Book Review: Multinational Enterprises, Innovative Strategies and Systems of Innovation

    By: PDMA Headquarters on Oct 02, 2013

    Book Review: Multinational Enterprises, Innovative Strategies and Systems of Innovation

    By: John Cantwell and José Molero. Cheltenham, UK: Edward Elgar Publishing Limited , 2003 . 323+xxiii pages. 
    Review by: Steven MacGregor

    The increasing globalization of industry and integration within sectors produces ever more powerful firms that, when initiating business activities around the world, have a profound effect on the individual countries' national systems of innovation. This collection of 10 chapters, edited by John Cantwell and José Molero, treats these dynamic themes with a focus on technology and the decentralization of research and development. A national system of innovation is “the network of institutions in the public and private sectors of each country that support the initiation, modification, and diffusion of new technologies” (p. 1).

    This is a richly crafted book, written by economists for economists. Senior decision makers in industry and policymakers charged with improving the competitive health of regions also will find the book useful. The high percentage of empirical data also will appeal to many academics—but only those interested in innovation at the macro level. Although this book rarely descends from the top-level economists' view of innovation, some in the new product development (NPD) field will find certain chapters of interest. With deep discussion of themes including technology and knowledge transfer, foreign direct investment (FDI), learning networks, absorptive capacity, and R&D organization it is valuable, arguably, for those in the NPD field to appreciate how their work and considerations at the micro level of innovation fit within the larger scale. With the increasing influence of NPD at the board-room level, it may also be valuable for those in the field to have a richer understanding of such considerations.

    The 10 chapters divide equally into two parts and are preceded by a brief introduction, which does not discuss the chapters directly but rather discusses the phenomena investigated. An epilogue, which discusses the downturn in the stock market during the early part of the twenty-first century. Part 1 is titled “New Trends in Multinational Enterprise (MNE) Technological Organisation: Centralisation versus Decentralisation,” and part 2 examines “The Interactions between MNEs and Systems of Innovation.” Each chapter contains many references to the economics field and a considerable amount of data. As such, those unfamiliar with the field may find many of the chapters difficult to read. However, proceeding directly to the data sets and concluding remarks will often yield the chapter's insights.

    The authors advance macrolevel innovation concepts through the use of specific cases and contexts, including frequent discussion of the main economic powers, with specific chapters on Germany, Spain, Hungary, and Portugal. They further this country-level understanding by frequent discussion of the global triad: Europe, the United States, and Japan. Yet there is practically no discussion on China, so it will be interesting to see how many of the book's conclusions change once the effects of Chinese growth and integration are better known. Many of the discussions present comparative data for technological sectors. In contrast, the chapter on automotive clusters in Portugal advances interesting ideas on learning networks, commenting on the need for component suppliers to evolve and stating that “it is no longer just a manufacturer; product design and development capabilities are needed” (p. 228), which acknowledges the benefit NPD can add to the overall innovation system. Sadly, such diversion from high-level economic considerations is rare.

    In summary, this book cannot be faulted for what it is: an economist's view of innovation and multinational business. It may provide only background reading for the majority of NPD academics and industrialists. However, strategic decision makers from an NPD background may find the book extremely valuable, particularly for international expansion considerations. Nonetheless, with no discussion on China and having been published before the European Union expansion, much of the book's content may, in time, merely represent a snapshot of history.

    Released: October 2, 2013, 10:54 am | Updated: October 30, 2013, 11:59 am
    Keywords: PDMA Blog


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