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general, arises from the requirements of the operating environment as well as the characteristics
of the product or service developed. However, the need for functional integration and
thus the pressure for co‐location varies from company to company, depending on a number
of factors discussed in this article.
This has been the first step in laying the foundation for rigorous theory‐driven empirical
study of co‐location. The next step would be to craft a measurement instrument explicitly directed
at addressing the need for co‐location, actual degree of co‐location, environmental
characteristics, product characteristics, as well as measures of performance, and examine the
hypotheses presented in this article in more detail. The ultimate measure of performance is
of course financial performance, but clearly more proximate measures are needed to examine
the causal path from functional integration to financial performance.
As a final note, although the interviews conducted as part of this study were exploratory, it is
noteworthy to mention that the external drivers or ”locational pulls” were rarely mentioned
when the interviewees described the location decisions of R&D and manufacturing in their
own context. In the words of one interviewee: ”90% of it is about internal interdependencies
and coordination issues, 10% location‐specific drivers”. While it would be foolish to suggest
this figure as a universal truth, it is not at all foolish to submit it as an interesting hypothesis
worthy of further theoretical and empirical scrutiny.