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OCR for page 35
Here or There? A Survey of Factors in Multinational R&D Location
Concluding Remarks
The major findings of this study can be summarized as follows:
Decisions on site location are complex and involve many factors.
Although there is and will be some relocation of R&D, the dominant feature is one of expansion of corporate R&D. In addition, there was more relocation within a home country than relocation to sites outside the home country.
The factors behind the choice of a particular country are not about home versus another country, rather, they are about a developed country versus a developing country.
In an emerging economy the most important factor for selection of the site is the growth potential of the country.
In developed economies the most important factors are the quality of R&D personnel and the strength of intellectual property rights.
The role of universities and university faculty is important in selection of sites. This factor is often overlooked in much of the public discourse on R&D site selection and offshoring.
Costs are important in the selection of an emerging economy site, but costs are of less importance than a number of other factors. Costs are not a deterrent in selecting a site in a developed economy. This may seem to be contradictory, but it may stem from the finding reported here that the nature of R&D conducted in a developed economy tends to be different
OCR for page 36
Here or There? A Survey of Factors in Multinational R&D Location
from that conducted in a developing economy. This leads to the final notable finding.
The intellectual property regimes in emerging economies are poor and are a detractor for selecting sites in such economies. Intellectual property regimes are an important attractor for developed economy sites. R&D using “new” technology or science is more likely to be done in developed countries.
Future directions of research based on the survey results include more formal econometric analysis of the data in a search to uncover additional regularities in the decision-making process on site selection. In addition, comparisons between India and China, the two countries where the greatest expansion is expected to take place, are possible. Industry differences have not been discussed here. For the broad questions asked in the survey, preliminary analysis suggests that there are few industry differences. This might follow from the fact that there are only a few industries with many respondents. Some industry analysis, however, is possible, since for five of the industries there are 20 or more respondents.
Representative terms from entire chapter:
business units
