The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&Dpharmaceutical companies in 1960, there were a total of three laboratories operatingoutside of the U.S. By 1997 this number had risen to 25, which means that U.S. pharmaceuticalcompanies had nearly as many R&D facilities within the U.S. as they didabroad (Chacar & Lieberman 2003).There are, however, differences between the companies; some have centralized R&Dlaboratoriesand some perform more R&D at sites in several countries. The reasons fordifferences in strategy, and the past and present thinking about where to locate theseactivities, are explored in the following section.6.3 Rationale for Existing Locations of R&D LaboratoriesIndustry history should be kept in mind when seeking rationale in the big pharmaceuticalcompanies´ localization of R&D. Having started as chemical companies, theylocated R&D laboratories in places that might not be considered hotbeds for life-scienceR&D today. As these companies grew into large multinational companies, investmentin existing facilities increased.Although history has an impact, the locations chosen for new corporate R&D investmentsare mostly based on careful planning (Chacar & Lieberman 2003). Creating anew facility is expensive not only in terms of direct cost, but also time. Companiestherefore centralize their R&D activities around the original, large research site. Thereare also companies that have adopted a more decentralized strategy, establishing R&Dsites in various countries with the aim of gaining access to local research (“access”refers not only to interaction, but also the recruitment of researchers).Even companies that formally pursue centralized strategies have R&D sites in differentparts of the world. It is interesting to question why the sites that are active todaywere initially chosen. You can divide the reasons into several categories: historic(related to company origin), cost (tax relief and subsidies offered by certain countries),research-strategic (close access to researchers in specific fields), and/or marketopportunity. Figure 6-3 summarizes the rationale behind the locations of the majorityof three companies’ R&D sites, as provided by their executives. (The rationale foreach area is specific to the three companies interviewed and is thus not representativefor all companies).156