Drivers for international innovation activities in developed and emerging countries

This paper aims to shed light on firm-specific drivers that lead firms to internationalise their innovation activities. The paper paints a comprehensive picture of driving forces by including firm capabilities, characteristics of the firm’s competitive environment and the influence of innovation obstacles in the home country. In particular the influence of potential driving forces on the probability to carry out different innovative activities abroad is assessed (R&D, design/conception of new products, manufacturing of innovative products and implementation of new processes). In a second stage these driving forces are observed with regard to their impact on the decision to locate innovation activities in various countries and regions (China, Eastern Europe, Western Europe and North America) as well as in groups of countries with similar levels of knowledge (“country clubs”). The analysis is based on the Mannheim Innovation Panel survey which represents the German CIS (Community Innovation Survey) contribution. Two survey waves have been combined, resulting in a sample of about 1,400 firms. The results show that the decision to perform innovation activities abroad is mainly driven by organisational capabilities such as absorptive capacities, international experience and existing technological competences of the respective firm. Innovation barriers at the German home base such as lack of labour and high innovation costs prompt the set-up of later-stage innovation activities abroad while the lack of demand demonstrates a barrier to the internationalisation decision for the development and manufacturing of new products. Location decisions receive the strongest influencing effects from the international experience of the firm. Firms which innovate in developing countries seem to require a more extensive level of international experience through international R&D cooperation.     

Innovating from big science research

Increasing scientific knowledge demands technological breakthroughs beyond industrial innovation activity. Using this as a basic motivation for R&D collaboration between industry and big science, the paper reports a systematic approach to exploit the technological treasures embedded in experimental basic research. Based on a systematic technology breakdown and mapping of each technological trajectory with possible application areas, the method enables one to direct joint efforts on the most prominent research topics. Yet, to achieve this active partners are needed to enter the innovative conversion process to turn scientific ambitions into commercial products. Some industrial companies practicing active R&D strategy have realized this, and the paper outlines some cases where the product innovation, is not the only motivation to enter big science collaboration. Putting all this together, and knowing the severe financial and political pressures the major scientific research labs are facing, the paper defines the practical procedures needed to initiate the process which eventually leads to better technological return from fundamental research.     

Location choices within global innovation networks: the case of Europe

Rapid growth in internationalization of corporate R&D has spurred considerable interest since the 1990s. Foreign R&D is still mainly driven by the expansion of international production, but technology sourcing has become an increasingly important driver of dispersion. Actually, differences across sectors and companies tend to obscure the mix of motivations behind the development of global innovation networks. This paper distinguishes the various drivers of the international dispersion of corporate R&D in order to elaborate a typology of foreign R&D units, including in emerging countries. This typology is used to discuss the emergence of differentiated global innovation networks and the location choices by type of R&D unit. It is applied to foreign R&D projects in Europe in high and low cost countries between 2002 and 2005. It is then used to discuss the weakening attractiveness of the European Union for R&D activities and the relevant policies that countries can design to attract different types of units.

Estimating intersectoral technology spillovers for Brazil

This paper aims to evaluate the main intersectoral R&D flows in the Brazilian economy, determining their direction and magnitude. Unlike other studies that focus exclusively on rent spillovers flows of R&D, this paper also calculates spillovers with total spending on innovation in addition to R&D expenditure. In the case of developing countries, where R&D is of lower relative importance, we assume that technological effort is measured more accurately if it is considered as different types of innovative expenditure. We used data from the Technological Innovation Survey, conducted by the Brazilian Institute of Geography and Statistics with the support of Ministry of Science and Technology and data from an input–output matrix for the Brazilian economy, calibrated by Laboratório de Analises Territoriais e Setoriais—LATES of the Federal University of Juiz de Fora. The analysis is from the year 2011 and covers 32 sectors of economic activity resulting from the compatibility of the two databases. The main results show a mapping of the intersectoral flow of knowledge embodied both by the total expenditure on innovation and by in-house R&D to Brazil for the year 2011. It is important to highlight the wealth of detail of such a mapping, as it characterizes not only by sectoral interdependence of these aspects, but it also shows the direction of flows, the sectoral hierarchy in terms of “donation” of technical knowledge and the intersectoral flows in terms of technological intensity.     

