Gaining the benefits from global technology networks is critical today for all organizations but especially those of large multinational corporations. The process started in earnest in the late 1990s and early 2000’s. At that time efforts were rudimentary in international R&D organizations were put in place mostly to customize a corporations major product lines to the unique needs of local marketplaces and customs. From a large Corporation standpoint Joe Miller and Perry Norling of DuPont pointed out the most important drivers for globalization from their standpoint were (1) possible limitations in the supply and quality of technical talent in our own country and in certain technical fields,(2) the extent of the need to supply new technology to our manufacturing facilities abroad, (3) the extent to which customer needs greatly differed in the home versus abroad markets, and (4) the extent to which sciences and technologies being developed abroad are not accessible operating from afar. Typical key lessons learned at this time were:
1. Huge tasks require effective use in the coordination of external resources..
2. Using worldwide resources saves time, company human resources, dollars, lab space and equipment.
3. It is not uncommon to obtain a 5 to 10x multiplier on each company R&D dollar. Others have the talent, available equipment, and are ready to work, so they can do more efficient and effective work at a lower cost.
4. As leverage goes up, control of proprietary information goes down. This has to be managed in risks recognized.
5. Partnering with worldwide customers who have complementary expertise can be most rewarding.
6. During international networking one often gains access to surprising technological expertise.
7. Leveraging resources can foster industrial teamwork to solve worldwide problems.
8. Significant excitement can be generated in universities and government laboratories work is being done a truly significant problem with international impact.
The rapid pace of technological development and the globalization of almost all industries are major forces compelling all companies to devise new ways to innovate better, faster and more efficiently. In response, most companies have developed a global R&D network that significantly expands the research and development capabilities. The network often encompasses internal R&D labs in tier 1 and BRIC countries, as well as collaborative labs focused on strategic areas of research at leading universities throughout the world, private laboratories co-owned with noncompeting companies, joint ventures with alliance partners, co-developed work with suppliers and strategic partners, participation in industry-government cooperative programs, and involvement in precompetitive research consortium with other companies are all viable means by which corporations are leveraging their R&D efforts. Having offices in various locations around the globe, which service listening posts to identify local centers of expertise and collaboration opportunities, have enabled access to key technology resources and scientific expertise centered in various regions of the world. These evolving drivers argue for use of international R&D resources.
A common problem that globalized R&D centers can address has to do primarily with regulatory affairs, standards bodies, and customer preferences. The significant cultural and societal differences clearly manifest themselves in the diversity of country regulatory schemes. A global R&D organization can organize work processes to create efficiencies to produce products that can be marketed around the world while accommodating these diverse regulatory requirements. This has been especially true in the food and automotive industries. As such product development teams include members from around the world that represent these perspectives, assuring that relevant design, specifications, and testing is done to ensure rapid global product introductions.
The initial hurdle to utilizing cross-regional teams had to do with communications and information technology limitations. Now the second decade of the 21st century these limitations have for all intents and purposes been lifted. Also as the education levels around the world rise, the opportunity to select project team members from the best of the best as possible. For companies operating in the value portion of the performance cost matrix the opportunity to conduct low-cost R&D by doing the work in low-cost, high capability countries such as India is presented leading companies in many industries unique opportunity.
The continuing hurdle to utilizing cross-regional teams has to do with intellectual property rights. Inventor rules, inventor compensation, and definition of protectable subject matter vary across regions. These issues will be addressed in the intellectual property chapter of this book.