ABSTRACT
As previously seen, it is widely accepted that the organisation of innovative activities can no longer be illustrated simply on the basis of concepts such as the dichotomy of market-hierarchies and the transaction costs mechanism being fundamental explanations of the internalisation/externalisation of capabilities, functions and assets. Indeed, it has been increasingly observed the emergence of the trend for MNCs to establish internal (intra-firm) and external (inter-firm) networks for innovation – network that are characterised by different levels of territorial and social embeddedness with reference to the location that hosts them. Furthermore, it has been shown that MNC affiliates abroad have assumed a predominant role in an increasing proportion of all the most advanced technologies. The interpretation given is twofold: on the one hand, the ceaseless relevance of local innovation processes as reservoirs of different technical expertise in the globalisation era, and, on the other, the outgrowth of an ‘organisational capital’ that allows the integration of several related technological competencies across geographically dispersed units (Zander, 1997).
