Should I Stay or Should I Go ? The Choice of R&D Localization Near Lead Users

Abstract

The geographical location of R&D teams is a key issue in innovation management. In particular, firms will have to choose between centralization around their headquarter or decentralization of members of their R&D teams near customers or specific knowledge. However, few studies have analyzed in depth the importance of decentralizing innovation teams as close as possible to lead or intensive users, adopting a processual approach. This article investigates the relevance of this choice of localisation during four phases of the innovation process : needs recognition, search for solution, development and diffusion. More precisely, we pursue two objectives: (1) to identify, for each step of the innovation process, the benefits and drawbacks of this strategic choice ; (2) to identify the different levers, whether cognitive, organizational, social, institutional or electronic, that innovations teams can use to overcome the obstacles due to delocalization. Based on a single emblematic case study, our results show that this choice of location near lead users has a global positive influence on the innovation process, but of varying intensity, depending on the stages of the innovation process. It seems most relevant for 2 phases: the needs recognition and the development phases. In order to overcome the handicaps linked to the geographical fragmentation of the company, teams will use complementary organizational, cognitive, social and electronic levers.