The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&DR&D activities have been the result of strategic partnerships, also known as “strategictechnology partnering” (STP) (Hagedoorn 2002). However, because information aboutSTP is fragmented and ill-defined, available indicators of international STP have clearquality drawbacks. Despite the fragmented and uncertain nature of available STP information,recent literature agrees that international, inter-company alliances havebecome more frequent over the past two decades (Hagedoorn 2002).There are clear reasons to believe that systematic technology cooperation has becomean institutionalized form of strategic R&D among multinational companies. Thesecollaborative activities started to grow rapidly during the 1980s, especially in the informationand communication technology, biotechnology and composite materialssectors. By the early 1990s more than half of all alliances in Europe were based onagreements, including joint ventures, contract-based cooperation projects, and FDIbasedcollaboration using ownership as substitute for an explicit agreement.Which are the motives behind strategic technology partnering? Why is this form ofinnovation network formation growing? The literature (see for example Hagedoorn1993 and 2002) lists a variety of reasons such as:• Companies in so-called high-tech industry sectors are forced into strategic R&Dcollaboration by high R&D costs, in combination with the increasing uncertaintiesassociated with strategic projects.• By joining forces with other companies, each individual company loses the opportunityto capture monopoly profits that may follow a successful innovation. Incontrast, the cooperation brings about reduced risk. An alliance can guarantee thatthe individual company receives a flow of knowledge about technical solutions andmarkets – partly as a by-product, irrespective of whether particular R&D effortsare successful.• Strategic partnering enables the participants to transfer technologies more efficiently.Moreover, partnering facilitates the exploitation of complementaritiesamong participants with regards to experiences and knowledge.• The partnering alliances can provide the participating company with knowledgeabout new markets and customer niches.• Partnering with regard to R&D cooperation between several firms offers theparticipants additional benefits. It can shorten the development time, and hencespeed the market introduction of novel products and services.• Finally, in the course of cooperation between companies, each company will keepitself informed about technological opportunities that develop over time among itscollaborators.94