National Innovation Systems and the Outsourcing of Research

1. National Innovation Systems and the Outsourcing of Research Conference on Global R&D in China Nanjing, May 27-29, 2005 Richard P. Suttmeier University of Oregon petesutt@uoregon.edu

2. The “NIS” Concept • Innovation as systemic phenomenon • The relevance of institutional and cultural legacies • The “national” in “NIS” • NIS and the globalization of innovation • Contradictions?

3. “Outsourcing” • Markets, hierarchies, transaction costs, and the search for “complementary assets” • The changed calculus • The IT revolution • Challenges of innovation • “Global” diffusion of S&T capabilities • Rethinking the “boundary of the firm”

4. Outsourcing R&D and NIS • Companies and countries • The inevitable tensions between “source” and “target” • Enhancing NIS through techno-globalism ? • Managing tensions through domestic compensatory measures • Harmonization of international norms • “Win-win” outcomes?

5. The China Case • NIS characteristics • Capable research system • Weak industrial innovation tradition • Research – production gap • IPR, VC problems • Trajectory of Chinese NIS(?) • “Enterprise - centered” (model 1) • “Networked” (no center) (model 2)

6. Foreign R&D in China • Add value to NIS • Exploit under-utilized talent • Incubate talent • Capitalize innovation • Illustrate how to close the research – production gap • Demonstrate network management • Reinforce “model 2” • Promote harmonization of norms

7. Questions • Relative and absolute gains • Are national compensatory policies consistent with the network “imperatives” of outsourcing? • Foreign R&D and International Cooperation in S&T (ICST) • “Spillovers” • Effects on “self-organizing communities” • Business models and the “intellectual commons”