Technology creation in China by foreign companies: A CEIBS-SKEMA joint research program

Research Focus and Objective
China has implemented several programs and invested significant resources to foster the development of its national system of innovation. Leading universities have been supported to raise their academic level and their internationalization. Public research centers, under the aegis of the Chinese Academy of Science, have increased their involvement. Huge investments have been made in infrastructures including the creation of more than 80 science and technology parks (such as Zhangjiang in Shanghai or Zhongguancun in Beijing). A regulatory framework has been developed to ensure acceptable conditions regarding the protection of intellectual property rights. Some Chinese companies have started to put serious efforts in R&D. This encompasses diverse businesses with companies like Huawei, Suntech, Haier, Lenovo, Byd, Comac, and Hisense.
In parallel, many foreign companies have understood that China is becoming more than simply the factory of the world, but the laboratory of the world. For example, Roche, IBM, Microsoft, L’Oréal, and Schneider Electric have established major R&D laboratories in China. The drivers for foreign companies to implement R&D centers in China are well-known: cost advantage (even if it is decreasing), market size, access to local resources, search for socio-political legitimacy, as well as some competitive incentives.
In this fast-changing picture, foreign companies are willing to know more about the successful ways to manage technology creation in China. This is precisely the objective of this research project. How to connect foreign companies with Chinese companies? Here is our main question. By Chinese partners, we mean universities, public labs, science and technology parks infrastructures, sub-contractors, reservoir of talented people, as well as governments at different levels (central, provincial, municipalities, districts). This research is directed towards senior R&D managers and their Chinese partners.

Research Issues
Six issues are targeted for the study: 1) dealing with intellectual property rights, 2) assessing the value of each partner contributions, 3) defining the scope of R&D activities to be carried, 4) managing knowledge flows, 5) managing and retaining people, and 6) sharing decision power. We intent to study four different modes of implementation: 1) the Chinese unit does most of its own; 2) the Chinese unit depends on the technology provided by the headquarters, 3) the extensive use of the Chinese partner, and finally 4) a balance of the previous modes. The careful examination of the six previously mentioned managerial issues should help to differentiate under which circumstances (maturity of technology, time constraints, etc.) each of these four moves would be preferred.

Research Scope
Leading multinational companies that are headquartered out China.

Link to Other Research
This research project is a joint-venture between China Europe International Business School (CEIBS) and SKEMA Business School (France). It is hosted by the CEIBS – Centre on Innovation in China (www.ceibs.edu/cci), directed by Professor George Yip and Professor Bruce McKern. Professor Dominique Jolly has been sent by SKEMA Business School to Shanghai to run the research during the academic year 2012-13.
This study is part of a stream of research conducted by the Centre on China Innovation at China Europe International Business School. Other studies include: Investigating the Most Innovative Chinese Companies, Opportunities and Barriers to Innovation for Multinational Companies in China, and Performance of R&D Centers in China.

What is Involved for Participating Companies
We ask that participating companies provide for one-hour interviews with at least two senior executives involved in the management of R&D activities in China.

Benefits to Participating Companies

We intend to get a detailed view of several multinationals with R&D activities in China. Each participating company will obtain a benchmark comparison with all companies in the study. Companies will have the opportunity to interact with researchers who have built up a substantial cross-company base of knowledge about R&D activities on a China basis.

Confidentiality

1. The intention of the study is to publish generalized findings from the research.
2. The reporting of practices and processes that are identified with individual companies will be cleared with the companies in advance.
3. The researchers will not disclose any participating company technical or product information that is not already in the public domain.
4. Participating companies recognize that the purpose of the Centre is to develop and publish knowledge about best practices in the management of innovation, particularly innovation in China. Therefore, sponsoring companies will not unreasonably forbid the publishing of best practices and processes about the management of innovation.

