Table Of ContentTECHNOLOGY, INNOVATION and POLICY 9
Series of the Fraunhofer Institute
for Systems and Innovation Research (lSI)
Frieder Meyer-Krahmer (Ed.)
Globalisation of R&D
and Technology Markets
Consequences for National Innovation Policies
Proceedings of the International Conference
on 1 and 2 December 1997 in Bonn, Petersberg, Germany
organised by the BMBF and the FhG lSI
With 51 Figures
and 11 Tables
Physica-Verlag
A Springer-Verlag Company
Professor Dr. Frieder Meyer-Krahmer
Fraunhofer Institute for
Systems and Innovation Research (lSI)
Breslauer Str. 48
D-76139 Karlsruhe, Germany
and
Universite Louis Pasteur
Strasbourg, France
ISBN 978-3-7908-1175-9 ISBN 978-3-642-49957-9 (eBook)
DOl 10.1007/978-3-642-49957-9
Die Deutsche Bibliothek -CIP-Einheitsaufnahme
Globallsatlon or R&D and technology markets : consequences
for national innovation policies; with 11 tables; proceedings of the
international conference on 1 and 2 December 1997 in Bonn,
Peters berg, Germany I organised by BMBF and the FhG lSI. Frieder
Meyer-Krahmer (ed.). -Heidelberg; New York: Physica-Verl., 1999
(Technology, innovation and policy; Vol. 9)
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Table of Contents
1. Introduction and Policy Perspective
Introduction
Frieder Meyer-Krahmer........................................................................ 3
Opening Speech
Federal Minister Dr. liirgen Riittgers................................................... 9
Globalisation of R&D and Technology Markets -Consequences
for National Innovation Policy -"Petersberg Theses" -
liirgen Riittgers ...................................................................................... 21
2. Globalisation of R&D and Technology Markets -Trends,
Issues and Policy Implications
Globalisation of R&D and Technology Markets -Trends, Motives,
Consequences
Andre lungmittag, Frieder Meyer-Krahmer, Guido Reger. ................. 37
Emerging Global Economic Trends and Issues
Ulrich Hiemenz, Olivier Bouin, David O'Connor,
Dominique van der Mensbrugghe ........................................................ 79
Globalisation Implications for Industrial Relations
Sylvia Ostry ........................................................................................... 103
European Integration as an Answer to Technoglobalism
Luc Soete ............................................................................................... 117
New Challenges to Education and Research in a Global Economy
liirgen Mittelstrass ................................................................................ 133
VI
3. The Finn's Perspective
Improving Local Conditions for Innovation -
The Scandinavian Perspective
Yrjo Neuvo ............................................................................................ 141
Global Develop~ent of R&D -The Japanese Perspective
Hans-Georg Junginger ......................................................................... 149
Improving Local Conditions for Innovation in the
Pharmaceutical Industry
Norbert G. Riedel ................................................................................. 161
Policies to Strengthen Innovative Start-ups and SMEs
in Global Competition
Falk Strascheg ..................................................................................... 173
The Authors .............................................................................. 181
1. Introduction and
Policy Perspective
Introduction
Frieder Meyer-Krahmer
On the threshold of the 21 st century an intensive debate about globalisation of R&D
and technology markets is of crucial importance. Globalisation will carry on
changing the framework for company strategies and subsequently for public poli
cies. It will, in fact, contribute to global prosperity. However, the winners in a
closely interlinked world economy will probably be those locations which, owing to
competence and openness, become centres of information, communication and
knowledge application. It is the overall attractiveness of a location which is impor
tant. Future national innovation policy will have to increase this attractiveness, not
only by encouraging individual breakthroughs, but also by supporting innovative
networks, while at the same time optimising a number of other locational factors in
order to facilitate leading edge markets. Policies are beginning to react to these
challenges, however, there is still a considerable need for orientation in this area.
