The Research On The Strategic Upgrade Of MNCS’ R&D Intitutions In China

In knowledge economy, innovation is the source of competitiveadvantage for enterprises. MNCs (Multi-national Corporation) are attractedby China due to the huge market resources and human resources in China. Inorder to integrate the global R&D resources, develop their own global R&Dnetwork continually. More and more MNCs set up their R&D institutions inChina. After twenty years development, these R&D institutions in China facewith the dramatic changes in the external environments, and need strategicplan for the future. The implementation of their strategic upgrade would behelpful for the R&D institutions to realize sustainable development, and forthe MNCs to optimize their innovation resource allocation and strategicplanning in the global scale, and for Chinese enterprises to developtechnology, and for China to promote economic development.The R&D institutions in China, in fact, are the joint between the MNCsglobal R&D network and the host country/regional innovation system. Thethesis defines upgrade as that "the R&D institutions in China upgrade both inthe MNCs global R&D network and the host country/regional innovationsystem, and try to analyze the upgrade motivation, mode and method ofMNCs’ R&D institutions in China. The thesis measures the upgrade from thetwo aspects of Current Status and Growth Potential. According to theappraise scores, Current Status and Growth Potential could be divided intohigh and low respectively. Thus, the R&D institutions in China can be furtherdivided into four types, namely Low Status and Low Potential (I), Low Statusbut High Potential (II), High Status but Low Potential (III), High Status andHigh Potential (IV). If type I R&D institutions in China want to upgrade to type IV, there are two modes for them to select: Linear or Curve upgrademode. Linear mode refers to enhance the current status and growth potentialsimultaneously. Curve mode refers to enhance current status first, thenimprove growth potential, or improve growth potential first, and thenenhance current status. In order to realize upgrade, there are two methods.One is to improve current status, and the other is to enhance growthpotentials.Based on the analysis framework of the strategic upgrade of R&Dinstitutions in China, the thesis takes Ericsson R&D institutions in China asthe case study object. The communications equipment industry istechnology-intensive; the giant enterprises compete fiercely in the globalmarkets. Ericsson is the world leader in this industry, with the most patentportfolio in this field. Base on the brief review of the development ofEricsson’s R&D institutions in China, the thesis first used the five-forcemodel and SWOT matrix to analyze the object’s Current Status. Then, thethesis evaluated the Current Status and Grown potential, and found that bothin the ERICSSON’s global R&D network and the host country/regionalinnovation system in China, the study object belong to the quadrant III ofupgrade matrix. Obviously, the upgrade should be directed towards quadrantIV. Finally, the thesis points out that the main upgrade implementation is toimprove current status in the inner and outer R&D networks, supplementedby the measure to enhance growth potentials.