Businesses that outsource research and development (R&D) overseas are more likely to innovate than those who outsource at home, says new research.
The use of home R&D suppliers can have a largely negative effect on product and process innovation suggests new findings by Professor Michael Mol, of Warwick Business School. Professor Mol’s study shows that a key factor in the decision-making process of outsourcing R&D is cognitive distance, which refers to the variance in knowledge and understanding between the outsourcing business and its supplier. Suppliers from the same country are less attractive for innovation purposes because their knowledge is often too similar.
Paul Arkwright
Publisher
