Safe Nests in Global Nets: Internalization and Appropriability of R&D in Wireless Telecom

This paper documents the case of the wireless telecom industry to bring new empirical evidence to the debate on the internationalization of research and development (R&D) activities. US patent statistics on the four industry leaders – Ericsson, Motorola, Nokia and Qualcomm – illustrate the growing trend of the internationalization of R&D over the 1990s, yet we show that the most critical R&D projects related to the development of wireless standards remain homebound. The paper then leverages qualitative data collected through interviews with informed managers to provide a fresh interpretation for the homeboundedness of critical industrial R&D: the stickiness of core R&D projects to domestic locations is related not only to organizational inertia and the unripe maturation of subsidiaries, as suggested by prior literature, but particularly to the headquarters centralization of intellectual property (IP) management, which offers a high level of appropriability of R&D results. The unequal distribution of appropriability across corporate R&D networks is at the base of the formation of safe nests, domestic R&D centers that are sheltered from the forces of globalization because they offer a desirable setting for the exploitation of technologies deriving from a stronger coordination of inventive activities with the management of IP