About the Researchers

George Yip is Professor of Management and Co-Director of the Centre on China Innovation at China Europe International Business School, which is the top business school in mainland China. He is based in London, Shanghai, and Maine, U.S.A. He is Co-Executive Editor of Chinese Management Insights. He is one of the world’s leading authorities on global strategy and marketing, managing global customers, and internationalization. From 2008 to 2011, he was Dean of Rotterdam School of Management, Erasmus University, a top six European business school with over 7,500 students. Before joining RSM, Yip was Vice President and Director of Research & Innovation at Capgemini Consulting. During this time he was on leave of absence as Professor of Strategic and International Management at London Business School. He was previously the Chair of Marketing and Strategy at Cambridge University, and has also held faculty positions at Harvard Business School and UCLA. His other full-time business experience includes product management with Unilever; account management with Lintas, one of the world’s largest advertising agencies; and senior manager of Price Waterhouse’s strategic management consulting services in the Eastern United States.
His latest book is Managing Global Customers (Oxford University Press, 2007). An earlier book, Total Global Strategy: Managing for Worldwide Competitive Advantage (Prentice Hall, 1992; 1995) was selected as one of the 30 best business books of 1992; has been published in ten languages; and a 3rd edition in 2012. He holds B.A. and M.A. degrees in economics from Cambridge University; and MBAs from Cranfield School of Management and Harvard Business School, and a doctorate from Harvard. A native of Asia, he is a dual citizen of the United Kingdom and of the United States.

Bruce McKern is Professor of International Business at the China Europe International Business School and Co-Director of the CEIBS Centre on China Innovation. His research and teaching interests are in the fields of international business, strategic management, and the globalisation of firms from rapidly developing economies. He concurrently holds appointments as a Visiting Fellow at Stanford University’s Hoover Institution and Director of the Research Program on Innovation in the University of Sydney, where he commissioned a number of published studies on the innovation ecologies of the US, Australia and China.
Prior to joining CEIBS, Dr. McKern was Director of the Stanford Sloan Master’s Program in the Stanford University Graduate School of Business and taught MBA core and elective courses in International Business. He was previously Professor of International Business and President of the Carnegie Bosch Institute at Carnegie Mellon University, an institute devoted to research and outreach in the field of international management.
He has been Dean of two Australian business schools and a Visiting Professor at INSEAD, IMD, other European and U.S. management schools and the Chinese Academy of Social Sciences. He has written numerous papers and case studies on international direct investment, MNEs, and the global minerals industry, and is the author or co-editor of eight books including Multinational Enterprise and Natural Resources, Limits to Prediction, Transnational Corporations in the Exploitation of Natural Resources and Managing the Global Network Corporation.
Dr. McKern holds a BE with Honours from the University of Sydney and a Doctorate in International Business from Harvard University. He is a member of the Editorial Board of Management International Review and a speaker and commentator on global business issues.

Professor Dominique R. JOLLY is a faculty member at SKEMA Business School (France) since 2001. He has been Associate Dean for International Development for the school. Before, he was Dean of the Faculty for the Sophia Campus after being Associate Dean for the “Entrepreneurship, Technology and Innovation” group. He teaches in undergraduate, postgraduate and post-experience programs. His core teaching relates to “Business Strategy”. He has also developed three other courses: “Management of Inter-firm Alliances”, “Technology and Innovation Management” and “Doing Business in China”. He is the author of several case studies and a computerized business game. He was previously Head of Research at Grenoble École de Management. He has taught as Visiting Professor in several countries including: the United Kingdom, Switzerland, Denmark, China, Mexico, Indonesia, Serbia, Czech Republic, Turkey, Iran, Moldova, Senegal and Mali.
In the field of strategy, his research has been carried on inter-firm alliances, including the management of Sino-foreign joint ventures. He has also written extensively about technology sourcing, technology assessment and competitive uses of technology in enterprises. He is area Editor for “Technovation”, and European Regional Editor for the “Journal of Technology Management in China”. He is a member of the Editorial Review Board for the “Asia Pacific Journal of Management”. He is a member of the executive council of the International Association for the Management of Technology (IAMOT).

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A propos dominiquejolly

Dominique R. Jolly (Jolly@Webster.ch) est Professeur de Stratégie d’Entreprise à Webster University, Campus de Genève (Suisse). Il est Directeur de la Walker School of Business and Technology.
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