The Upgrading of Multinational Regional Innovation Networks in China

Abstract

Theories of globalization of innovation assume a hierarchical structure of location in the global division of innovation, with advanced innovative activities in the advanced economies and routine ones in the developing economies. This study attempts to explain why multinational corporations (MNCs) have localized a wide spectrum of innovative activities to China since 1995, which range from process innovation and product innovation to basic research. By comparing the dynamic transformation of two MNCs' regional innovation networks (RIN) in China – namely Motorola and Microsoft – this essay argues that the innovation upgrading process can be better understood through examining the interaction between the MNC subsidiary innovation centres and the local institutions.

Keywords:

• China
• local institutions
• multinational R&D centres
• regional innovation networks
• upgrading evolutionary process

Notes

¹ Even though ‘innovation’ is a more appropriate term for this, I use ‘R&D’ and ‘innovation’ interchangeably. The main reason is that many MNCs use ‘R&D centre’ as the official title of their innovation centre, and the public discourse in China also uses ‘R&D centre’ as well.

² A conference on ‘global R&D in China’ held in Nanjing in May 2005 gathered all the prominent scholars and practitioners in this field. For more information, visit the conference website. Available http://www.csun.edu/ ∼ ys9503/Nanjing_meeting/Nanjing_meeting_program.htm

³ Microsoft's annual ‘TechFest’ is designed to let different research teams from different MSRs come together to present their new ideas and findings. ‘TechFest’ is a rare occasion in which ‘R’ and ‘D’ people meet face to face. In fact, many new collaborations begin from this meeting.

⁴ Special Interview with Liu Qingfeng, CTI forum 9 September 2004. Available at http://www.ctiforum.com