Qualitative factors and dynamic upstrearn-and downstream-interactions are increas
ingly driving R&D location decisions. Thus the motives and aims underlying the
internationalisation of R&D and innovation do not relate primarily to exploiting the
cost advantages of globally distributed R&D units, but emphasise more the value
added effects of transnational learning processes along the whole value-added chain
(research, development, production, integration into supply chains and logistic net
works, marketing/sales and services relationships). The motives for establishing
R&D units abroad are very much driven by learning from technological excellence
and lead markets and dynamic interactions between R&D, marketing and advanced
manufacturing. The attractiveness of a national innovation system will be more and
more determined by 'dynamic efficiency', the ability to support learning processes
in complex system innovations, and the interaction of specific institutions (firms,
R&D institutes, universities, policy administration).
R&D-intensive companies are undertaking far-reaching transformations of their
R&D activities. For many of these companies, the process of internationalisation in
research, product development and innovation has been accompanied by an increas
ingly selective focus on a very few R&D locations and the concentration of innova
tion activities at so-called first-class centres. A parallel trend to establish a single
centre of competence per product group or technology field is also taking place. The
dynamics of change depend upon an enterprise's global technology strategy, on the
one hand, and upon the size and resource base of the enterprise's home country, on
the other hand. As a consequence, strengthening the public research system is a
necessary, but not a sufficient, condition.
4
Due to the different facets which must be considered if the whole complex of
globalisation of R&D and technology markets should be illuminated, the conference
was structured around three topics:
• Globalisation and changes in industrial relations
• International R&D strategies and centres of competence: the firm perspective
• New tasks of national innovation policies.
However, in order to meet the different needs of the readers better, we rearranged
the various contributions in the following three parts:
(I) Introduction and Policy Perspective
(2) Globalisation of R&D and Technology Markets - Trends, Issues and Policy
Implications
(3) The Firm's Perspective.
Following this introduction, Jiirgen Riittgers, the Federal Minister of Education,
Science, Research and Technology, outlined in his opening speech five issues con
cerning innovation policy which have to deal with internationalisation and globali
sation. Summarised, these five issues are: 1. Increasing the visibility of regional
competence, 2. Merging research and application, 3. Supporting and facilitating
business start-ups, 4. Opening up the German education and innovation system, and
5. Building international bridges.
Further implications for national policies (research and technology policy as well as
other policy fields like social policy) resulting from globalisation generally, and
from technological globalisation particularly, are the central focus of the second
contribution of Jilrgen Rilttgers, the "Petersberg Theses". Finally, he concluded:
"We must thus seek to deal energetically with the challenges of globalisation. The
basic ideal of solidarity-based society security must be preserved, but the system
must be oriented to the future. The Federal Government is taking this approach. The
aim is to preserve the social market economy -in the interest of globalisation."
At the beginning of the second part "Globalisation of R&D and Technology Mar
kets - Trends, Issues and Policy Implications", the currently popular catchwords
"globalisation" or more in keeping with the subject of the conference "technological
globalisation" or "techno-globalism" must be more exactly defined, in order to pro
ceed to a precise description of the types and extent of globalisation of R&D and
technology markets. This is the starting point of the paper "Globalisation of R&D
and Technology Markets - Trends, Motives, Consequences' by Andre Jungmittag,
Frieder Meyer-Krahmer and Guido Reger from the Fraunhofer Institute for Systems
and Innovation Research (lSI). Based on a differentiation between three types of
technological globalisation, they present their chronological developments, extents
5
and dynamics. Subsequently, the internationalisation patterns of industrial R&D in
the three key technologies pharmaceuticals, semiconductor technology and tele
communications technology are described. In particular, the fact that the criteria of
choice of location for R&D depend not only on supply factors such as a well
developed research infrastructure, but also that demand factors are increasingly
gaining in significance in company decision-making, is focused on. Then motives
and consequences of globalisation of R&D and the foreseeable development trends
are examined. Also, the role of "lead markets" is presented. To conclude, the most
significant consequences and starting points for a national education, research and
technology policy are dealt with.
