Managing R&D in China

Zusammenfassung Irrespective of the global financial crisis of 2008, and in some cases exactly because of the unwillingness of multinational companies (MNCs) to invest in home-based R&D, China has continued to attract foreign investment in R&D, despite the fact that it has still relatively little innovation of its own and a weak intellectual property regime. For most MNCs, doing business in China remains a challenging proposition, given their general unfamiliarity with local business culture, local institutions, and local operations. These challenges are acerbated in R&D and innovation, usually among any firm’s most sensitive function and thus one of the most controlled and protected. Do cost advantages really outweigh the risk of losing technology to Chinese competitors? Do Chinese customers really require locally developed products, or do transfers of localized products suffice? Are local Chinese R&D centers possible conduits for refreshing a firm’s global innovation capability? In this chapter, I summarize some of the recent research and findings on managing R&D in China, that any China-based R&D must be part of an overall China strategy, and that it must also part of a global R&D effort in order to avoid the typical pitfalls of managing R&D in a developing country.