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Internationalisation of R&D and embeddedness: the case of Austria

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Abstract

Internationalisation of corporate R&D—driven mainly by multinational enterprises (MNEs)—has received increasing interest recently. As a small open economy, Austria faces special challenges with regard to this on-going process. The share of Austrian R&D financed from abroad is outstanding in international comparison. Indeed, a significant portion of R&D activities in Austria is defined by strategic decisions of international corporations, which are re-assessing their spatial division of labour continuously. In our paper, we analyse the characteristics of these foreign-owned corporations in Austria and demonstrate that they form the more ‘modern’ part of Austrian industry. At the same time, we show that these companies and R&D facilities are embedded in the Austrian national innovation system (NIS) to a large extent. This embeddedness is also explicitly and implicitly supported by the Austrian technology policy. We conclude that this high degree of embeddedness in the NIS may be crucial for the sustainability of foreign-owned R&D facilities.

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Notes

  1. Both GERD and BERD.

  2. According to Statistics Austria the amount of funding stemming from the European Union or other international sources is about EUR 31 mio. in 2002.

  3. This information is based upon the Austrian national R&D survey, conducted in 2002 (Messmann and Schiefer 2005). This survey covers the total R&D activities of the Austrian private business sector. Participation in this survey is obligatory by law.

  4. The Community Innovation Survey is undertaken regularly by the statistical offices of the member states of the European Union. It covers innovation activities and innovation behavioural patterns by private business in the manufacturing and the service sector.

  5. Checking the reliability of the two dimensions ‘integration’ and ‘embeddedness’, the internal consistency analysis for the dimension ‘integration’ captures items such as contact frequency with the headquarter, contact frequency with other foreign (i.e. being not established in Austria) R&D units, contact frequency with foreign marketing/sale units, contact frequency with foreign production units, importance of rotation programs and importance of internal development programs. As the analysis shows the Cronbach’s alpha for ‘integration’ is on a level with 0.765. Checking the reliability for the dimension ‘embeddedness’, the internal consistency analysis captures items such as contact frequency with Austrian customers, contact frequency with foreign customers, contact frequency with Austrian suppliers, contact frequency with foreign suppliers, contact frequency with Austrian competitors and contact frequency with foreign competitors. As the analysis shows the Cronbach’s alpha for ‘embeddedness’ is on a level with 0.725. Thus, the 0.70 limit set for this study is easily reached.

  6. The website of FGG (www.ffg.co.at) gives a comprehensive overview of the programme as well as updates concerning the most recent developments and changes of the funding system.

  7. ‘Traditional’ types of interventions (i.e. subsidizing of applied R&D or indirect measures such as tax deductions for private business R&D) are in the centre of technology policy in Austria. Of course, foreign-owned companies are eligible to these instruments as well. However, we do not cover these types of interventions here and focus only on specific instruments which are especially geared to enhance implicitly or explicitly the attractiveness of Austria for foreign R&D.

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Acknowledgements

The participants of the PRIME workshop on ‘Globalisation of R&D—The policy dimension’ held in Vienna, May 2005 provided a stimulating environment for presenting an earlier version of this paper. The authors would like to thank Jakob Edler for his fruitful comments and helpful advice in completing this paper.

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  1. Institute of Technology and Regional Policy, Joanneum Research Ltd, Haus der Forschung, Sensengasse 1, Vienna, 1090, Austria

    Helmut Gassler & Brigitte Nones

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  1. Helmut Gassler
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  2. Brigitte Nones
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Correspondence to Helmut Gassler.

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Gassler, H., Nones, B. Internationalisation of R&D and embeddedness: the case of Austria. J Technol Transfer 33, 407–421 (2008). https://doi.org/10.1007/s10961-007-9048-9

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