Disconnected research and development: The (temporary) spatial patterns of innovation

Scholars recently observe an increasing spatial disconnect between research and development (R&D) activities within global firms, in particular from emerging markets.

These firms off-shore their research activities to centers of state-of-the-art knowledge while they might keep product development closer to their original locations.

This is of major concern to our society because this spatial split channels global knowledge flows and affects the ability of regions to produce innovative output such as climate-friendly engines or vaccines against new viruses, and has further implications for the economic and social welfare of regions.

This project aims at understanding the dynamics of spatial (re-)organization of R&D in relation to firm development as well as economic shocks and social crises, such as the Wall Street Crash of 1929 or the current COVID-19 pandemic.

Because we still know too little about how stable this spatial disconnect is, based on initial evidence that it might only temporary exists, DISCO uses information from patents to build an indicator and a firm-typology revealing the global patterns of which type of R&D activity is performed at which locations.

The project provides a quantitative measure for the type of R&D activity that goes beyond the qualitative measures often used to study this phenomenon.

Applying these indicators to almost 200-years of historical patent data yields insights into the effect of economic shocks on the spatial organization of R&D.

Further, it reveals similarities and differences between the development of currently emerging firms and early activities of today’s global players.

This can yield new evidence on innovation capability building and successful development trajectories in R&D internationalization.

The findings provide a more profound understanding of the temporality of globally splitting R&D activities, with implications for firms and the regional development of emerging as well as established markets.