The next years more companies will set-up R&D centers in the major regions of the world (e.g. Europe, North America, Asia). Objectives: benefitting from local ecosystems and talent bases and to aligning development activities to specific markets and cultures.
This expectation was presented at the World Conference of the International Association of Science Parks (IASP) in Luxembourg by René Buck, CEO BCI Global. His awarded paper and presentation were well received by the 100 science parks and areas of innovation from all over the world who attended the session on ‘Globalization or Regionalization’.
In production value chain more and more companies choose a region-for-region model in order to be less dependent on own production capacity or suppliers in China and Asia. Will we see this regional approach also in the global footprint of R&D centers? The answer is YES.
René Buck gives 5 reasons why we will see more regional R&D centers:
- input: companies want to take advantage of the capabilities of universities/research institutes and (diverse) talent from all over the world in order to accelerate R&D success.
- output: companies focus their own R&D effort more on development (instead of fundamental research) as that is closer to markets, customers and ... profits. ‘Development’ can be specific for certain markets, also taking regulatory market and cultural differences into account. Major markets like the US, Japan/Korea/Taiwan and the EU are interesting geographies from that perspective.
- effectiveness: having multiple R&D centers with talent from different backgrounds, sometimes internally competing for R&D budgets, increases the chances of innovation breakthroughs. There is also a maximum size to an R&D center in order to avoid inertia and diseconomies of scale.
- risks: geopolitical, intellectual property and regulatory risks are also drivers to regionalize the company’s R&D efforts for not having too many eggs in one basket.
- incentives: in order to reach a certain level of strategic autonomy governments are trying to have more R&D on their own soils: substantial parts of the recent Chips and Science Act and the Inflation Reduction Act in the US, the European Chips Act and the IPCEI programs (Important Projects of Common European Interest) in Europe and similar programs in for example China, India and Israel, are dedicated to R&D.
Science & Tech Parks
Science and Technology Parks, Tech Campuses and Areas of Innovation are interesting for these new R&D centers as they match the most important locations requirements of R&D centers:
- the availability of qualified personnel;
- the presence and co-operation possibilities with world class universities and research institutes;
- the proximity of lead users and/or strategic partners;
- quality of life in these science and innovation cities, including the landscaping, the attractiveness of the public space and the variety of amenities a lot of these innovation areas have to offer.
You can download the paper Globalization or Regionalization: a Corporate Perspective below
