1. Why might the level of innovation vary across countries and regions?

What
factors would you examine when deciding where to locate an R&D center?
Discuss the advantages and disadvantages of organizing corporate R&D
into a network of globally distributed R&D centers.

The level of innovation varies across countries and regions because of different
factors that are associated with the innovative capacity of different geographical areas.
The population and the ability to control for population, historical technological
sophistication and developments, and commitment of human resources to R&D and
innovative activities are some of the reasons for the varying levels. Moreover, the nation’s
institutions such as the political and regulatory environment, the nation’s investment in
education, and the responses to the economic crisis in terms of regional policies have not
been the same among the different countries and regions.
Generally, an R&D center should be located in an emerging economy wherein
development and innovation is flourishing. Another factor to consider in looking for a
location is to know where there is a concentration of businesses that are active and there
is a similarity, connected, or specific industry focus which can also be referred to as
innovation hubs. An innovation hub includes universities, government research institutes
or labs, and corporate R&D centers. The purpose of the collocation is to create a dense
social network.
R&D builds competitive strengths and more of it if these corporate R&Ds are
organized into a network of globally distributed R&D centers. Government policies coming
from the European Union mandate ambitious environmental targets for R&D, such as
carbon-neutral fuels and energy, which are driving global R&D to achieve environmental
goals. However, there are also disadvantages in global R&D and one of these is
managing employees located in different countries. Moreover, assessing the value of a
new idea, encouraging collaboration across geographical locations and functions, and
managing the complexity of global R&D projects are some of the challenges also.