Multinational Subsidiaries and Innovation Policy in Central and Eastern Europe: Alignment and Autonomy

The countries of Central and Eastern Europe (CEE) are in the process of emerging from a difficult process of transition out of a rather inward-looking socialism, toward fuller integration into the global economy. The countries considered in this study all became members of the EU during 2004. This implies new sets of responsibilities for autonomous development, alongside and in parallel with the extent of harmonization with EU activities (Hannula et al., 2006). The transition process was, in innovation terms, largely headed by an inrush of multinational companies (MNCs), but the question arises of how far these can be relied upon to continue being the main drivers of innovation into the new stage of development. In order to stand on their own feet, and develop autonomous and indigenous mainsprings for growth, CEE countries have to absorb technologies generated elsewhere into a wide range of their productive practices, and to begin to inaugurate (or relaunch) up-to-date technologies of their own. This carries strong implications for the autonomy of the subsidiaries of the MNCs, which are the main focus of this chapter. The study is therefore concerned with the interaction between autonomy at the national/regional/local level and autonomy between MNC parent companies and their subsidiaries. This issue is central to the perspective of ‘alignment’, which we have developed in other work on these and other countries (summarized in McGowan et al., 2004).