International Diffusion of Knowledge: Isolating Mechanisms and the Role of the MNE

Abstract

Abstract The overriding issue in this chapter is one of the international diffusion of knowledge (information) or, rather, the isolating mechanisms that may retard such diffusion. In view of earlier contributions to this volume, Sölvell and Zander provocatively argue that multinational enterprises are not particularly well equipped to transfer knowledge between local innovation systems. The observed difficulty of transferring tacit knowledge and process technology and the localized nature of knowledge creation are used to establish the importance of local systems. The authors also believe that there are isolating mechanisms operating at the national level, and in addition to identifying problems with knowledge transfer within the multinational enterprise, it is pointed out that such a firm is likely to neglect its own subsidiaries in its endeavour to become an insider in the local (regional) innovation cluster. Rather closely echoing Scott's view in the previous chapter, but from a slightly different vantage point, Sölvell and Zander suggest that the international competitive advantage of firms is in fact more intimately linked with dynamism within discrete local systems than is commonly recognized.