Overseas R&D and the strategic evolution of MNEs:: evidence from laboratories in the UK

The growth of decentralised R&D units in multinational enterprises (MNEs) is seen as a central element in the ways in which such companies are reformulating their global strategies, as they reposition their worldwide operations in the face of an increasingly intense international competitive environment. Two increasingly important strategic roles for overseas R&D units in MNEs are discerned (and documented using evidence from labs in the UK). Firstly, they enter into new globalised approaches to innovation in MNEs by developing new products, or very distinctive product variants, for key segments of the global marketplace (here Europe). These labs have a very close operative association with other localised functions (marketing, engineering, management). Secondly, decentralised labs may take positions in global programmes of precompetitive investigation (coordinated by their parent MNE group), in which they carry out specialised pieces of basic research that reflect particular areas of expertise within the host-country (here UK) science base. Overall these decentralised R&D units are seen as ways in which MNE groups can turn to their advantage the need to;respond to two key elements of the global environment, i.e., market heterogeneity and technological heterogeneity. (C) 1999 Elsevier Science B.V. All rights reserved.