DYNAMIC OF TECHNOLOGICAL CAPABILITY ACCUMULATION AND INNOVATION IN SUBSIDIARIES OF TRANSNATIONAL CORPORATIONS (TNCS): THE TRAJECTORY OF MOTOROLA BRAZIL

Abstract

Although there have been several studies on firm-level technological capabilities both in the context of industrialized and emerging economies, there still is a scarcity of studies that examine the dynamics (speed) of the process of technological capability building, especially in the context of subsidiaries of TNCs in the context of emerging economies. Consequently, knowledge about this phenomenon tends to be shallow and scarce. The study underlying this paper seeks to contribute to furthering the understanding of the process of capability accumulation, especially for innovation, within subsidiaries of ETNs. Drawing on first-hand empirical evidence gathered through extensive fieldwork, this study underlying this paper examines the direction and speed of technological capability accumulation within Motorola Brazil during the 1996-2006 period. The study found that, over this ten-year period, this case-study company moved through levels of innovative capability building up to the level near the international innovation frontier, especially for functions such as „project management? and „processes and software engineering?. Thus, a dynamic perspective on firm-level technological development based on comprehensive measurements lined up with the context of emerging economies, captures the reality and the nuances of the innovation process in firms of specific industrial sectors. Specifically, the results here are in line with previous studies that have found a pro-active and innovative technological behavior in TNC-subsidiaries in emerging economies. Such type of evidence is important to illuminate innovation strategies at the level of firms, governments and investment banks.