What do we know about

globalization of innovation
and what are the
challenges for the future?"

Cristina Chaminade
(project in collaboration with Jan Vang)

CAS, August 28th, 2007

Outline

1. What do we know so far?

| Macroeconomic evidence
| Meso and microeconomic evidence
2. Open questions and challenges for the future
3. Opening the black box – the project on
Globalization of innovations

Chaminade
CAS, August 28th, 2007

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 Rationale of the project
Why this issue started interesting us?

| Increased international trade

z China will dominate 50% world trade in 2050
| Changes in the organization of production
z China controls a great number of global distribution
chains
| From cost-based competition to innovation-based
competion

No systematic evidence on the extent of this shift nor on

its global consequences

Chaminade
CAS, August 28th, 2007

Outline

1. What do we know so far?

| Macroeconomic evidence
| Meso and microeconomic evidence
2. Open questions and challenges for the future
3. Opening the black box – the project on
Globalization of innovations

Chaminade
CAS, August 28th, 2007

2
 1. What do we know so far?
Macroeconomic evidence

| Innovation seems to be highly correlated with

development (Fagerberg and Srholec, forthcoming)
| Catch-up is correlated with the development of
“appropriate technological capabilities (Fagerberg and
Godinho, 2004)
| Innovation continues to be concentrated in certain
regions – Technology clubs (Archibugi and
Castellacci, forthcoming)

Chaminade
CAS, August 28th, 2007

1. What do we know so far?

Macroeconomic evidence

| Limitations of existing literature

z Generally not capturing sectoral and regional
differences – Too aggregated data – Is this
adequate to capture dynamics of India and China?
z Limited to the use of certain indicators for which
there is international comparable data – Are these
the right ones?
z Not capturing interrelations between macro and
other levels of analysis – need for multilevel
models
z Not taking into account firms strategies

Chaminade
CAS, August 28th, 2007

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 1. What do we know so far?
Meso evidence: eg. R&D flows to India

| Growing literature pointing out to the emergence of a

new trend in globalization of innovation?...
z In 2005, 252 new FDI in R&D projects in China &
India (80% of South, East and SE Asia)
z India second most popular destination of offshore
R&D (only after US)
z Particularly for certain industries:
• IT
• Pharmaceutical and biotech
• ....
But yet mostly anecdotal, limited systematic
analysis...

Source: World Investment ReportChaminade

(2006); The Economist Intelligent Unit (2007)
CAS, August 28th, 2007

1. What do we know so far?

Meso evidence
AND extremely fragmented
| Development economics (Schmitz, Rabellotti,
Pietrobelli…): Global value chains, upgrading
| International business/Strategy (Cantwell, Yeung,…):
Strategy, outsourcing and offshoring of
production….but almost nothing on R&D…less on
innovation
| Economics, growth theory (Fagerberg, Nelson…):
catch-up processes
| Economic geography (Vang, Giuliani, Yeung…): From
endogenous models to more open models. Still rather
fragmented. Based on few cases. No comparative
analysis…

Chaminade
CAS, August 28th, 2007

4
 1. What do we know so far?
Limitations of literature

| So, our understanding of globalization of innovation is

limited due to the difficulties:
z Capturing industry and regional differences
z Combining different levels of analysis and linking to
firm strategies
z Systematic comparative analysis across the globe
z Integrating different bodies of literature: BVC,
strategy, outsourcing/offshoring, systems of
innovation, growth…

Chaminade
CAS, August 28th, 2007

What do we know so far?

Integrating the literature...

| Focus on the role of the RIS supporting

upgrading and globalization strategies of
indigenous firms
| ….a pilot case study

Chaminade
CAS, August 28th, 2007

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 1. What do we know so far?
Meso evidence: eg. R&D flows from India
Require- High Low Coding Testing Post
ment Level Level Production
Analysis Design Design Support
From the 80s
till now

