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Yasuyuki Motoyama - Global Companies, Local Innovations: Why the Engineering Aspects of Innovation Making Require Co-location

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Investigating the innovation activities of multinational corporations, this book uncovers and examines why the geography of innovation by multinationals is overwhelmingly local, in spite of their global operations in manufacturing and sales through case studies of produce development by three global players: Toyota, Sony, and Canon. The microdynamic approach of the book allows an in-depth investigation of the engineering and technical aspects of innovation making. The book unfolds the complex and constant process of trial and error in innovation and reveals three fundamental natures of innovation making: complexity, interdisciplinarity, and prototyping and testing. In order to manage these three natures of innovation, firms have to plan, ironically, for unplanned situations and to collocate knowledge, people, and resources.

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GLOBAL COMPANIES, LOCAL INNOVATIONS

Global Companies, Local Innovations

Why The Engineering Aspects of Innovation Making Require Co-location

YASUYUKI MOTOYAMA
Kauffman Foundation, USA

ASHGATE

Yasuyuki Motoyama 2012

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher.

Yasuyuki Motoyama has asserted his right under the Copyright, Designs and Patents Act, 1988, to be identified as the author of this work.

Published by

Ashgate publishing Limited

Wey Court East

Union Road

Farnham

Surrey, GU9 7PT

England

Ashgate Publishing Company

Suite 420

101 Cherry Street

Burlington

VT 05401-4405

USA

www.ashgate.com

British Library Cataloguing in Publication Data

Motoyama, Yasuyuki.

Global companies, local innovations : why the engineering aspects of innovation making

require co-location. (Ashgate economic geography series)

1. International business enterprises-Location. 2. Industrial location-Effect of labor

market on. 3. Product design. 4. New products-International cooperation. 5. Toyota

Jidosha Hanbai Kabushiki Kaisha. 6. Soni Kabushiki Kaisha. 7. Kyanon Kabushiki

Kaisha.

I. Title II. Series

338.8'81-dc23

Library of Congress Cataloging-in-Publication Data

Motoyama, Yasuyuki.

Global companies, local innovations : why the engineering aspects of innovation making require co-location / by Yasuyuki Motoyama.

p. cm. (Ashgate economic geography series)

Includes index.

ISBN 978-1-4094-2146-7 (hardback : alk. paper) ISBN 978-1-4094-2147-4 (ebook) 1.

International business enterprises. 2. Industries-Effect of technological innovations on.

3. Commercial geography. I. Title.

HD2756.M68 2012

338'.064-dc23

2012012007

ISBN 9781409421467 (hbk)

ISBN 9781409421474 (ebk-PDF)

ISBN 9781409483731 (ebk-ePUB)

Printed and bound in Great Britain by the MPG Books Group UK Contents List - photo 1

Printed and bound in Great Britain by the MPG Books Group, UK

Contents
List of Figures
List of Tables
List of Abbreviations

ADR

American Depository Receipt

AV

Audio Visual

CAD

Computer Aided Design

CAE

Computer Aided Engineering

CEO

Chief Executive Officer

COO

Chief Operating Officer

CPU

Central Processing Unit

DEC

Digital Equipment Corporation

DRAM

Dynamic Random Access Memory

ECU

Electric Control Unit

HDD

Hard Disc Drive

HP

Hewlett-Packard

IBM

International Business Machine

IPO

Initial Public Offering

LCD

Liquid Crystal Display

LSI

Large-Scale Integrator

MNC

Multinational Corporation

MPG

Miles per Gallon

OEM

Original Equipment Manufacturing

OS

Operation System

RE

Resident Engineer

RQ

Research Question

SE

Simultaneous Engineering

SEC

Securities and Exchange Commission

TFP

Total Factor Productivity

VAIO

Video Audio Integrated Operation

VVTi

Variable Valve Timing Organization

Acknowledgments

This book project could not have been completed without the help, encouragement, and cooperation I received from my teachers and friends. I am grateful for the circle of my advisers: Karen Chapple, Steve Cohen, David Dowall, Steven Vogel, and most invaluably, AnnaLee Saxenian.

I was privileged to meet a cluster of great scholars and friends at Berkeley, and am grateful for the relationship and friendship since then: Manuel Castells, Mike Teitz, Robert Cole, T.J. Pempel, Martin Kenney, Susan Helper, David Mowery, Peter Evans, and Youtien Hsing. Friends include Makiko Takekuro, Keiko Hjersman, Victor Polanco, Alberto DiMinin, Gary Fields, Lee Chung-Kai, Xiaohong Quan, Liang-Chih Chen, Wang Jenn-Hwan, Qing, Bradley Flamm, Neil Hrushowy, Pitch Pongsawat, Vikki Chanse, Kenji Kushida, and Yumiko Mikanagi.

Shuzo Katsumoto opened the door to my research by coordinating interviews with his company. I enjoyed the informal conversation with Eishi Endo that first hinted to me about the existence of an unglobalized dimension of R&D. Yukihisa Hayakawa and Jennifer Y. Ishiguro provided insights and coordination with their company. Aki Shoji was a brilliant professional who tested and supported my earlier ideas. I appreciate all interviewees for their cooperation despite their being so busy.

I am fortunate to have had an even greater circle of intellectuals after I left Berkeley. Michael Storpers seminar became an important asset to me. I appreciated comments about a chapter from David Rigby and suggestions about publication from Alan Scott and Ann Markusen. Beth Chapple and Toddie Downs patiently reviewed my manuscript. Katy Crossan and Lianne Sherlock always responded promptly and coordinated professionally. Matt Eisler, Mikael Johansson, Jennifer Rogers, and Gwen DArcangelis were wonderful post-doc colleagues. Rich Appelbaum, Barbara Harthorn, and Patrick McCray were excellent supervisors.

Lastly and most importantly, I have to thank my family. My parents supported me throughout the graduate school, as well as the post-doctoral period. My wife, Michelle Johnson, was always the first and last person that I could consult with my ideas. It was the intellectual dinner discussion I could have with her, the morning smile she gave me, and afternoon tea conversation we shared in our study room that inspired and improved this manuscript. Those intellectual and private times seem a distant memory, as we now have two little children, Kai and Elyse, but they give me the inspiration to write, to research, and to live. Thank you.

August 2012
Lawrence, Kansas
Y.M.

Preface

The research in this book started as a personal inquiry. I was a doctoral student at the University of California, Berkeley, and was eager to explore the grand concept of globalization. Given my interests in the high-tech sector and research and development (R&D) activities, I wanted to see where and how firms globalize their R&D operations.

Berkeley was a global laboratory for me. With its world renown, its strengths in engineering and the natural sciences, and its prime location in Silicon Valley, the university hosted engineers and managers from companies around the world. With my Japanese background, the doors were open to some of the most globally operating firms. I was fortunate to meet people from Sony, Hitachi, Olympus, and NTT, to name a few, and I started to ask questions. How does your firm globalize your R&D activities? What does your R&D center in Silicon Valley do? What products came out of the overseas R&D labs? How do you coordinate the process?

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