Globalizing R & D around centres of excellence

Abstract

Traditionally, foreign R & D has been confined to a limited role within the technological innovation process of multinational enterprises (MNEs). Recent surveys have shown that global R & D, i.e. the location of research and development labs in different countries, is growing. This paper analyses R & D globalization strategies and the decisions to locate R & D abroad. A framework for locating R & D facilities is presented, which is based on an investigation of the practices used in twelve multinational corporations. Global R & D strategies depend on whether the firm is research-oriented or development-oriented; in other words, whether the firm's strength lies in research or development. The concept of an R & D centre of gravity is introduced. Locational decisions are affected by many factors, some relate to R & D and others relate to the firm and its environment.