The Catch-up Strategy of Petrobrás through Cooperative R&D

This article seeks to reflect on the possibilities of cooperative R&D to constitute an opportunity for companies in developing countries to take part in the innovation concerning technological frontier. In order to show this thesis can be true, this article is based on the case study of Petrobrás, the Brazilian state-owned oil company, which has employed the resource of cooperative R&D to gain access to the new subsea boosting technology and to acquire a place in the vanguard of such technology. However, the catch-up occurs only when firms in developing countries actively take part in the innovation process and accomplish an efficient process of technological learning, which is reflected on the evolution of interactions with external partners. The experience of Petrobrás is analyzed emphasizing the technological learning process through the transformation in its agreements with external partners. We present three cases of subsea boosting technologies developed by Petrobrás together with a majority of foreign producers or institutes. The analysis of these experiences allows us to show that the learning process and the mastery of in-house processes were accompanied by a significant evolution in the agreements with external sources. Petrobrás passes on from the position of cosponsor to that of articulator of the innovation process in technological cooperation agreements. The article proposes an evolutionary sequence to analyze the company's learning process. The evolutionary trajectories are different in each case, but in all of them it was possible to prove the increasing commitment of Petrobrás to the innovation effort.     

Assessing the relationship between R&D subsidy,R&D cooperation and absorptive capacity: an investigation on the manufacturing Spanish case

Private companies want to eliminate outgoing spillovers while policymakers seek to maximize them. With subsidized R&D cooperation agreements both agents partially achieve their objectives. For this reason, in Europe, policymakers grant subsidies for R&D activities with the condition of establishing R&D cooperation agreements. This study explores the relationship of complementarity between R&D subsidy, R&D cooperation and absorptive capacity in the context of its contribution to labor productivity of enterprises. The data used comes from the Technological Innovation Panel (PITEC), managed by the Spanish National Statistics Institute. We selected manufacturing companies in the period 2008–2013. We evaluate the existence of complementarity through the systems approach and the interaction approach. The econometric technique that we used to estimate the coefficients of our empirical model was maximum-likelihood random effects. As a consequence of the low absorptive capacity of Spanish manufacturing firms we find that R&D subsidies and R&D cooperation agreements are not complementary variables, i.e., receiving public subsidies as a result of establishing R&D cooperation agreements has a lower impact on productivity than the sum of the individual impacts of R&D cooperation and R&D subsidies. In consequence, this result calls into question the convenience of using subsidized R&D cooperation agreements as a tool for promoting innovation in EU countries as there are notable differences between the companies in these countries in terms of absorption capacity.     

The role of R&D and input trade in productivity growth: innovation and technology spillovers

Productivity improvements generally are driven by technology innovation and its spillovers. This study explores the role of R&D investment and intermediate input trade in productivity growth using country-industry-level data for 25 advanced and emerging economies. This paper confirms that R&D investment and intermediate input import/export (both intra- and inter-industry) with technologically advanced economies play important roles in productivity growth in non-frontier countries. We further find that the productivity gains of technology spillovers via input trade channels are likely larger for countries/industries where technology converges to the frontier. These findings imply that the recent slowdown in R&D investment and intermediate input trade in some advanced economies may contribute to declining productivity growth. The potential productivity improvements from R&D investment and free trade as well as the importance of domestic capacity in facilitating technology spillovers should be recognized.

     

The effects of industry characteristics on the sources of technological product and process innovation

In order to explore the effects of industry characteristics on the sources of technological product and process (TPP) innovation, this paper considers various sources in a united framework, and identifies their cross-industry similarities and differences. It sheds light on three Chinese high technology industries, and empirically confirms that in-house R&D, technology transfer, technology spillover and back-propagation of user innovations are all effective sources of TPP innovation. However, each source creates different productivity in different industries, which may be explained by the following industry characteristics: the dependence on foreign technology, the importance attached to inventive in-house R&D, the level of domestic technology, the relative proportions of foreign and domestic users.     

The relation between technology import and domestic R&D

The relation between domestic R&D and imports of technology is examined for 10 countries. Simple regressions revealed strong complementarity for each of the countries. Multiple regressions including GNP per capita and number of scientists and engineers were performed for the five countries with time series for all the variables. Strong complementarity was found between technology imports and domestic R&D and other variables for Japan and South Korea, weak for France, none for Germany and the US. Excluding government-financed R&D in the US resulted in a substitutive relation. Japan revealed a sharp decline in the ratio of technology payments to R&D spending; Korea is following in its steps. Complementarity appears to weaken in later stages as technology development strategies shift from dependent to imitative to autonomous or offensive technology development.     

