Globalisation and innovation

Question 1

Location of innovation in TNC’s

Answer 1

Trend is becoming for research and development to become globalised:
- Access to critical competencies/people
- Access to external knowledge - technology and suppliers and customers
- Cost / tax
- State support
It is becoming important to have research facilities not only to understand the market but to also understand the people

Question 2

Huawei example

Answer 2

• Huawei are a Chinese telecoms manufacturer
• They employ over 100,000 people, and 46% of these are in R&D
• They have research labs in USA, Germany, Sweden and Russia

Question 3

National models of innovation - Frugal innovation

Economist article, 2010

Answer 3

• Frugal innovation takes into account the needs and wants of the poorest consumers as a starting point and work backwards. They strip down products to their bare essentials
• Frugal products need to be tough and easy to use
• It involves rethinking the whole production processes and business model. Cost need to be squeezed so more customers can be reached, and thin margins accepted to gain volume

Question 4

General electric - frugal innovation

Economist article, 2010

Answer 4

Healthcare laboratory in Bangalore developed a handheld electrocardiogram (ECG) selling for $800 instead of $2,00.
They have reduced the cost of an ECG to just $1 per patient.
There are just four buttons on the device and the whole thing is small enough to fit in a back pack.

Question 5

Tata consulting services - frugal innovation

Economist article, 2010

Answer 5

Water filter device in Chennai. Gives a family an abundant supply of clean and bacteria free water for an initial investment of $24 and a recurring cost of $4 for a new filter every few months

Question 6

National systems of innovation 2 - Chinese pillar industries

Answer 6

China is making a move from a centrally planned economy, to a market economy. The government however still shapes the economy and the innovations that they wish to make work.
They direct companies and research at universities around this. There is an element of coordinated research and company support.
Previously the pillar industries were manufacturing, petrochemical, mechanical and electrical but the government is hoping that future generations see otherwise. The focus has shifted more technologically and China also hopes to make tourism a pillar industry by 2020.

Question 7

Varieties of capitalism

Answer 7

Capitalist countries are split between:

• Liberal market economies - such as the UK and US. They have a laissez faire approach to markets, with more money and less regulation
• Coordinated market economies - such as Japan and Germany. They are much more regulated and are given a greater sense of direction and guidance with regards to innovation

Question 8

A recent UK case: Graphene

Answer 8

Single molecule thick sheets of carbon, first developed at Manchester university in 2004.
There has been extensive research into what will be done with Graphene and what to make with it.
In 2011, the UK government announced a fund of £50m for graphene research. There are however concerns for research funds after Brexit, and worries that the UK will not be able to keep up with countries such as China in graphene development and advancements.