Managing foreign know-how and local human capital: Urquijo Group and the rise of Spanish engineering firms

Abstract

This article examines the long-term impact of foreign multinational firms on the human capital of their host economies, looking into a knowledge-intensive industry, engineering consulting, through the lens of a traditional partner of foreign investors in late developing countries' business groups. Following a case-study approach, the research focuses on two leading Spanish consultants, Tecnatom and Técnicas Reunidas, both founded by Spain’s largest private business group, Urquijo, in collaboration with American firms. We show that the organisational structure of the group was crucial to recruiting local talent and developing learning strategies aimed at building specific capabilities and competing in the global market. Our main conclusion is that the enablement of local human capital, the basis of the so-called absorptive capacities, depends to a large extent on local learning strategies, which, as our cases reveal, depend much more on local actors and environment than on foreign MNEs.