Explaining inertia in R&D internationalisation : Norwegian firms and the role of home

Abstract: We ask why firms from certain countries show a higher propensity to centralise their R&D activities at home, and a consequent reluctance to undertake international R&D than firms from other countries, using the example of Norway. We highlight that it is the interplay between the industrial structure and political and economic orientation of the home economy that plays an important role in how firms engage in both home and overseas activities, including R&D. In general, national innovation systems and industrial and technological specialisation of countries changes only very gradually, and - especially in newer, rapidly evolving sectors - much more slowly than the technological needs of firms. Firms must seek either to import and acquire the technology they need from abroad, or venture abroad and seek to internalise aspects of other countries' innovation systems. In the case of Norway, two groups of firms exist. The first group are large firms in traditional sectors, that are highly embedded, and around whom the Norwegian innovation system has been built, and which have a low level of R&D internationalisation. The second group of firms are SMEs in science based sectors who are not able to meet their technological needs locally, and are expanding R&D abroad to seek competences in technologies not available domestically. The level of embeddedness of firms in the innovation systems of their home location acts as a powerful centripetal force, creating a systemic lock-in. This, can, as in the case of Norway, lead to an over-dependence on the domestic innovation systems