Rising power firms - The developmental promises and challenges

Purpose – The purpose of this paper is to introduce the notion of "rising power firms” and how these firms offer developmental promises and challenges to the face of international business (IB). We suggest that rising power firms offer novel capabilities, connect IB to global value chains (GVCs) and then introduce the papers in the special issue. Design/methodology/approach – The papers in the special issue are grouped under two distinct themes, one considering the capabilities of rising power firms and how these are shaped broadly by the economic and socio political features of their home countries. The second theme clusters papers that have a GVC dimension in so far as they highlight failures in upgrading, flag the disconnect between economic and social upgrading and provide a novel conceptualisation of social value creation. Findings – The international business literature has paid growing attention to the emergence of multinational enterprises (MNEs) from rising powers, notably the ‘BRICS’. One perspective, a dominant perspective in IB, sees RP MNEs as a manifestation of catch–up efforts by firms from emerging economies, another perspective suggests that rising power firms compete with distinct capabilities and business models. This special issue highlights the latter perspective. Originality/value – This paper introduces five diverse papers that deal with issues pertaining to rising power firms and developmental perspectives. Keywords – Rising powers, emerging multinational enterprises (EMNEs), global value chains, development, upgrading, social value creation. Paper type - General revie

ICT deployment and resource-based power in multinational enterprise futures

Applying a resource-dependency perspective to intra-multinational enterprise (MNE) power 53,54, this paper examines the effect of the deployment of advanced ICT and particularly the implementation of enterprise resource planning (ERP) systems. Although subsidiaries in the multinational do not have authority-based or ‘structural’ power with respect to key strategic decisions 6,16, they may have ‘resource-based’ power in the form of knowledge and capabilities that is of value to the multinational as a whole. Business network analysis highlights the ‘invisibility’ of the external networks (often in the host country) to the upper echelons in the multinational through which valuable subsidiary knowledge and capabilities develop. It points out that this ‘invisibility’ undermines the headquarters’ ability to control the subsidiary 3,28,36,42,68,72. In this paper we argue that the deployment of ERP undermines the resource base of subsidiary power and thus helps to restore greater central authority in the MNE. The paper reports findings from studies in twelve MNEs which have implemented ERP and points out that from the perspective of subsidiary managers a key effect of ERP deployment is the reduction in their autonomy. This may have significant adverse implications for the futures of the MNE as a federative organizational form and the legitimacy of MNE operations abroad

Terra - An Open Digital Twin Framework for Simulation-to-Real AI Development

The development of artificial intelligence (AI) based robot policies such as embodied visual AI is a rapidly emerging field that promises to fully automate robot sensing and control, reducing the need for expert knowledge and information about system dynamics. The recent surge in the availability of digital simulation environments has helped to alleviate the data scarcity problem faced by AI training and yielded many tasks for embodied AI to explore. In contrast to conventional computer vision databases (e.g. ImageNet, COCO), they provide interactive environments tailored to the training of embodied AI agents (e.g. virtual robots). Despite their success, there remain several unaddressed issues. First, these environments primarily focus on in-simulation policy training and are not well suited for real-world performance evaluation. Second, current platforms do not model the dynamics of the physical environment on-the-fly, limiting their potential for the development of robot navigation policies in challenging environments. Third, the associated real-world evaluation environments are both expensive and limited to large interior scenes. This limits access to the physical environments, subsequently making sim-to-real policy evaluation difficult. Fourth, current simulations rely on third party robots for policy training and evaluation, which can be costly while limiting the robot’s customizability and optimisation for the associated task and environment. To tackle these issues, we propose a novel robot-centred smart digital twin framework called Terra. Terra leverages the power of digital twin (DT) systems (digital replicas of the physical world), commonly used for monitoring and evaluating physical systems. Terra includes a comprehensive DT representation which encodes useful real-time dynamics of both the physical world and the robot agent deployed therein. The DT is updated through a multi-view, multi-modality perception module, which obtains high-level semantics, delivering a precise description of the current status of the physical environment and the robot agent. By mapping the perceived results to the virtual replica of the physical environment, Terra actively updates the action policy and sends it back to the agent, forming an integral and real-time information feedback loop. In practice, to help demonstrate the proposed framework's effectiveness and feasibility, we deliberately set up a challenging unordered physical environment with many obstacles and a custom robot tasked with a simple navigation task. Our physical scene is inexpensive and small, while our novel low-cost robot is customised for the environment. Experiment results show that the proposed Terra framework successfully enables the robot to accomplish a simple navigation task, demonstrating its suitability for real-world robot performance evaluation

An exploratory analysis of the internationalization of innovative activity in Finnish multinational enterprises

This paper examines two aspects of the internationalisation of innovation in Finnish multinational companies, the growing innovativeness of foreign subsidiaries (‘creative subsidiaries’) and the phenomenon of ‘crossfertilisation’, between R&D labs in Finland and those in foreign subsidiaries, in the innovative process of Finnish MNEs. We review existing literature pertaining to innovation in multinational enterprises and the growing capability of foreign subsidiaries to undertake innovation. Consistent with the general thrust of the literature we develop and examine two hypotheses relating to subsidiary innovation and cross-fertilisation between subsidiaries and the parent for 30 Finnish MNEs between the years 1975–1995, employing patent data from the US patent office. Our findings provide support for the hypotheses. We conclude by pointing out the limitations of the current study and deriving implications from our findings for future research

Trans-specialization understanding in international technology alliances: The influence of cultural distance

In the information age, the firm's performance hinges on combining partners' specialist knowledge to achieve value co-creation. Combining knowledge from different specialties could be a costly process in the international technology alliances (ITAs) context. We argue that the combination of different specializations requires the development of "trans-specialization understanding" (TSU) instead of the internalization of partners' specialist knowledge. This article examines the extent to which inter-firm governance in ITAs shapes TSU, and whether the development of TSU is endangered by cultural distance. We hypothesize that relational governance, product modularity, and cultural distance influence TSU development, which in turn influences firm performance. We collected data from 110 non-equity ITAs between software and hardware firms participating in the mobile device sector. We analyzed the data using partial least squares path modeling. Our findings suggest that TSU largely depends on product modularity and relational governance in alliances. However, while cultural distance negatively moderates the path from relational governance to TSU, it has no effect on the relationship between product modularity and TSU. Based on this, we conclude that product modularity can substitute for relational governance when strong relational norms are not well-developed in international alliances. Thus cultural distance does not invariably amount to a liability in ITAs

The striatum multiplexes contextual and kinematic information to constrain motor habits execution

International audienceThe striatum is required for the acquisition of procedural memories, but its contribution to motor control once learning has occurred is unclear. We created a task in which rats learned a difficult motor sequence characterized by fine-tuned changes in running speed adjusted to spatial and temporal constraints. After training and extensive practice, we found that the behavior was habitual, yet tetrode recordings in the dorsolateral striatum (DLS) revealed continuous integrative representations of running speed, position and time. These representations were weak in naive rats that were hand-guided to perform the same sequence and developed slowly after learning. Finally, DLS inactivation in well-trained animals preserved the structure of the sequence while increasing its trial-by-trial variability. We conclude that, after learning, the DLS continuously integrates task-relevant information to constrain the execution of motor habits. Our results provide a straightforward mechanism by which the basal ganglia may contribute to habit formation and motor control