Saturday, October 1, 2011

Management and Organisation of Knowledge Creation in EU MNE subsidiaries

Just in case you are interested in some recent work we had done with colleagues from SPRU, Taiwan and China, please check out our recent working paper “Management and Organisation of Knowledge Creation in Emerging Markets: a Perspective from subsidiaries of EU MNEs” available at

Authors:Vandana Ujjual(SPRU), Parimal Patel(SPRU), Rishikesha T. Krishnan(IIM, Bangalore), Srivardhini Keshavamurthy (IIM, Bangalore), RueyLin Hsiao(National Cheng-Chi University, Taipei) and Frank Yan Zhao (Shanghai University, China)


A key emerging trend in the globalization of innovation is that an increasing share of R&D is being undertaken in Emerging Markets, especially in India and China. This paper focuses on the involvement EU MNEs in this process. It is based on 22 interviews conducted with managers of R&D centres of 15 EU-based companies located in India and China. These companies are amongst the leading R&D spenders in 3 industries: ICT, Automobiles and Pharmaceuticals.

The declared aim of all the surveyed companies is to increase their R&D in Emerging Markets, especially India and China. The two main driving forces for this process are firstly the large market potential of these countries and the availability of a large pool of well-qualified scientists and engineers. A great deal of the activities in India and China are concerned with adapting products and processes to the local market. At the same time a number of companies are devising low cost products specifically for these markets. Another explanation for the growing volume of R&D in Emerging markets is that some of the long established R&D and engineering centres of EU firms have evolved from providing low-cost, low-level support for peripheral activities to becoming global centres for excellence providing support to the R&D carried out in the rest of the company. This is especially the case for design and development of software in the ICT companies in India. It is also important for both software and engineering services for the Automobile companies.

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