Safe Nests in Global Nets - Innovation and IP
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Transcript of Safe Nests in Global Nets - Innovation and IP
Alberto Di Minin
Istituto di ManagementScuola Superiore Sant’Anna
& BRIE (Berkeley Roundtable on the International Economy)U.C. Berkeley
Content of this presentation is published as: Di Minin, A., & Bianchi, M. 2011. Safe Nests in Global Nets: Internalization and
Appropriability of R&D in Wireless Telecom. Journal of International Business Studies, 42(7): 910-934.
http://dx.doi.org/10.1057/jibs.2011.16
Innovation and IP Management
Safe Nests in Global NetsHow do multinationals invest in R&D
The relevance of IP Management for Open Innovation
• Open Innovation is connected to the concept of Appropriability
• Opening without a clear IP strategy is dangerous• What do we know about IP Management?• Investigating large companies
IP Management is not easy
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50%
1750 1800 1850 1900 1950 2000
Asia (China, India, Japan)
N. America (Canada & US)
Europe(8 countries)
Source: Bairoch 1982 (updates: ETLA).
Share of Global Manufacturing Output
Changing division of labour in manufacturing…will R&D follow?
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“We expect to see greater internationalization
of large firms’ technological activities in the future…”
Patel, P & Pavitt, P. 1991. ibid.
…this research project started from here
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Empirical analysis:
Research Question
Can we find evidence of “Non Globalization”?
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Three drivers of R&D globalization (…based on
extant research)Demand factors
• Adapting R&D, products and processes to local demand
• Providing technological support to off-shored mfg. plants
Supply factors
• Monitoring scientific and technological developments
• Obtaining access to scientists, engineers and designers
• Generating entirely new products and core technologies
‘Intermediating factors’
• Facilitating the efficient coupling of demand and supply factors
• Aligning activities with local cultures and norms
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Wireless Telecom as an interesting case: all signs of
globalization…Demand factors • Deregulation and break-up of national monopolies,
new regional markets with local players demand and tastes
Supply factors • Technological convergence, emerging/new ‘centers
of excellence’ (Eastern Europe, China, India etc.), supply of both high skilled and low cost engineers
Intermediating factors…?• Interoperability and modularization, integration of
technologies developed worldwide…
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…but also an interesting area for Collaboration and Open Innovation
practices!• Standardization of wireless communication• ETSI system of notification of patents as an analytical lens to single out
‘more significant’ inventive activity• The 4 largest assignees of ETSI “essential” patents:
– Ericsson, Qualcomm, Motorola, Nokia: 64% of all essential patents
USPTO (US) Patents Assigned to the 4 Companies*
Int. Prot.Patents inthe same
technologyclasses
CONTROLGROUP (CG):4,358 USPTO
PATENTS
EssentialPatents
SAMPLE (ES):
537 USPTO PATENTS
* For US companiessolely US patent familiesexcluded from analysis
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Types of ETSI Standards mainly covered by the
empirical analysis
GSM
GSM/AMR-NB
UMTS
3GPP/AMR-WB
TETRA
V5 Interface
DECT
DVB
1980 1990 2000
GPRS
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Distribution of patents across the 4 companies
Total Patents(assigned
between 1985-2005)
Ericsson Nokia Motorola Qualcomm
Essential Patents
537 241 72 85 139
Control Group Patents
4 358 1 752 1 012 1 160 434
2Years Fwd Citations / Patents
4.02 (ES) 3.31 (ES) 3.36 (ES) 3.01 (ES) 6.21 (ES)
2.31 (CG) 2.12 (CG) 2.15 (CG) 2.47 (CG) 3.03 (CG)
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Location Analysis
• DO (Domestic) patents: all inventors located in H.Q. country
