This presentation is based on Safe nests in global nets: Internationalization and appropriability of R&D in wireless telecom

1. Interfirm Relationships and
Appropriability
Safe Nests in Global Nets
Alberto Di Minin
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.
(C) 2012 Alberto Di Minin - Universiteit Groningen Workshop Organizing Innovation
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within and between firms

2. We claim to be students of
innovation
APPROPRIABILITY
USER-LED
INNOVATION
(C) 2012 Alberto Di Minin - Universiteit Groningen Workshop Organizing
Innovation within and between firms

3. Removing a “safe” assumption
Appropriability
is evenly distributed
across the corporate network
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Innovation within and between firms

4. My Starting Point:
Patel and Pavitt
The case of R&D Non Globalization
“We expect to see greater
internationalization
of large firms‟ technological activities in the
future…”
Patel, P & Pavitt, P. 1991
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Innovation within and between firms

5. Research Question 20 years after
Can we find evidence of
“Non Globalization”?
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Innovation within and between firms

6. 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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Innovation within and between firms

7. …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*
SAMPLE (ES): CONTROL
537 USPTO GROUP (CG):
PATENTS 1420 USPTO
Int. Prot. PATENTS
Patents in
the same
technology
Essential
classes
Patents * For US companies
solely US patent families
excluded from analysis
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Innovation within and between firms

8. Types of ETSI Standards mainly
covered by the empirical analysis
DVB
V5 Interface
DECT
GSM GPRS UMTS
GSM/AMR-NB
3GPP/AMR-WB
TETRA
1980 1990 2000
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Innovation within and between firms

9. Distribution of Patents
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Innovation within and between firms

10. The main result
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Innovation within and between firms

11. Inferential Analysis
Patel & Pavitt
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Innovation within and between firms

12. Findings so far
• 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 of the
most strategic R&D
• Why is this happening?
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Innovation within and between firms

13. Why R&D does not decentralize so easily?
Insights from the company interviews
• Centres of Excellence argument
• In-house R&D (DO patents) still remains
important due to „intrafirm 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
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Innovation within and between firms

14. Islands of Appropriability
argument
“An academic paper gets published and cited not
only because of its scientific contribution, but also
because of its effective structure and
communication style. The same details are also
relevant when drafting a patent, and are typically
the responsibility of IP experts.
The closer you are with the people who end up
using and enforcing your patent, the more valuable
for the company this patent is likely to be.”
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Innovation within and between firms

15. Islands of Appropriability
Maturation
of R&D Subsidiary
DEVELOPMENT OF LOCAL R&D AND IP
LOCAL EXPERTISE MANAGEMENT
PLUG INTO
THE GLOBAL NETWORK
Centers of
Excellence Appropriable
Intrafirm
Knowledge Safe Nests
Relationships
Mgmt. IP Mgmt.
R&D Mgmt.
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Innovation within and between firms

16. So what do we seek to find in a
Safe Nest?
• R&D laboratories that offer a desirable setting for
a high level of exploitation of research results
• Premier locations for the development of the
more influential technologies
• The unequal distribution of appropriability across
a firm’s R&D network is at the base of the
formation and reinforcement of safe nests
• Appropriability peaks because the level of
coordination between inventors and IP managers
is the highest
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Innovation within and between firms

17. Expectations about Safe Nests
• This central role is likely to endure, and it
contributes to organizational inertia, shaping
interfirm relationship and path dependence for
technological development
1. they are the sites where focal research streams
were initiated (knowledge stickiness).
2. they have moved further along the R&D learning
curve with respect to R&D subsidiaries.
3. Location: not a monolithic concept. Yes the HQ,
but not necessarily
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Innovation within and between firms

18. Special issue on
Co-Edited Alberto + Dries
California Management Review
“IP Management: in search of new practices,
strategies and business models”
Supported by the European Patent Office
…To be
continued
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19. Seeking for more evidence of
Safe Nests
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Innovation within and between firms

20. 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.
alberto@sssup.it
www.diminin.it
DANK U WEL
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