The Globalisation of R&D in Pharmaceuticals, Chemicals and Biotechnology: Some New Evidence

Abstract

The recent wave of studies of overseas R&D operations in MNEs¹ has clearly delineated the broad strategic positioning of such decentralised laboratories in the evolution of these globally-competing companies. Thus it emerges that whilst they sometimes still support the ability of overseas production operations to apply existing technology most effectively to their local markets through product adaptation, the increased pressure of global competition means that there is now a pervasive momentum towards allowing subsidiaries to develop products (i.e. to play a role in the innovation process itself) for particular (regional or even global) markets, through high-value-added creative operations that usually need to incorporate an extensive in-house R&D competence. Beyond this the studies also observe a growing tendency for some decentralised R&D labs in MNEs to stand aside from a direct association with production facilities and instead to carry out precompetitive (basic and/or applied) research using access to local scientific personnel and (through collaborative associations) host-country institutions (university laboratories; industry or independent research facilities).