Probably. There is no clear cut evidence, yet. I/We initially thought that this is not the case. There are “crowding out” effects, i.e. multinationals would put domestic innovative entrepreneurs at a competitive disadvantage (and out of the market). But no. In the Netherlands multinationals are apparently more innovative not just in terms of imitations (stuff developed elsewhere and transferred to the Netherlands), but also in terms of “real” innovations, goodies developed right here. But they need the link to the parent company to get the knowledge they need (see attachment Sadowski_Co_RP2006.pdf)… How about Dutch multinationals like Philips and DSM? How do they create their innovations, what kind of links to domestic firms/universities do they have/need? Maybe they increasingly need knowledge developed somewhere else because they cannot source it locally???
Staggering CNN news today: “On top of a stagnant stock and a host of new competition, the software giant (Microsoft) is said to be struggling to attract the best young talent.” (see http://money.cnn.com/2006/03/13/technology/
microsoft_employees/index.htm?section=money_latest). But where do these kids go??? To new start-ups and high growth companies (like Google) the article suggests. However, there are some programmer teams that are growing and growing and growing. Like the Debian Open Source Software community. How can that happen that people work and contribute to a “community’ without getting paid?
Eciswp131.pdf
An extensive literature has covered the issue how firms have to respond to changes market, in which Porter (1985, 1990) has probably been the most cited reference. Still a point of reference is in Porter’s Book “Competitive Strategy”, Annex B How to Conduct an Industry Analysis (1985). The shift in scientific paradigms came with Hamel and Prahalad’s Article in the Harvard Business Review (1996) “Competing for the Future”. Here they proposed that strategy analysis has to shift to examine not only the market but also the firm-internal capabilities and competencies. Jay Barney (2002) in his book “Gaining and Sustaining Competitive Advantage” proposed a synthesis of both streams of thought. However, even these authors have been short with respect to one interesting question which is: what are the sources of innovation and imitation in an industry which actually govern particular strategy choices of companies. And maybe even more interesting: what can we learn from other companies? There are different ways to examine industries and companies depending on the particular research question ask in the analysis. For the mobile telecommunication industry a good research question could be: how and why do need firms in the mobile telecommunication industry inter-firm linkages and what is the role of the government to foster the growth of these firms?(see attachment sadowski_sbe1.pdf)
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