The geography of innovation in multinational companies: internal distribution and external embeddedness

This chapter is concerned with the way multinational companies (MNCs) organize the internal and external geographical setup of their innovation projects. The core thesis of this chapter is that innovation is socially embedded, which is why the activities involved cannot take place anywhere. An empirical example shows that neither internal nor external geographical constellations are stable and uniform within the whole MNC. Instead, by differentiating between projects and functional arenas, the selective and dynamic aspects of the geographical setup of corporate innovation are being displayed. Indeed, MNCs have to deal with an inherent spatial tension: on the one hand, they are active in multiple countries and consequently disperse their activities; on the other hand, the need to control and coordinate makes concentrated settings attractive. This refers particularly to strategically important and complex tasks such as innovation projects. At the same time, corporate innovation does not occur independently of the external environment. For this external embeddedness spatial characteristics again play an important role. It is therefore worthwhile to look at innovation projects of MNCs combining their internal and external dimensions.