The organisational decomposition of the innovation process : what does it mean for the global distribution of innovation activities?

Abstract

The starting point for this paper is a fundamental change currently occurring in the way innovation is organised in the developed countries: it tended to be centralised at or near headquarters but is now much more decentralised within the company. Equally if not more significant, innovation activities that used to be carried out inhouse by innovating firms themselves are carried out by independent suppliers of knowledge intensive business services, or are transferred to key suppliers. The question driving this paper is how this ‘organisational decomposition of the innovation process’ changes the global distribution of innovation of activities. Does it contribute to their global dispersal to the developing world or does it strengthen the existing concentration? Since this is uncharted territory the paper seeks guidance from theory and lays out an agenda for empirical research. Keywords: innovation; outsourcing; global; knowledge; innovation system; global value chain.