The Globalization of Technology: What Remains of the Product Cycle Model?

Abstract

Abstract Two of the central hypotheses associated with earlier versions of the product life‐cycle model are called into question. First, on the basis of 100 years of US Patent Office data on the patents granted to large European and American industrial firms, the author rejects the hypothesis that innovations almost always originate in the home country of the parent company; internationalization of industrial research is found to be neither insignificant nor a new phenomenon. The second hypothesis, that international investment is led by technology leaders, fares better, being consistent with the data. However, the author makes an extended interpretation in order to take account of more recent trends toward a much wider range of firms being engaged in internationalization, suggesting that technology leaders are now ahead in the globalization of technology, and that these firms would be most competent in exploiting the locationally differentiated potential of foreign centres of technological excellence. Technology leadership can then be said to manifest itself in superior management of internal international networks with multiple locations for innovation, rather than just in a wider geographical dispersion of investments.