Multinational corporations and regional innovation politics

Marianne Berge at the School of Business and Law  has submitted her thesis entitled “Taming the beast? The role of multinational corporations in small regions developing innovation policy based on unique competence of soft skills: The case of the Agder region in Norway”, and will defend the thesis for the PhD-degree Tuesday 10 December 2019.

She has followed the PhD programme at the School of Business and Law. Funding for the doctoral studies has been the VRI Agder project (in Norwegian only), a part of the National programme for regional R&D and innovation by the Research Council of Norway.

Summary of the thesis by Marianne Berge:

Multinational corporations and regional innovation politics

The thesis - “Taming the beast? The role of multinational corporations in small regions developing innovation policy based on unique competence of soft skills: The case of the Agder region in Norway” - discusses the dichotomy of a region wanting to attract Multinational corporations (MNCs) versus the vulnerability of having MNCs in the region.

Local knowledge vs multinational distribution

While the regional innovation system approach, which sees local knowledge as an essential resource for the local economy and encourage this knowledge formation among local businesses, thus emphasise engaging in local cooperation and networking activities, MNCs often prefer to maximise their corporate joint ventures, which entails transferring knowledge throughout their different locations and value chains.

This implies that the interest of regional government on the one hand and of MNCs on the other, may differ.

Regional understanding of MNC-strategies are important

Based on a  case study of the VRI-Agder programme in Norway, this thesis therefore addresses the theme: How can regional innovation policy help strengthening regional competencies and clusters by developing soft skills among regionally embedded companies, while at the same time attracting MNCs and utilising their knowledge flows without becoming too vulnerable to disruptive strategy changes made by MNCs in response to global market changes?

Thus, this thesis examines the relationship between regional initiatives aimed at regionally embedded industries and MNCs’ innovation strategies, seeking to bring together the corporate strategic perspective and the regional policy perspective.

The case study presented in this thesis confirm that businesses’ ability to innovate depends on a variety of social factors and not on R&D activities alone. Businesses located in the Agder region are largely dependent on practice-based, tacit knowledge and disseminate that knowledge in informal contexts, which include recruiting human capital from as well as informally collaborating with other local businesses.

The thesis argues that more attention is needed on the interactions between knowledge-seeking MNCs and their local hosts. To this end, regional innovation policy must be built on insights into how MNCs operate, the implications of which this thesis tries to illuminate.