Ulrich Hiemenz, Olivier Bouin, David O'Connor and Dominique van der Mens
brugghe from the DECD Development Centre present a summary of the DECD
study "The World in 2020: Towards a New Global Age", which was published in
November 1997. Considering DECD members as well as non-members, this study
explores the implications of continued globalisation for the world economy over the
next 25 years in a quantitative way. Key questions were: What are the economic
benefits to be produced by globalisation? Is it worth the effort? Is continued
globalisation feasible and sustainable or are there going to be bottlenecks in food or
energy supply? What about social cohesion in the face of accelerated structural ad
justments? And, will poor countries be marginalised by international economic in
tegration? Model-based results are provided for a high growth scenario assuming a
full liberation of trade and capital flows by 2020, and a low growth scenario assum
ing "business as usual". A high growth scenario would result in substantially im
proved living standards across all regions and some convergence of non-members'
per capita incomes towards DECD levels. Conversely, the world would experience
much less income convergence under a low growth scenario. The study concludes
that in the event that the world economy were to realise high growth over the next
25 years, an agriculture or energy problem would not be likely, but there could well
be an environment problem, and widening wage inequalities in DECD labour mar
kets could remain a challenge.
Sylvia Ostry from the Centre of International Studies, University of Toronto, de
scribes "Globalisation Implications for Industrial Relations". She highlights that the
most fundamental implication of deepening integration is the pressure for conver
gence of domestic policies or, indeed, of domestic systems which comprise the full
array of institutional structures. Among the most significant institutional structures
in domestic economies and societies are those governing industrial relations, which
include not only labour-management or collective bargaining regimes, but also gov
ernment policies that directly affect labour markets. The impact of globalisation on
industrial relations is highly significant for a number of reasons, including firm
competitiveness, which is increasingly dependent on innovation, domestic growth
rates and hence job creation, and, of course, virtually all political and social dimen
sions of democratic countries. Thus, her paper reviews the extent and nature of con-
6
vergence in industrial relation systems within the OEeD during the 1980s and
1990s. It also attempts to deal with the question of the costs and benefits of diver
gence (working under different rules in a global economy). In doing so, the paper
focuses especially on transatlantic differences in industrial relations regimes, high
lighting the unique nature of the US model. Finally, the paper also briefly examines
the implications of infonnation and communication technology on labour market
outcomes and on innovation systems.
Luc Soete from MERIT in his contribution "European Integration as an Answer to
Technoglobalism" starts from the conclusion that national research and technology
policies have to play an important role in strengthening the efficiency of R&D in
vestment, developing the competitiveness of industry in the face of global competi
tion and in improving the quality of life. These roles in what is generally referred to
as science and technology policy are recognised and emphasised by practically
every EU member country, the current US administration, Japan and most other
OEeD and non-OEeD countries. However, Europe has had an "experimental" ad
vantage compared to the other Triad countries in developing supra-national science
and technology policies. The question addressed in his paper is whether Europe,
North America or Japan will be able to learn from this experience and use it to de
velop effective international supra-national policies and programmes to improve the
global productivity of their research and technology system, or whether the Euro
pean experience has actually developed in what could be called a "first mover" dis
advantage, and is in need itself of being redesigned and reoriented.
Moving from the general to the particular, the contribution of Jurgen Mittelstraj3
from the University of Constance concentrates on three points: I. In a global econ
omy not only economic structures change, but social structures as well. Institutional
isolation dissolves. This development also affects education and research. 2. Re
search up to now has mainly been defined by the distinction between pure basic
research, application-oriented basic research and product-oriented research. This
distinction no longer holds water, i. e., all research forms have a dynamic relation
ship to one another. They form a research triangle. 3. When economy becomes
global and research moves in a research triangle without any restrictions,
(academic) education has to move out of its disciplinary boundaries. The future of
research and learning, i. e. the future of (academic) education is problem-driven
transdisciplinarity. He also provides all three points with brief elucidations.
The third part, "International R&D Strategies and Centres of Competence: The Firm
Perspective" started with the contribution "Improving Local Conditions for Innova
tion - The Scandinavian Perspective" of Yrjo Neuva from Nokia Mobile Phone. In
his introduction, he emphasises that innovations are needed at all levels of the or
ganisation and in all kinds of businesses. Innovations should be found, in addition
to products, in production, management practices, in quality issues, or in other
words, in all corporate processes. Innovation consists of four basic elements:
