Abstract

This paper analyzes recent data on the “globalization” of industrial R&D, emphasizing that the patterns of international R&D investments differ significantly among industries, and seem to differ among different activities within the innovation process. I distinguish among the creation of new technologies (often identified with invention), the development of these inventions into commercially attractive products, and the production and marketing of these new products. None of these activities is well measured within industrial economies, and our measures of their international dimensions are even less reliable. The available evidence on trends in each of these three activities suggests that the most significant increases in “internationalization” have taken place in the exploitation of new technologies, largely as a by-product of increased crossborder direct investment in production activities. But at least some evidence indicates that much of the technology creation activities of large firms remains concentrated in their home economies.Nevertheless, the structure of activity in technology development and exploitation resembles the pattern of trade in industrial manufactured products—increased specialization in specific technologies or innovative activities that relies on a supportive national infrastructure and innovation system, combined with declining costs of communication and crossnational investment. As a result, intrafirm and interfirm networks for the support of innovation are developing rapidly throughout the world. The growth of these networks is one of many indicators of the development of a “multipolar” science and technology system in the world economy.

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