Research Project Global Innovation

Innovations are increasingly seen as a source of economic growth and as a useful instrument to face the competition brought about by globalization. Not surprisingly, innovations have acquired a key-role in the growth and competition strategies of many firms, as indeed of many countries and economic regions.

At the same time, a strong trend of internationalization of R&D and even globalization of innovation ("Global Innovation") may be observed across all countries actively participating in the global economy. Traditionally, there have been examples of R&D work by foreign companies in developed, industrialized economies . For instance, affiliates of foreign-owned firms spent nearly 12.2 billion euros on R&D in Germany in 2003. At the same time foreign-based affiliates of German firms spent nearly 11 billion euros for R&D work abroad. Latest figures (available for year 2007, released 2010) suggest that affiliates of foreign firms spent 13.5 billion euros in Germany for R&D purposes whereas foreign affiliates of German firms spent 9.5 billion euros on R&D abroad. Germany's Chemical industry spends over 44% of its R&D budget abroad; the automotive industry 15.6%. About one-fourth of R&D-spend in Germany is carried out by affiliates of foreign firms. Even greater is the "globalization of innovation" in counrties like the USA.

Relatively recently, this phenomenon has also spread to emerging countries known for their scientific capabilities. This trend is reflected in the increasing number of offshore research and development (R&D) centers located in emerging economies such as China and India and in the increasing number of patents granted to multinational firms on inventions made at such foreign locations, as a recent analysis (Nov. 2007) by us shows. The activities are often organized in the form of an offshore captive center, an international joint venture, a third-party offshore outsourcing contract (contract R&D), or a cooperation with academic and/or research institution abroad.

Under the aegis of Research Project "Global Innovation" we seek to observe, analyze and forecast developments in the field of globalization of innovations. This project is an initiative of the Institute of Technology and Innovation Management (TIM) at Hamburg University of Technology (TUHH) and has been launched in January 2007. It originally consisted of two major studies to understand the impact of Offshore R&D. In the meantime its scope has been extended to include trends like "Bottom of the Pyramid" (BOP), "Grassroot Innovations" and "Frugal Innovations". Additionally, we also monitor outward foreign direct investments (FDI) from emerging economies, especially in their technology-seeking aspects. India and Indo-German economic relations stand in a particular - though non-exclusive - focus of our studies at present.

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