic analysis on a sector-by-sector level to study the effects that industry decisions ultimately have on national productivity. For the most part the productivity drivers identified by MGI can be grouped into three broad areas: competitive factors (concentration, trade protection, deregulation, minimum wages, work rules, and zoning laws); managerial factors (best practice, human capital, capital intensity, and information technology); and demand factors (average income, cyclical factors, and consumer preferences). This paper examines these factors in an attempt to shed light on the causes of Canada-U.S. productivity differences at the industry level. Competitive factors may explain the poor productivity performance of the Canadian financial and cultural service industries relative to their U.S. counterparts, and likewise may explain the high productivity levels of some natural resource industries in Canada relative to the United States. Managerial factors, especially the implementation of new technologies and related processes, may be important in explaining the poor productivity growth in Canada relative to the United States in service industries such as retail trade. Given the similarities between Canada and the United States, the findings of the MGI studies cannot be indiscriminately applied to Canada-U.S. productivity differences at the industry level. However, the MGI studies do put forward a number of useful working hypotheses for analyzing these differences.Productivity, Productivity Growth, Industry, Industry Studies, McKinsey Global Institute, MGI, Concentration, Competition, Retail Trade, Wal-Mart, Regulation, Banking, Airlines, Best Practice, Deregulation

India: A New Player in Asian Production Networks?, Studies in Trade and Investment 75

While the IPN phenomenon has accelerated trade and investment linkages between countries in East and South-East Asia, the remainder of the region has not matched those countries in this process. The objective of this study is to explore the reasons for this by using India’s performance in the Asian IPNs as a case study for other countries that are trailing behind in this area. The study seeks to identify the reasons why India has performed below its potential in this new form of international division of labour, even though that country possess several supportive factors including: (a) the sheer size of the economy and population; (b) a large pool of engineers; (c) relatively sound intellectual property protection; and (d) an increasingly open trade and investment climate resulting from progressive economic reforms.production network, fragmentation of production, Asia, value chain, India manufacturing sector, China, India, Offshoring, MNCs, FDI