Chaminade
CAS, August 28th, 2007

1. What do we know so far?

Meso evidence: eg. R&D flows from India

Require- High Low Coding Testing Post

ment Level Level Production
Analysis Design Design Support

Chaminade
CAS, August 28th, 2007

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 1. What do we know so far?
Meso evidence: eg. R&D flows from India

| Role of RIS supporting upgrading and

globalization – interesting preliminary results
on….
z Interactions in systems change over time –
time matters – fragmentation might not be
important at certain point it time
z Importance of universities in RIS
z Importance of social capital
z Importance of strategy
z …Important policy implications!
Chaminade
CAS, August 28th, 2007

1. What do we know so far?

A move from low cost to innovators?
What do we know? - different trajectories?
Strategy
High
innovation
Innovating in low Innovating in high
end value chain end value chain
Different demands to (China) (US, Europe)
the system according
to the strategy…e.g.
university-industry Imitating in low Imitating in high
end value chain end value chain
relationship (second tier Asian (India)
Low countries)
innovation
Value chain
Low added High added
value value

Systems IMP: This is just a point of departure.

of innovation More dimensions are important!
Chaminade
CAS, August 28th, 2007

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 Outline

1. What do we know so far?

| Macroeconomic evidence
| Meso and microeconomic evidence
| R&D flows to India
| R&D flows from India?
| A move from cost-base competition to innovators?
2. Open questions and challenges for the future
3. Opening the black box – the project on Globalization
of innovations

Chaminade
CAS, August 28th, 2007

2. Back to research questions....

Links between globalization + RIS + firm strategies

| How are local firms inserted in GVC and how does
this affect their innovative capacity?
| What is the role of localized interactive learning for
local firm upgrading?
| What is the importance of the RIS (local universities,
research centres, competitors, suppliers and
customers) supporting upgrading in GVC?
| What is the coupling between different strategies and
importance of local/global linkages
| …

Chaminade
CAS, August 28th, 2007

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 Outline

1. What do we know so far?

| Macroeconomic evidence
| Meso and microeconomic evidence
| R&D flows to India
| R&D flows from India?
| A move from cost-base competition to innovators?
2. Open questions and challenges for the future
3. Opening the black box – the project on Globalization
of innovations

Chaminade
CAS, August 28th, 2007

3. Opening the black box – the project

on Globalization of innovations
Aim

Understand the extent of the global distribution

of innovation activities and its impact in the
developed and developing world through
systematic comparative analysis of
different industries and regions across the
globe

Chaminade
CAS, August 28th, 2007

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 3. Opening the black box – the project
on Globalization of innovations

Latin America
Europe
Asia

Several projects…
Chaminade
CAS, August 28th, 2007

3. Opening the black box – the project

on Globalization of innovations
The research project / program
Latin America
SIDA/ Asia Africa Europe
SAREC
Project SIDA-VR
With VR
Module 3. South Africa EU
ECLAC project
Technical cooperation with cooperation project
Central-America
+
VR
Automotive Automotive Automotive Automotive Automotive Automotive project
Mexico Central America India China South Africa Sweden

Software Software Software Software Software Software

Mexico Central America India China South Africa Denmark
Module 2
Module 1

Film Film Film Film Film Film

Mexico Central America India China South Africa Denmark

Biofuels Biofuels Biofuels Biofuels Biofuels

Brazil India China Mozambique Sweden

SIDA
Chaminade project
CAS, August 28th, 2007

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 3. Opening the black box – the project
on Globalization of innovations
Methodology
Combined methods
• Literature review
• Survey (to analyze the extent of the globalization of
innovation) – Same questionaire all over the world
• Semi structured interviews – Same guide all over the
world

Outcome: Unique data base with comparable information at

firm and system level on: Strategy, Capabilities,
Linkages and Globalization

Chaminade
CAS, August 28th, 2007

3. Opening the black box – the project

on Globalization of innovations
Methodology

| Questionnaire will have three parts

1. Common to all industries and countries
2. Country/region specific
3. Industry specific
| And 3 blocks of questions

- Strategy of the firm

- Capabilities and linkages
- Globalization
Chaminade
CAS, August 28th, 2007

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 Closing up

| Important challenges for the future

| Long term and ambitious project….very open YET!

| Suggestions for the methodology?

| Questionnaire?
| Issues to consider?

THANKS!
soon in www.globalization-innovation.com

Chaminade
CAS, August 28th, 2007

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