R&D Internationalization as Mechanism of Innovation in Global Enterprises

Internationalization of Research and Development (R&D) allows transnational companies (TNC) to access different and important resources overseas, which may lead to the improvement of their technological innovation. The literature in this field has been mostly created from studies of TNCs coming from developed countries. This chapter presents some of the main topics the literature addresses on R&D internationalization, then it will explore and verify how companies in developing countries internationalize their R&D activities. In order to do so, a bibliographic review about strategies of internationalization of TNC operations, as well as motivating factors and management of R&D internationalization have been conducted. The chapter finishes by presenting a case study about international R&D conducted in a Brazilian TNC. The results enabled to evidence that, like developed countries TNCs, developing countries’ companies also seem to perform internationalization of R&D activities with very similar characteristics.

The Recent Internationalization of Brazilian Companies

The recent wave of internationalization among Brazilian companies differs from past experiences, in terms of volume, reach, destination and quality. Brazilian multinationals are not restricting their activities solely to regional markets, nor are their first steps entirely directed towards South America. In amount of investment and number of subsidiaries there are signs they prefer assets and activities in advanced markets—including Europe and North America—where they compete on an equal footing with major conglomerates for a share of these markets. Some Brazilian companies have previous internationalization experience, and a significant portion had been prepared and initiated outward growth in the 1990s, after the economy opened up. However, the boom of internationalization that began in 2004 took place in such unusual conditions as to deserve highlight and special analysis. This chapter discusses the recent expansion of Brazilian multinationals as a result of: (1) the functioning of a more responsive and targeted system of financing, (2) transformation of the Brazilian productive structure, which led to the emergence of a group of companies seeking internationalization as a strategy, (3) preference for seeking more advanced economies as a means to expand access to new markets and suppliers, as well as to absorb innovations and technology, (4) the State’s performance in several dimensions, especially in financing the implementation of policies which support the creation of large national groups with a presence in the globalized market.

Self Regulation on Innovative Products Choice

This chapter explores how choice goals influence consumers’ innovativeness in a product category domain. The intentions to adopt new products are guided by promotion and prevention self-regulation systems. Thus, two of the choice goals were classified as promotion goals—justifiability and choice confidence—and two were classified as prevention goals – anticipated regret and evaluation costs. Two groups emerged from the analysis: one named “most innovative” and another called “less innovative.” When comparing the groups, the results show that the “most innovative” cluster demonstrated higher choice confidence, higher justifiability and was more capable of avoiding a possible choice regret. The differences found in the group analysis highlight the need of understanding in further detail how consumers behave during the choice process of innovative products. Therefore, the Regulatory Focus Theory has been shown to be very important for understanding the choice process, especially for the innovation adoption.

Taxonomy of Marketing Core Competencies for Innovation

This chapter argues there is a lack of taxonomy of the various marketing capabilities that are necessary to achieve the market success of innovation. It tries to fill this gap by proposing a model that subsumes two classes of Marketing Core Competencies (MCC) for successful innovative companies. The first category of core competencies is related to a superior ability of the firm to identify and to connect the actual market needs with the innovation during the preparation of the new product launching phase. Once the innovation is on the market, a second group of core competencies is associated with the capacity of the firm to ease the customers’ tensions in order to facilitate the acceptance of the innovation and turn it into a market success through adoption and diffusion. In conclusion, the chapter underlines the importance of the place of these two categories of Marketing Core Competencies (MCC) in innovative firms.

Choosing Locations for Technology and Innovation Support Centers

This chapter discusses the structuring of problems of location of Technology and Innovation Support Centers (TISC) through multicriteria analyses to identify factors of demand and supply of these services. The methodology uses quantitative and qualitative elements, establishing a sequence of steps that include a variety of aspects ranging from criteria preferences to global valuation of the model. Multicriteria analysis was applied to the choice of geographic locations for Brazilian Technology Centers, allowing for the identification of the most suitable regions for the creation of technology centers and revealing particular characteristics of the dynamics of such services in the regions in question.

