Evolution of foreign R&D centers in China - an output-oriented perspective

[ Project: Sonja Hilbig ]

[ Advisor: Prof. Cornelius Herstatt ]

Beginning at the end of the 1990s, a growing number of multi-national corporations (MNCs) started to set up R&D operations in the People's Republic of China to develop capabilities to better serve the large and promising market in the country and tap resources connected to Chinas large working force and favorable government support for R&D investments. While in the initial phases of this phenomenon foreign R&D work in China thus was rather focused on support for marketing, manufacturing and local customers as well as on locally adapting and developing products for the Chinese market (Gassmann/Han, 2004), in recent years R&D work in China becomes more global. Fueled by rising skill-levels needed for an international working environment, a dynamic Chinese scientific and economic environment starting to open to the world, as well as by the perceived scarcity of engineering talent in developed countries, companies are thinking about how their Chinese engineers can contribute also beyond the immediate borders of their country. Products that initially had been developed for China only are now also introduced to the MNC's home or other developing markets (Immelt et al., 2009), global products such as software now contain significant modules written by software engineers from Beijing, Shanghai or Shenzhen (Microsoft, 2010).

While the process of setting up R&D operations in China, as well as the major management issues connected to the initial phases of this process have been analyzed by a number of studies (e.g. von Zedtwitz (2004, 2007), Lu/Liu (2004), Han (2006), Khurana (2006)), the evolution towards mature R&D centers that are fully integrated into their mother companies' global R&D networks, making substantial contributions to the development of global products has not yet been the focus of extensive research activity.

The proposed research project aims to thoroughly study this issue by taking an output-oriented perspective, describing the development process of foreign R&D centers in China from establishment to full integration into global innovation networks and contributing to the understanding on how MNCs can successfully develop their Chinese R&D organizations to support substantial contribution making in the context of their global operations networks.

Selected References

• Gassmann, O. and Han, Z. (2004) Motivations and barriers of foreign R&D activities in China. R&D Management, 34, 4, 423-437.
• Han, Z. (2006) Managing foreign R&D activities in the P.R. of China. Bamberg: Difo-Druck.
• Immelt, J., Govindarajan, V. and Trimble, C. (2009) How GE is disrupting itself. Harvard Business Review, October, 56-65.
• Khurana, A. (2006) Strategies for global R&D. Research – Technology Management, March-April, 48-57.
• Lu, L. and Liu, John (2004) R&D in China: an empirical study of Taiwanese IT companies. R&D Management, 34, 4, 453-465.
• Microsoft (2010) About Microsoft Research Asia. http://research.microsoft.com/en-us/labs/asia/overview.aspx
• Von Zedtwitz, M. (2004) Managing foreign R&D laboratories in China. R&D Management, 34, 4, 439-452.