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Recommended Readings: Business Strategy


In the past, companies kept most of their R&D activities in their home country. They thought it important to have R&D close to where strategic decisions were being made. But today many companies choose to establish R&D networks in foreign countries in order to tap the knowledge there or to customise products for those markets rapidly.


Adopting a global approach means linking R&D strategy to a company's overall business strategy. Companies must determine whether an R&D site's primary objective is to augment the expertise that the home base has to offer or to exploit that knowledge for use in the foreign country. That determination affects the choice of location and staff. For example, to augment the home base laboratory, a company would want to be near a foreign university. To exploit the home base laboratory, it would need to be near large markets and manufacturing facilities. Leaders of these R&D set ups must combine the qualities of good scientist and good manager, know how to integrate the new site with existing sites, understand technology trends, and be good at gaining access to foreign scientific communities.