Dynamic Capabilities and Innovation Radicalness

The aim of the present chapter is to theoretically analyze the determinants of firm’s innovation radicalness (the degree of novelty incorporated in an innovation) from a dynamic capabilities-based view of competitive advantage. Nevertheless, due to the fact that dynamic capabilities’ concept suffers from certain terminological inconsistence and its components are not entirely clear in current literature, we first need to carry out an in depth review and analysis of this construct. Based on this review, we argue that dynamic capabilities arise from firm’s orientation to knowledge exploration that enables the generation of new organizational capabilities, and suggest external knowledge acquisition and internal knowledge combination as its key components. Taking into account this reasoning, we propose a theoretical model on dynamic capabilities deriving some relevant propositions considering innovation radicalness as its core output and the key element to compete in dynamic environments.

Firm-Specific Factors and the Degree of Innovation Openness

This chapter investigates the topic of how open innovation is actually implemented by companies, according to a conceptual approach in which open and closed models of innovation represent the two extremes of a continuum of different openness degrees; though, these are not the only two possible models. By means of a survey conducted among Italian manufacturing companies, this chapter sheds light on the many different ways in which companies open their innovation processes. Four main models emerge from the empirical study, which are investigated in depth in order to understand the relationship between a set of firm-specific factors (such as size, R&D intensity, sector of activity, company organization) and the specific open innovation model adopted by a company.

Social Innovation, Environmental Innovation, and Their Effect on Competitive Advantage and Firm Performance

The proposal below provides a special emphasis on the relationship between businesses and natural environment. It is argued that the inclusion of environmental criteria to business activities promotes the creation of new core competencies, offering a creative and innovative perspective to the organization that can lead to the achievement of sustainable competitive advantages. More specifically, we analyze both the existence of a direct relationship between Environmental Innovation and Firm Performance and the existence of an indirect relationship between the two, which highlights the mediating role of the kind of competitive advantage generated. It also provides an innovative approach, as it explains the Environmental Innovation from the literature on Social Innovation, considering Environmental Innovation as an expression of Social Innovation through the incorporation of ethical arguments to products, processes and organizational modes of the company. The main contributions of this work can be summarized as follows: (1) It explains the nature of Environmental Innovation through the Social Innovation literature, which allows consideration of some key aspects of administrative and technological innovations that have not been taken into account the academic literature. (2) The different types of environmental innovations are analyzed as a necessary step to understand the strategic options in the environmental field. (3) Environmental Innovation is related to business performance. The practical implications of the relationship between environmental innovation and performance are of great importance, since it directly influence the type of environmental strategy chosen, allowing the company to choose from innovative strategies (based on pollution prevention) or more conservative strategies (emissions control).

Diffusion and Adoption of Innovations for Sustainability

The primary focus of this chapter is on the theory and concepts of sustainability and why they are important to innovation and vice-versa. Key reductionist approaches to assessing sustainability such life cycle assessment (LCA), life cycle cost analysis (LCCA), and sustainability indicators are discussed in detail and applied to an engineering infrastructure scenario. The integrated sustainability methods of life cycle assessment and life cycle cost analysis enable a business to assess alternative products or processes at the planning and design stages. They may also be used during the production stages to assess whether a business needs to use a different raw material to make their products. The role of management, social network analysis, and mental models of individuals in the diffusion and adoption of innovations are also explored.

The Roles of Cognitive Machines in Customer-Centric Organizations

This chapter proposes innovative features of future industrial organizations in order to provide them with the capabilities to manage high levels of environmental complexity in the 21st century. For such a purpose the author introduces the concept of Computational Organization Management Networks (COMN), which represents new organizations whose principles of operation are based on the concepts of Hierarchic Cognitive Systems (HCS) along with those of Telecommunications Management Networks (TMN). Structured with functional layers and cognitive roles that range from technical and managerial to institutional levels of analysis, and also equipped with operational, managerial and strategic processes, the concept of Computational Organization Management Networks (COMN) plays an important part in the developments of future organizations where cognitive machines and Cognitive Information Systems (CIS) are prominent actors of governance, automation and control of the whole enterprise. It is in such a context that the new organization COMN will provide customers and the whole environment with innovations such as immersiveness for the production of services and goods that are most customer-centric.