Central & Eastern Europe 6 - Globelics Academy

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5 Δεκ 2012 (πριν από 4 χρόνια και 6 μήνες)

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Rethinking FDI Promotion:

New EU Member States
on a bumpy road to Lisbon

PhD Project by


Sergey Filippov

UNU
-
MERIT (Maastricht, NL)

GLOBELICS Academy, Lisbon

Outline of the Presentation


Background


Conceptual idea


The new EU member states


Methodology


Conclusions



Research in Progress

MNCs are the major players in
innovation process

Rank

Company

Sector

R&D (


m),
2005

1

Ford Motor, USA

Automobiles & parts

6

781.92

2

Pfizer, USA

Pharmaceuticals

6

308.88

3

General Motors, USA

Automobiles & parts

5

679.86

4

DaimlerChrysler, Germany

Automobiles & parts

5

649.00

5

Microsoft, USA

Software

5

581.52

6

Toyota Motor, Japan

Automobiles & parts

5

423.93

7

Johnson & Johnson, USA

Pharmaceuticals

5

350.94

8

Siemens, Germany

Electrical comp. & equipment

5

155.00

9

Samsung Electronics, South Korea

Electronic equipment

4

612.61

10

GlaxoSmithKline, UK

Pharmaceuticals

4

564.13

Source: European Commission. 2007. Monitoring Industrial Research: The 2006 EU Industrial R&D Investment Scoreboard

MNC context


MNCs are evolving from hierarchical structures
towards network
-
based systems, where
subsidiaries have distinct strategic roles and
scope.


“Devolution of power” facilitates knowledge and
technology spillovers.


R&D internationalisation. Manufacturing units
gain R&D function. Establishment of stand
-
alone R&D labs.

Host Country Policy Context


FDI promotion tends to neglect foreign affiliates
already established in a host economy


Importance of innovation policy is generally
acknowledged, but it is still in infancy and,
moreover, foreign affiliates are not explicitly
targeted.

Multi
-
Level Policy & MNCs

National

Regional
(EU)

World

FDI Policy

Investment
incentives

State Aid
rules

WTO

Innovation
Policy

IPMs

Lisbon
Agenda

Corporate
Strategies

Affiliates

HQ level

Research Question



How foreign affiliates become innovative? What
are the determinants of the innovation dynamics
in foreign affiliates?



How can host country policy stimulate
innovation in affiliates (in general and in new
EU member states in particular)?

Objective



In order to enhance innovation process in the
host economy it is crucial to understand
characteristics and determinants of innovation
dynamics of foreign MNC affiliates


Innovativeness of foreign affiliates depends on:


position in MNC network


characteristics of host country innovation system


host country public policy

Focus of research

Affiliates of Multinational Companies

Source: UNCTAD 2005

New Member
States of the
European Union

New EU member states


Strong presence of MNCs (=FDI stock), especially in
medium high tech.

Characteristics of host country innovation system:


Legacy of socialist S&T

Host country public policy:


Impact of accession to the EU, two levels of policy
-
making


Birth of national innovation policy (+ Lisbon Agenda)


National investment promotion agencies (CzechInvest,
PAIZ, ITDH) target higher value added FDI


R&D
-
related FDI is a means to achieve Barcelona Target.

Share of foreign affiliates in BERD

3.4
3.4
14.1
19.0
19.1
22.1
23.7
24.7
45
45.3
46.6
72.1
62.5
0
10
20
30
40
50
60
70
80
IE
HU
CZ
SE
UK
NL
CN
DE
PL
SK
US
IN
JP
Sources: UNCTAD 2005



Western Europe



51 %


USA / Canada




22 %


Central & Eastern Europe

6 %


India





4 %


China





2 %


Other Asian countries


3 %

Foreign Investors’ Preferred Areas for R&D Activities



(Ernst & Young’s European Attractiveness Survey 2005)

Methodology


Qualitative analysis


Literature review + Conceptual part


Desk study: policy documents, searching explicit
links between FDI and Innovation (positive
approach)


Survey: a sample of foreign affiliates in several
sectors: life sciences, automotive, electronics


Case studies of selected companies


Designing a policy framework (normative
approach)

Expected Results


Academic contribution


Foreign affiliates in NIS


Transition economies on the way to knowledge
-
based economy



Policy side


A policy framework on coherency between
Innovation policy and FDI promotion

Research in Progress



Life Sciences in the Czech Republic


Pharmaceutical


Biotechnology

R&D intensity

R&D as %
sales

Capex

as %
sales

Dividends
as % sales

Operating
profit as %
sales

Pharmaceuticals and
Biotechnology

14.9

4.9

6.4

20.2

Software and Computer Services

10.4

3.9

2.3

19.6

Technology Hardware

8.2

5.6

1.2

8.4

Source: UK’s 2006 DTI R&D Scoreboard Volume 1


Importance of
R&D link to

Pharmaceuticals

Semiconductor
technology

Telecommunications
technology

Pre
-
clinical

Clinical
research

Process
techno
-
logy

Product
develop
-
ment

Hardware

Software

Lead market

Low

Very high

Low

Very high

Low

Very high

Science /
research system

Very high

High

High

Low

High

Low

Production

Low

Low

High

Low

High

Low

Source: Reger et al. (1999),

Mode of entry / Functions /Policies

Acquisition

Greenfield

Manufacturing

A

B

Manufacturing
+ R&D

C

D

R&D

E

F

Obrigado !