Shaping the path to inventive activity: the role of past experience in R&D alliances

In this paper, we investigate a recurrent organizational event—R&D strategic alliances—and analyze its multidimensional effect on inventive activity; in particular, we examine the quality of the inventive process outcome. In so doing, we address the still-unresolved issue of the impact of past experience in explaining performance differences between firms in the realm of alliance inventiveness. Our results offer new insights concerning the crucial drivers of invention quality and technological breakthroughs. As expected, results suggest that—in the area of R&D—alliances formed by experienced partners are more likely to produce inventions that effectively synthesize technological knowledge from more diverse domains. In fact, experienced alliance partners are more likely to generate useful inventions with a greater innovative impact on others’ subsequent inventions—knowledge that can be built upon. Surprisingly, results are indeterminate with regard to whether innovation via R&D alliance increases invention’s degree of applicability across diverse scientific and technological fields that might cite its patent.     

Industry interactions with federal laboratories

This article is based on two surveys of US firms, all of them members of the Industrial Research Institute, on their interactions with university and federal laboratories. It covers mainly the federal part of the responses. Although questions remain to be answered (a followup survey is planned for mid-1991), the firms had a surprisingly high level of awareness of and interaction with the federal laboratories. Many of them plan to increase their external R&D funding. We believe the firms including such external resources in their strategic planning will achieve stronger competitive positions than those that do not. Director of the Graduate Program in Technology and Science Policy. Previously, he was principal scientist and group manager for Industrial Policy and Planning at the Solar Energy Research Institute in Golden, Colorado. He also served as policy analyst with the National Science Foundation's R&D Assessment Program and, subsequently, as acting leader of the Working Group on Innovation Processes and their Management. Roessner received degrees in electrical engineering from Brown University and Stanford University, and a master's degree and Ph.D. in Science, Technology and Public Policy at Case Western Reserve University. His research interests include the diffusion of technological innovations, national technology policy, government-industry relationships in technology development and use, the management of innovation in industry, and indicators of scientific and technological development.     

The effect of competitive and non-competitive R&;D collaboration on firm innovation

A firm can improve its innovation either by its internal research and development (R&D) efforts or by forming external collaborative R&D alliances. While previous studies on R&D collaboration and knowledge diffusion mainly focus on various external sources of R&D collaboration, little effort has been made to investigate the joint impact of competitive and non-competitive R&D collaborations on firm innovation simultaneously. By examining the data of 165 Taiwanese firms in the information and communication technology industry, we find that: (1) non-competitive R&D collaborations with universities have a positive direct impact on firm’s innovation performance; and (2) both non-competitive and competitive R&D collaborations have a positively moderating effect on the relationship between a firm’s internal R&D efforts and firm innovation and the positive moderating effect is higher for non-competitive R&D collaborations than that of competitive R&D collaborations. These findings suggest that R&D collaborations, either non-competitive or competitive, exhibit the nature of a win–win situation. We also derive implications for firms’ selection of R&D alliance partners and government policies.     

R&D Venture: proposition of a technology transfer concept for breakthrough technologies with R&D cooperation: A case study in the energy sector

At times when the market demands strong active innovation, large industrial corporations with established R&D organizations benefit from screening and developing breakthrough innovation. The ability of established organizations to absorb for future technologies is a key to successfully recognize, explore and capture breakthrough innovations. R&D Venturing is a practical way of bringing about technology transfer and exploration of future technologies through R&D cooperation, which is described in this paper by a multiple case study in the energy sector. Existing literature has been reviewed and an R&D Venturing concept will be suggested with a number of propositions for implementation. The results of the case study strongly support that different perspectives of the concept from industry, academia and the ventures themselves have to be carefully understood. Based on the results of the case study, a conceptual framework and propositions for a successful implementation have been derived. A critical discussion of the R&D Venturing concept shows the need for further empirical investigation.     

“We really don’t want to move,but...”: identity and strategy in the internationalisation of industrial R&;D

In Norway, as in many other high-cost OECD countries in a geographical and cultural periphery, policy-makers seem to have given up attempts at attracting large numbers of foreign R&D investments. Instead, a major focus of innovation policies is to help companies internationalise yet with an aim to maintain or even increase their level of R&D and other innovation activities nationally. Based on case studies of eight Norwegian companies and their motives for and experiences with internationalisation of R&D, this article questions this policy. From the perspective of the companies, many factors explain how, why and where they carry out their R&D activities.      

Building Technological Capability Through Importing Technology: The Case of Indonesian Manufacturing Industry

This research investigates the critical elements affecting the ability of firms in developing countries to cultivate their technological capability through imported technology. The information obtained from forty-five technology recipient Indonesian manufacturing firms indicate that the cultivation of technological capability is affected by several factors such as a firm's technological absorption capacity in terms of R&D activities and availability of technical personnel; transfer channels; government's involvement; and a firm's learning culture. Also, the acquisition of mature technology just to boost production capacity or improve product quality contributes very little to the development of technological capability.     

