Drivers and Impacts in the Globalization of Corporate R&D: An Introduction Based on the European Experience

The globalization of R&D activities has continued its growth path as companies are increasingly trying to capture knowledge and market opportunities internationally. The rapid evolution of national economies and the ways to conduct knowledge-intensive businesses has led researchers and analysts to pursue a deeper understanding of the globalization of corporate R&D and the related driving factors and impacts. This introduction to the Special Section: "Globalization and Corporate R&D" forthcoming in Industrial and Corporate Change (vol. 20 (2), April 2011) provides an update of trends in the globalization of corporate R&D. It reviews the literature on the main drivers and impacts of the process under investigation, introduces the papers for this Special Section, and offers some concluding remarks.outsourcing, R&D, globalization, FDI

Towards evidence-based industrial research and innovation policy

Calls for better use of scientific evidence to inform policy decisions stem from the belief that enhanced outcomes for the society can be expected. Yet the introduction of evidence-based practices in innovation policy making has not come without criticism. This introductory article sets the scene for the short collection of papers that address specific issues regarding the prospect of better evidence-based policy in the area of industrial research and innovation (IRI). It identifies and discusses key challenges for the transition towards evidence-based industrial research and innovation policy. It then introduces the three papers, which build upon and depart from related assumptions or narratives reflecting the current state of practices in IRI policy

Innovation and job creation. A sustainable relation?

This study compares the employment growth patterns of innovative and non-innovative firms focusing on whether there are systematic differences in the persistence of the jobs created. Using data from a unique longitudinal dataset of 3,300 Spanish firms over the years 2002-2009, obtained by matching different waves of the "Encuesta sobre Innovación en las Empresas españolas” and adopting a semiparametric quantile regression approach, we examine employment serial correlation

Home-owned versus foreign-owned firms in the UK automotive industry : exploring the microfoundations of ambidextrous production and supply chain positioning

The UK automotive industry is home to a large number of foreign firms, demonstrating the open nature of competition. However, the industry necessitates both exploitative and explorative capabilities. Contingency theory suggests that firms align their internal structure with contextual factors. As such, the aims of this study were to investigate whether it was possible to distinguish home-owned (UK) and foreign-owned firms based upon: a) the microfoundations of ambidextrous production, which are conceptualised as lean and agile routines; and b) the tier at which these firms operate in the automotive supply chain. Survey data were collected from 85 home-owned and 55 foreign-owned firms within the UK Midlands automotive industry. Logistic regression results revealed that home-owned firms were significantly more likely to be implementing explorative (agile) production methods, whereas foreign-owned firms were significantly more likely to be implementing exploitative (lean) production. Home-owned and foreign-owned firms were found to be significantly more likely to be operating upstream and downstream in the automotive supply chain respectively. Thus, the findings support a contingency theory explanation, suggesting that firms align their performance priorities with contextual factors, but we argue that home-owned and foreign-owned firms have evolved to compete based on their different innovative capabilities, which are located at different tiers of the automotive supply chain. On this basis, although neither home-owned nor foreign-owned firms were found to be endogenously ambidextrous, we argue that foreign-owned firms internationalise into the UK automotive sector to exploit the explorative capabilities acquired by home-owned firms operating upstream in automotive supply chains, thus enabling ambidextrous capabilities at an exogenous, industrial level

A REVIEW OF CORPORATE R&D INTENSITY DECOMPOSITION

info:eu-repo/semantics/publishe

Evolution of EU corporate R&D in the global economy: intensity gap, sectors' dynamics, specialisation and growth

The Thesis is composed by three complementary research investigations on the economic and policy aspects of EU corporate R&D.Collectively, the work first reviews the theoretical and empirical literature of corporate R&D intensity decomposition; it then investigates the EU R&D intensity and its decomposition elements comparatively with most closed competitors and with emerging economies over the period 2005-2013. Finally, it inspects further some key aspects that can be associated to the EU R&D intensity gap: sectoral dynamics and the resulting sectoral and technological specialisations as well as the drivers for R&D investment growth across sectors and firms' age groups of top R&D investing firms over time. These studies also address the possible policy implications that derive from their outcomes.The investigations rely on literature as well as on company data, mainly from nine editions (2006-2014) of the EU Industrial R&D Investment Scoreboard. For analytical purposes they use literature review, meta-analysis, descriptive statistics, R&D intensity decomposition computational approach, Manhattan distance and Technological Revealed Comparative Advantage metrics, and a multinominal logit regression model. The results of these three research works are novel in several aspects. It indicates that literature results on R&D intensity decomposition differ because of data and methodological heterogeneities, and that the structural cause is the main determinant of EU R&D intensity gap if sector compositions of the countries are considered. It inspects how the use of different data sources and analytical methods impact differently on R&D intensity decomposition results, and what the analytical and policy implications are.The empirical research results of this Thesis confirm the structural nature of the EU R&D intensity gap. In the last decade the gap between the EU and the USA has widened, whereas the EU gap with Japan has remained relatively stable. In contrast, the emerging countries' R&D intensity gap compared to the EU has remained relatively stable, while companies from emerging economies are considerably reducing such gap. Besides, as novel contribution to the state of the art of the literature, this Thesis uncovers the differences between EU and US by inspecting which sectors, countries and firms are more accountable for the aggregate R&D intensity performance of these two economies, and it finds a high heterogeneity of firms' R&D intensity within sectors. Furthermore, it shows that there is a bigger population of both larger and smaller US top R&D firms which invest more strongly in R&D than competitors, and that the global R&D investment is concentrated in a few firms, countries and industries. Finally, the research founds a slightly higher EU R&D shift over sectors compared to the US, but not strongly enough towards high-tech sectors. Also, the EU has an even broader technological specialisation than its already broad industrial R&D sector specialisation, while the USA leads by number of technological fields belonging mostly to the industrial R&D sectors of its specialisation. Furthermore, the EU has been better able than the USA and Japan to maintain its world share of R&D investment even during the years of economic and financial crisis. Lastly, the study also indicates that firms make a complementary use of capital expenditures and R&D intensity for their R&D investment growth strategies and it reveals that there are differences in their use between firms' age classes across sectors. Overall, the main results of the Thesis suggest that to reach a more positive R&D dynamics and boost its competitiveness, the EU should adapt its industrial structure and increase the weight of high R&D intensive sectors. A focus on creating the conditions for firm creation and growth in new-emerging innovative sectors is advised together with favouring the exploitation of the full capacity of EU leading - but mature - sectors to also absorb high-technology from other sectors.Doctorat en Sciences économiques et de gestioninfo:eu-repo/semantics/nonPublishe