• CO (International Collaboration) patents: at least one inventor in H.Q. country and at least one inventor in foreign country
• FO (Foreign) patents: all inventors located in foreign countries
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FO-CO-DO distribution of patents
Essential Patents Control Group
DO64%
CO7%
FO29%CO
11%
DO78%
FO11%
Pearson Chi-Square for DO * Essential : 41.5 (.01 significant)Pearson Chi-Square for FO * Essential : 77.5 (.01 significant)
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Company level ERICSSONEssential Patents
DO63%
CO18%
FO19%
DO37%
CO9%
FO54%
CO8%
DO86%
FO6%
CO7%
FO21%
DO72%
NOKIAEssential Patents
Pearson Chi-Square for DO * Essential : 59.4 (.01 significant)
Pearson Chi-Square for DO *
Essential : 6.4 (.01 significant)
Control Group Patents
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CO7.1%
DO84.7%
FO8.2%
CO4.4%
DO87.7%
FO7.9%
DO95.7%
CO2.2%
FO2.2%
CO6.9%
DO89.9%
FO3.2%
CA88.7%
AZ0.7%
Other10.6%
CA87.6%
Other9.8%MA
2.4%
IL80.5%
MA2.3%FL
4.6%
OTH_US2.3%
TX10.3%
IL44.6%
CA3.1%
FL18.8%
NC0.1%
AZ10.5%
MA4.3%
OTH_US
5.7%
TX12.8%
MOTOROLAEssential Patents
QUALCOMMEssential Patents
P Chi-Square DO * Essential : N.S. (.01) P Chi-Square DO * Essential : 4.48 * P Chi-Square IL_st * Ess : 39.6
P Chi-Square CA_st * Ess : N.S.
Company level
Control Group Patents
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Multivariate AnalysisDependent variable: All inventors from the All inventors from the All inventors from the All inventors from the
headquarter country headquarter country headq. country/state headq. country/state
(a) (b) (c) (d)
W/o Ess. × Firm With Ess. × Firm W/o Ess. × Firm With Ess. × Firm
Coeff. Sig. Coeff. Sig. Coeff. Sig. Coeff. Sig.
An ETSI essential patent .132 *** .201 ***
An essential patent × Ericsson .173 *** .221 ***An essential patent × Qualcomm .063 .027An essential patent × Motorola -.066 .290 ***An essential patent × Nokia .126 ** .164 **
The patent assignee is Qualcomm .348 *** .354 *** .361 *** .386 ***The patent assignee is Motorola .356 *** .368 *** .002 -.004The patent assignee is Nokia .256 *** .262 *** .322 *** .326 ***
McFadden's pseudo R2 .204 .206 .127 .129Count R2 .761 .760 .681 .680
Note: Estimated with Stata 9.2 for Windows. The reported coefficients are marginal effects for discrete change of the dummy variable in question from 0 to 1. Control variables are: years dummy, technology classes, number of claims, See the appendix for th complete regression results.**=5% significance and ***=1%significance.Observations: 4,895.
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Findings• The Patel Pavitt paradox remains!
– In a very globalized industry we still see strongly homebound inventive activities once ‘R&D’ is dissected by economic/technological/strategic content
– Concentration in the headquarters
• Why is this happening?
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Why R&D non-globalization?- Insights from the company interviews
• Demand and supply factors highlighted for offshored (FO patents) inventive activity
• In-house R&D (DO patents) still remains important due to ‘intermediating factors’:– Accumulated ‘sticky’ knowledge at HQ,
organizational inertia– Maturation effect and steep learning curves in
R&D internationalization – Importance of centralized IP management in this
particular industry
Conclusions:Developing and Managing Islands of Appropriability
Maturationof R&D Subsidiary
Centers of Excellence Int.l R&D
Organization
DEVELOPMENT OFLOCAL EXPERTISE
PLUG INTOTHE GLOBAL NETWORK
AppropriableSafe Nests
LOCAL R&D AND IP MANAGEMENT
To be continued
Special issue on California Management Review
“IP Management: in search of new practices,strategies and business models”
Supported by the European Patent Office
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Grazie per l’attenzione
Di Minin, A., & Bianchi, M. 2011. Safe Nests in Global Nets: Internalization and Appropriability of R&D in
Wireless Telecom. Journal of International Business Studies, 42(7): 910-934.
www.diminin.it
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http://dx.doi.org/10.1057/jibs.2011.16