Global-Innovation Strategies of MNEs and European Integration: The Role of Regional R&D Facilities

It is now widely accepted that most leading MNEs compete through the implementation of a global strategy. However it may also be argued that, in many cases, the effective application of such a global approach requires the full and active recognition of the distinctive market needs and productive potentials of the world’s major regional markets. Thus the European operations of a globally-competing firm need to develop special characteristics, within the company’s basic technological and managerial background, that optimise its competitive potential in that market. It is one central argument of this chapter that in the context of the priorities of contemporary international competition MNEs are more likely to use their European operations to develop distinctive new products for the region’s markets than to merely adapt to local characteristics a well-established product that (with similar minor adaptations) is also marketed in other key areas. This follows from the likelihood that MNEs can perceive that not only do European markets have particular aspects that require a unique response, but that subsidiaries in several European countries can access quality scientific inputs that facilitate such effective development work.