Advances in information and telecommunications technologies and the political processes that open up important markets (Eastern Europe, China, India) give rise to substantial economic opportunities. Up to now, such opportunities to benefit from globalisation have mainly been taken in production and sourcing (outsourcing, offshoring). Now, however, the trend has spread to include the innovation process. Companies can generate competitive advantages by transforming technological and market stimuli from around the world into successful products and efficient processes. As a basis for this, firms need the strategic abilities to identify which stimuli from throughout the world have the highest potential and to absorb these. Furthermore, these inputs must be integrated into the firms own internal know-how so that they can be made into successful innovations through suitable organisational measures. These systems of resonances are largely depicted as a black box. This is the starting point for our project, which investigates how the necessary competencies, processes and structures can be created within firms. It is the aim of the project to develop recommendations for management as to how firms can improve their competitiveness through global systems of resonance.
We focus on the early stages of international innovation activities, i.e. the organizational processes through which promising ideas from around the globe are collected and evaluated. We ask: What characteristics make foreign knowledge interesting to domestic R&D managers? We envision this process as a balancing act between direct transaction costs for communication and coordination and indirect transaction costs from overlooking or misinterpreting important global trends. These hypotheses are tested through a conjoint analysis among 158 heads of R&D departments of German high-tech firms. We find that uncertainty avoidance is the most important driver. Radically new ideas from dynamic markets are most attractive and must not be overlooked. Complementarities with existing knowledge stocks and low language barriers are also important but to a lesser degree. Interestingly, we find no distinction between market and technological impulses.
Discussion and Working Papers
Sofka, Wolfgang (2007), What Makes Foreign Knowledge Attractive to Domestic Innovation Managers?, ZEW Discussion Paper No. 07-055, Mannheim. Download
01.04.2006 - 31.01.2007
Economics of Innovation and Industrial Dynamics