Maximizing R&D investments in the Department of Energy's Environmental cleanup program

The investment made in research and development (R&D) by the Department of Energy's (DOE) Environmental Management (EM) program must result in products that will significantly benefit the Department's cleanup efforts. A customer-oriented decision-making process for managing technology development is needed to appropriately link technology development activities with cleanup operations. This paper presents a process for R&D management, which we have named the Technology Investment Decision Model.The model identifies six R&D stages leading to technology implementation. The model incorporates decision points (or “gates”) within the R&D process where projects are selected for funding. The purpose of this “stage-gate” process is to ensure early evaluation of projects against technical and nontechnical criteria in order to ensure that end products will not only provide superior performance, but also meet the acceptance requirements of the intended customers. The model addresses the technology transfer and commercialization factors that must be considered to get technological innovations into the marketplace. The model is now being implemented within the EM technology development program and is providing a common framework to align the Department's environmental R&D activities with its cleanup goals.     

Innovation capacity and economic development: China and India

Decomposing the GDP growth from 1981 to 2004, this paper finds that innovation capacity has contributed significantly to the economic growth of China and India, especially in the 1990 s. Outputs of the national innovation system, measured by patents and high-tech/service exports, demonstrate the considerable progress China and India have made in innovation capacity. The enhanced innovation capacity of China and India is primarily due to their heavy investment in the inputs of innovation system, i.e., R&D expenditure and R&D personnel, in recent decades. This paper emphasizes the role that the governments have played in promoting innovation capacity and their contribution to economic development. Both governments have transformed their national innovation systems through linking the science sector with the business sector, providing incentives for innovation activities, and balancing import of technology and indigenous R&D effort. Using case studies of domestic biotech firms in China and India, this paper also offers micro-level insights on innovation capacity and economic development: (1) innovation capacity has become essential for domestic firms?? market success and (2) global institutional factors and national government policies on innovation have considerable influence on the choice of innovation at the firm level, i.e., to conduct indigenous R&D or to import foreign technology.     

Linking technological and educational level diversities to innovation performance

In this study, we explore the extent to which diversity of educational levels among research scientists and engineers (RSEs) in the context of a firm’s level of technological diversity influences innovation performance. We used data from the 2004–2008 National R&D Survey in Singapore. The results from 366 firms across different industries indicate that when a firm’s technological domains are heterogeneous, those firms with an RSE workforce comprising similar educational levels have positive innovation performance, measured as the number of patent applications, while those comprising diverse educational levels have negative innovation performance. Our further exploration of the positive interaction between technological domain heterogeneity and similarity of educational levels suggests that firms that had a high ratio of RSEs with lower educational levels had more positive patent outcomes compared to those that had a high ratio of RSEs with higher educational levels. The results show that there are limits to the strength of technological diversity in a firm’s absorptive capacity as explained by organizational demography.     

The R&D performance of the South African manufacturing sector, 1970–1993

In this article we undertake a detailed exploration of the research and development activities in one particular middle-income country. We explore what the data from R&D surveys can tell us about the levels, the determinants and the effectiveness of R&D in the manufacturing sector. We point to some of the broader factors that may have influenced South Africa’s drive to improve the technological capacity of its manufacturing sector, but we mostly focus on those issues associated directly with R&D. We show that the degree of interaction between the different domains of R&D activity, business, government and the tertiary sector has been weak, and that the possibility of positive spill-overs between these domains has not been fully exploited. In addition, little or no policy intervention designed to stimulate R&D activity by industry has been deployed in South Africa. We find that South African R&D activity has mainly been reactive in character and suggest that this lies at the heart of South Africa’s mixed R&D performance in relation to other developing countries.     

Nanotechnology and the US national innovation system: continuity and change

A substantial literature on nanotechnology innovation and commercial development has characterized several elements of these phenomena as constituting new developments in the US national innovation system. Among these elements are the (asserted) “post-academic” nature of US universities’ involvement with nanotechnology R&D, and federal funding of nanotechnology R&D on goals related to economic competitiveness. This paper challenges the “novelty” of these elements, while suggesting that other elements of nanotechnology R&D, including the extensive patenting of the results of nanotechnology-related research and the emphasis within many university-industry collaborations on patent-based channels for “technology transfer,” may indeed be new and raise questions for the long-term efficiency and innovative performance of nanotechnology-related R&D.