The Persistence of Home Bias for Important R&D in Wireless Telecom and Automobiles

Abstract

We argue that in this age of globalization, important R&D-in automobiles and wireless telecommunication-exhibits a decisive home bias. This contrasts with findings on the rate and extent of globalization of the aggregate of activities classified as R&D. Sorting out R&D was deemed important at the outset by the firm, and comparing that to "regular" R&D by the same firms enables the argument.We take our findings on location a step further by examining, for this category of R&D, the reasons for nonglobalization.

Unbundling R&D and Manufacturing: Postindustrial Myth or Economic Reality?

“…We further call into question the idea that increasing R&D spending leads to innovation, new products and services, and economic welfare. On the contrary, we argue that as knowledge intensity of economic activity increases, unbundling of functional activities may no longer be possible: R&D, innovation, design, and branding may be activities that are intimately related with the manufacture of physical products (e.g., Cohen & Zysman, 1987; Cohen, Di Minin, Motoyama, & Palmberg, 2009; for the opposing view see Breznitz, 2007), in environments of rapid change, complexity, and uncertainty in particular. Further, manufacturing activities are not merely linked to knowledge‐intensive activities, they are themselves knowledge‐intensive activities in these environments.…”

Observing regional divergence of Chinese nanotechnology centers

“…At the same time, they acknowledged that only weak evidence had connected knowledge spillovers and defined distance (p.417). Cohen et al [42] demonstrated that firms could manage a 200 km distance if the transaction was clearly defined between different divisions of development centers, but that closer proximity was necessary for tight and uncertain coordination. Lastly, Zucker, Darby, and their colleagues demonstrated that scholars level, and does not necessarily determine the process or geographic dimension of technology development taking place at the state level.…”

Science, Technology and Innovation Policy for the Future

“…This innovation systems perspectives stressess system and evolutionary factors including the role of learning within and between firms, interactions among enterprises and institutions, and systems of knowledge development and innovation. Moreover, although many sectoral value chains are international, R&D in certain sectors such as automobiles and wireless telecommunication has been found to evidence an explicit home country hi as (Cohen et al 2009). Sectoral classifications suggest that some types of firms, such as science-based, are more likely to adopt new discovery driven innovations (Pavitt 1984).…”