Management of Technology and Innovation in Japan

Global Innovation and Knowledge Flows in
Japanese and European Corporations
Alexander Gerybadze
Global Innovation and Changing Patterns of Knowledge
Production
The internationalization of research and development (R&D) and of other knowledge-intensive
activities has been continuously increasing. Multinational corporations
(MNCs) are the major engine of growth and international technology transfer.
MNCs play a key role in the Japanese economy and in the European system of
innovation. They are pushing the frontiers and they need to respond to the changing
pattern of innovation in the global arena. Structural changes in global innovation
and transnational technology transfer lead to great challenges for managers as
well as for decision-makers in government agencies and within the research system.
The following trends characterize international innovation activities and new
modes of knowledge production.
1. The increased intensity and speed of innovation and accelerated product obsolescence.
Cycle times in consumer electronics and mobile communications
have been reduced to six months. Product development times have been shortened
in several industries, often induced through competitive pressures of
Japanese firms (e.g. in automobiles). More recently, other Asian countries are
pushing the frontiers and exerting pressure on Japanese and European firms.
2. More and more countries are building up strong R&D capabilities and this has
led to a greater global dispersion of innovation activities. The increased globalization
of R&D and the concomitant international sourcing strategies of multinational
corporations will be a core theme of this article.
3. A third important trend involves the stronger emphasis on application and demand-pull,
and the reduced emphasis on basic research and technology-pull.
We characterize this as “innovation moving downstream”: the core of valueadded
in the innovation process moves towards the application system and enduser
side of the spectrum. 1
4. Finally, the so-called Mode 2 of knowledge production replaces Mode 1. Mode
2 is characterized by open innovation, the stronger role of cooperative ties between
firms, greater multidisciplinarity and by problems and applications driving
the research agenda. This is considerably different from Mode 1 of knowl-
1 See Gerybadze (2004b, 106), Gerybadze, Reger (1999) and von Hippel (2005) for an
analysis of this trend towards „downstream innovation“.