Strategic Sourcing of R&D: The Determinants of Success

The outsourcing of the R&D function is an emerging practice of corporate firms. In their attempt to reduce the increasing cost of research and technology development, firms are strategically outsourcing the R&D function or repositioning their internal R&D organisation. By doing so, they are able to benefit from other technology sources around the world. So far, there is only limited research on how firms develop their R&D sourcing strategies and how these strategies are implemented. This study aims to identify which determinants contribute to the success of R&D sourcing strategies. The results of our empirical research indicate that a clear vision of how to manage innovation strategically on a corporate level is a determinant of an effective R&D strategy. Moreover, our findings revealed that the R&D sourcing strategy influences a firm's sourcing capabilities. These sourcing capabilities need to be developed to manage the demand as well as the supply of R&D services. The alignment between the demand capabilities and the supply capabilities contributes to the success of R&D sourcing.