What goes around, comes around | Main | The challenge from Dalian, China

The globalization of innovation

[Excerpt from The World Is Flat , Chapter 1, "While I Was Sleeping," p. 29 ff.]

Every new product -- from software to widgets -- goes through a cycle that begins with basic research, then applied research, then incubation, then development, then testing, then manufacturing, then deployment, then support, then continuation engineering in order to add improvements. Each of these phases is specialized and unique, and neither India nor China nor Russia has a critical mass of talent that can handle the whole product cycle for a big American multinational. But these countries are steadily developing their research and development capabilities to handle more and more of these phases. As that continues, we really will see the beginning of what Satyam Cherukuri, of Sarnoff, an American research and development firm, has called "the globalization of innovation" and an end to the old model of a single American or European multinational handling all the elements of the development product cycle from its own resources. More and more American and European companies are outsourcing significant research and development tasks to India, Russia, and China.

Posted by Martha Rudolph at March 2, 2006 04:49 PM