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7 GLOBALISATION AND INNOVATION : THE IMPLICATIONS OF THE IRISH MIRACLE

In this chapter we examine the implications of globalisation for innovation policy and corporate strategy. We draw on both the resource-based value (RBV) and competency-based perspectives on the economics of strategy to discuss research into networking, cluster development, and the role of transnational corporations (TNCs) in technology transfer and diffusion. Although researchers in this burgeoning field can loosely be categorised as falling into two opposing camps—those who are pessimistic and those who are optimistic about the magnitude of the net benefits that flow from TNCs to indigenous firms within host regions—we argue that representatives from each camp operate within a similar theoretical framework. Where they differ is in the respective weight they place on obstacles to diffusion in contrast to the opportunities for knowledge transfer and the local growth of new-technology-based companies (NTBCs). In the second part of the paper we examine the Irish experience with national innovation policy and cluster development, focusing in particular on growth of indigenous NTBCs in the Galway region. The framework that we have outlined provides some insight into the reasons for the apparent success of government policies designed to promote regional clusters of NTBC firms.