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R&D (Re)location and Offshore Outsourcing: A Management Perspective


  • The authors thank Juha Oksanen, Amelia Santos-Paulino, Mike Wright and two anonymous reviewers for helpful comments on previous versions of this paper. The financial support of Tekes, the Finnish Technology Agency (Grant number 40254/06), is also gratefully acknowledged. The opinions expressed in this article are those of the author and do not necessarily reflect the official views of the Organisation for Economic Co-operation and Development (OECD) or of the governments of its member countries. The usual caveats apply.



The paper reviews and systematizes the management literature directly and indirectly related to (re)location of research and development (R&D), in the form of both insourcing and outsourcing. The focus in particular is on R&D offshore outsourcing and its main drivers, including locational constraints and opportunities, motives, strategic decisions and managerial challenges. The analysis synthesizes and links the main propositions and findings of the theoretical and empirical work to build an original management and strategy centred framework which looks at R&D (re)location from a client–vendor perspective. In this case, the client is the offshoring company, and the vendors are the firms located in the host country. The characteristics of the firms and locations considered vis-à-vis the offshoring firm's goals are examined, the strategies implemented, the management and organizational challenges that R&D offshore outsourcing entails, and the ways in which offshoring impacts on both home and host locations are investigated.