Industrial R&D Investment: A Comparative Analysis of the top EU and non-EU Companies Based on the EU 2004 R&D

This paper presents the main resulte from the 2004 EU Industrial R&D Investment Scoreboard, whith liste the top 500 EU companies and the top 500 non-EU companies ranked by their R&D investment. After a short description of the definitions and objectives of the exercise, its content and main findings are shown together with results from other analyses performed within The European Common Directorate General, Joint Research (JRC) -Seville, showing the impact of the degree of concentration at the company's level on the overala industrial R&D stance. There seems to be a correlation between R&D intensity growth and net sales growth. Despite a competitive total amount of R&O investment, the average overall R&O intensity of the sampled European Union companies is much smaller than for their non-EU counterparts. This e related to a smaller proportion of output from sectors with high intrinsic R&O intensity, which is particuíarly noticeable in IT Hardware and Software and Computer Services. Although REDO investment amounts are comparable for the biggest firms, the share of R&O performers at the middle and the bottom of the EU-500 Scoreboard is much smaller in the EU than the non-EU. The analysis indicates that national, regional and sectoral patterns deviate considerably from the overall picture of the EU. An entire section of the paper is dedicated to an inter-sector comparison of RE&D-related indicators. The issue of concentration of R&O investment among top companies investing in research is investigated to more detail, in large companies, by sector of activity and by location. It la also proved that the sample of top R&D investing companies is statistically characterised by heteroscedasticity

Inward Greenfield FDI and Patterns of Job Polarization

The unprecedented growth in foreign direct investment in the last few decades has caused drastic changes in the labor markets of the host countries. The major part of FDI takes place in low-tech industries, where the wages and skills are low, or in high-tech, where they offer a wage premium for the highly skilled workers. This mechanism may increase the polarization of employment into high-wage and low-wage jobs, at the expense of middle-skill jobs. This paper looks at the effects of two types of FDI inflows, namely foreign investment in high-skill and low-skill activities, on job polarization. We match data on greenfield FDI aggregated by country and sector with data on employment by occupational skill to investigate the extent to which different types of greenfield FDI are responsible for skill polarization. Our results show that low-skill foreign investment shifts employment from high- to medium- and low-skill jobs, while skill-intensive FDI generally leads to skill upgrading. Only FDI in information and communication technology (ICT) is associated with job polarization, but only when accounting for the plurality of job polarization patterns across European sectors

The global economic and financial downturn: What does it imply for firms' R&D strategies?

R&D and the entire innovation process are likely to be affected by the current crisis. Apart from changes in R&D spending, as any crisis usually provides also chances it may stimulate a new wave of networked / open innovation and in this regard lead to 'creative destruction' as Schumpeter called it. Thus, high-technology manufacturing is far better-positioned to face the crisis compared to low-tech manufacturing, which is assumed to fare especially badly. The figures of R&D expenditure are assumed to evolve accordingly. And small companies and particularly those which are financially restricted (many SMEs) are supposed to suffer most. In general, the downturn is supposed to accelerate the shift of EU manufacturing towards higher value-added, highly integrated, and internationally oriented sectors. Assumed that the latter tends to be characterised by higher R&D-intensity this in turn may have a positive impact on R&D investment figures. But, as structural changes usually happen slowly, this leverage effect may appear just in the long-run. Empirical evidence from a series of recent business surveys [mainly capturing R&D-performing / higher R&D-intensity sectors] suggests that the perception as well as the funding of corporate R&D and innovation activities are holding up fairly well so far which suggests an anti-cyclic firm behaviour in terms of R&D engagement in the light of the current economic and financial crisis. For 2008/09 the estimates of R&D expenditure changes differ significantly among the sources – mainly due to the corresponding assumption on the further evolvement of the current financial and economic crisis with the estimate of 4.1% for EU – based on the JRC-IPTS' IRMA-Survey – well in-between. However, across the sources, the corridor for the R&D investment change is assumed to be above the corresponding assumptions on GDP and sales growth. Evidence suggests that the impact of the crisis on R&D activities and the correspondingly assumed adjustments of firm strategies is sector specific. However, looking at micro level, there is no unique company strategy obvious commonly applied to face the crisis. In fact, some companies leave their R&D engagements unchanged, others cut them down, and a third group even accelerates their R&D and innovation activities (inclusive a significant leveraging of spending on R&D). In this regard experiences from past downturns suggest that companies having the farsightedness and the courage to invest more in R&D and innovation activities while others are cutting back have a significant advantage in the inevitable upswing that will come. Market rewards will follow – but not immediately.corporate strategy, R&D and innovation, R&D spending, economic crisis