Individualism and Interdependence in the Technological Development of MNEs: The Strategic Positioning of R&D in Overseas Subsidiaries

The growth of decentralized R&D in MNEs1 is central to the ways these companies approach the new competitive pressures of the global economy of the late 20th century. As these companies seek to define positions for technology in the generation of sustained competitiveness, roles for overseas R&D laboratories can emerge at three distinct levels. In the short term, the pressures of global competition mean that MNEs need to produce their well-established products as effectively as possible. Laboratories operating within the subsidiaries that produce such products may support their operations by assisting in the adaptation of the manufacturing process to host-country conditions and of the products to local tastes. However, to carry competitiveness into the medium term MNEs need to substantially upgrade their product range, introducing new generations that embody new concepts that extend the industry’s scope. As a weapon in global competition, such product innovation needs to embody clear international dimensions.2 Though such radical evolution of product scope is still likely to embody substantial elements of the company’s existing stock of knowledge (that is, remain within an established technological trajectory), these major operations in product development will also require the crucial addition of new technology inputs in order to operationalize this knowledge in the emerging commercial context.