Mitigating NPD And R&D Risks Via A Portfolio Effect In Country Choice

Abstract

New Product Development as well as Research and Development projects tend to be inherently risky investments.  Most MNC’s today have great latitude in choosing site and country locations to build or contract Research or Development projects.  MNC R&D risks, corporate wide, can be moderated via a diversification of NPD/R&D projects across multiple cultures and countries.  In fact there is some evidence that R&D global diversification can generate synergies.  (Fast track projects that work around the clock via work being done in three locations each 8 hours off from the other.) Foreign R&D facilities can help serve as outposts to facilitate the entrance into strategic foreign markets. This paper attempts to develop decision methodologies for allocating NPD/R&D globally with the goal of both reducing risks and increasing global competitiveness.