World Scientific Reference on Innovation

The following sections are included:

• Preface
• List of Contributors
• Contents

The following sections are included:

• Introduction to the Volume
• Structure of the Book

Although the majority of U.S. multinational R&D still was performed at home, there has been a steady increase in the amount of offshore R&D spending by the U.S. firms (millions $)1:

It is no news that manufacturing in the U.S. has become more attractive over the last few years. And, even though there is no massive torrent of renewed manufacturing activity moving the needle just yet, it is clear that the reshoring movement is increasingly getting attention. At the very least, the U.S. companies should think twice about where they will manufacture their products in the next few years. But how do you figure out whether to unequivocally jump on the reshoring bandwagon or, instead, sit this one out? There are a few tools and tests that can help you assess whether reshoring is the right solution for you. And if the answer is Yes, making sure your assumptions are realistic and you are factoring in all the moving pieces into your analysis, is critical to avoid any nasty surprises once you get to the nuts and bolts of reshoring.

This chapter explores the meaning of reshoring and its drivers in the case of the U.K. manufacturing, with a particular focus on its automotive sector. Using a mixed methods approach, drawing on interviews, policy reviews, and a range of recent surveys, the chapter finds that while reshoring is indeed a discernable trend in the U.K. manufacturing, it is less pronounced than many have claimed. In the U.K. case at least there are severe limits as to how far this reshoring trend can go, particularly in relation to the availability of skills and finance in the supply chain, and the availability of land for manufacturing. This is in turn raises questions over the stance of British industrial policy and whether more could be done, with comparisons made to recent U.S. experience.

Backshoring is a relevant phenomenon. Around 400–700 German companies are performing backshoring activities each year. In parallel to production relocations abroad, we observe a slight decline of backshoring frequency. Time-series analysis shows that every fourth to sixth offshoring activity is countered by a backshoring activity within 2–5 years. Backshoring seems to predominantly serve as short-term correction of prior location misjudgments. However, it is not likely that backshoring will be a major lever to restore industrial competitiveness in high-wage countries. The current intensity is too weak to lead to a re-industrialization of the home countries.

The following sections are included:

• Introduction
• Assertion 1: Reshoring is Fundamentally a Location Decision
• Assertion 2: A Firm Cannot Pursue Reshoring Unless it had Previously Pursued Offshoring or Offshore Outsourcing — this Path of Location Decisions has not been the Subject of Study
• Assertion 3: There is Reason to Believe that Both the Original Offshoring Decisions and the Subsequent Reshoring Decisions were/are Often Flawed
• Assertion 4: As Environmental Regulations Become More Synchronized and Standardized Across Global Supply Chains, the Pendulum Should Swing in Favor of Reshoring
• Assertion 5: In the Long Run, the Logic that is Leading Firms to Reshore May Cause a Loss of Jobs in the U.S. and Other Developed Nations
• Conclusions
• References

Vignette: Frank Li, a software engineer and trainer at IBM Chengdu in China, had to timeshift regularly. He was routinely scheduled for the second shift. Why? Because he was collaborating with the Americans who are 8–11 hours away, and supposedly everyone involved in this collaboration was using agile software development methodology, which requires synchronized work.

The following sections are included:

• Introduction
• Overview of IT Services
• The Domestic Sourcing Business Model
• The U.S. Public Policy Environment for IT Services and Domestic Sourcing
• Conclusion — Should Public Policy Target Domestic Sourcing?
• References

Educators, policy makers, and industry groups encourage students to pursue STEM degrees and workers to pursue STEM careers. The employment relationship is changing so that questions of education, social investment, job security, student debt, and risk need to be reconsidered.

A generation ago, the employment relationship recognized long-term reciprocal interests of employers and workers. In contemporary business philosophy, production is more modular and less integrated. Work is more commodity-like and investment decisions are more short-term. As a result, the employment relationship has weakened significantly. Consequences for production workers are profound, but similar effects apply to employees in STEM occupations. These effects change the way students and workers regard education, career choices, and lifelong learning.

Understanding the perspective of both workers and employers should help design effective public policies.

Our paper, “The Effect of Language Differences and National Culture on Operational Process Compliance” (Gray and Massimino, 2014), has its origins in a previous work (Gray et al., 2011) that considered a broad set of factors surrounding quality risk (driven by non-compliance) at offshore manufacturing plants. It limited its scope, however, to mainland U.S. and Puerto Rican manufacturing facilities. For our 2014 paper, featured here, we sought to expand geographical coverage to disentangle cultural elements from language differences. This also provided the opportunity to subject one of the key findings in Gray et al. (2011) — reduced levels of process compliance at offshore plants — to a global scale. As such, we could test the assertion that the Puerto Rico-specific results in fact related to general challenges in transferring organizational knowledge across a culture and language boundary. We found that the introduction of either cultural or language boundaries had negative implications for compliance performance when considered separately. However, when included together in a single model, the effects of a language difference dominated the effects of cultural differences. Unbeknownst to us at the time, our findings were consistent with another article published the same year in a different context (Shomaker and Zaheer, 2014), while our use of multiple distance measures also heeded the call of Ambos and Häkanson (2014)…

The following sections are included:

• Introduction
• Organization of Affiliate R&D
• Evidence on the Internationalization of Corporate R&D
• External Technology Sourcing by MNEs
• Policy Implications for Home Countries
• Conclusions
• References

The following sections are included:

• Introduction
• Literature Review and Hypotheses on Trends and Drivers of R&D Relocation
• Data and Methodology
• Relevance, Motives, and Target Countries of R&D Relocation Activities
• Determinants of R&D Relocation Activities
• Discussion and Conclusions
• References

The following sections are included:

• Introduction
• State of Art
• Research Methodology
• Case Analysis
• Discussion
• References

The following sections are included:

• Introduction
• Third Generation Globalization
• The S&T Human Resources Race
• The Nationality of Multinationals
• The Chimera of Techno-Hegemony
• Conclusions
• References

The following section is included:

• Index