Innovation Systems, Internationalization of R&D, and Innovation Policy: Exploring MNEs’ Search for Competences

Abstract

This paper aims to contribute to the discussion on firms’ internationalization processes, and in particular, discuss how innovation policy instruments may complement national and/or locational innovation systems, thereby addressing the bias towards firms’ search for competences abroad in the internationalization literature. This conceptual paper draws from innovation systems and internationalization literature to develop under which conditions claims of a location’s attractiveness will be consider by multinational enterprises (MNEs) in their search for competences. The author argues that firms’ internationalization of innovation, systems of innovation, and innovation policy instruments create a potential for interaction, thereby enabling the exploitation of existing linkages and complementarities between them. It provides evidence that innovation tend to cluster in certain locations and/or regions, thus, rendering those locations attractive for firms’ internationalization processes and activities, with eventual implications for host countries’ organisational and institutional change and/or response. Ultimately, the relationships between a firm’s capabilities (i.e. internationalization and innovation), together with mediating factors such as institutions, policy makers, and innovation actors, will produce the effect that firms’ competence would improve through the phenomenon of globalization of innovation. The paper concludes that this improved competence of firms as a result of internationalization of innovation will further be a function of how firms respond to the “systemic” nature of innovation

Keywords: Innovation systems, multinational enterprises (MNEs), internationalization, innovation policy

DOI: 10.7176/ISDE/10-4-01

Publication date:May 31^st 2019