The Handbook of Global Science, Technology, and Innovation

Chapter 11 New Product Development in Emerging Economies: Innovation in Reverse from China

Simone Corsi, Alberto Di Minin, and Andrea Piccaluga

Introduction

The aim of this chapter is to present, discuss, and empirically show evidence of a new theoretical framework that highlights the significance of emerging countries as a source of innovation and hence influences the direction of strategic Research & Development (R&D) investment of multinational corporations (MNCs) based in advanced economies. The theoretical contribution of this chapter is to connect the theory of R&D maturation (Asakawa 2001; Almeida and Phene 2004) with the discussion on reverse innovation (Immelt, Govindarajan, and Trimble 2009; Govindarajan and Trimble 2012) and innovation from emerging economies (Hang, Chen, and Subramian 2010). We do so by shedding light on the host country factors that can affect foreign subsidiaries in China and that can trigger innovation globally.

We identify a new configuration of R&D evolution in emerging economies, which prioritizes the need to absorb and reinterpret innovation stimuli from the local market rather than the final aim simply being to tap into indigenous science and technology.

China gained the attention of foreign direct investment (FDI) in 1978 with Deng Xiaoping’s Open Door Policy. Since then, foreign MNCs have triggered internationalization in China involving a wide range of activities with increasing added value (OECD 2008). Foreign R&D-oriented FDI in ...