PITA Fiscal Year 2007 Projects

Product and Process Design and Optimization

International factors effecting regional technology innovation: A case study of rare earth technology
Companies striving to increase their individual competitiveness are increasingly pursuing internationalization of activities, including offshoring of production operations, purchasing of raw materials, and collaborating with international partners for new product development. This trend is now widely acknowledged and documented. Through these activities, firms create a set of international networks and global opportunities that are changing the business and knowledge environment within regions and nations. Some of our previous research suggests that these trends can negatively impact innovation in home countries over the long term. Yet, despite their importance, these issues are still very poorly studied. Regional and national policy makers, including those in Western Pennsylvania, must better understand this new economic situation where firms become more dependent on their distributed knowledge networks, rather than relying on centralized operations within a region. Policy making and regional competitiveness are likely to be quite different in this new environment. In this project we will build on our earlier study of the rare earth industry, which has experienced significant levels of internationalization since 1990, to (1) improve our understanding of the impacts of firm-level offshoring activities on regional innovation, (2) identify factors that drive the negative and positive impacts of internationalization on regional innovation capabilities, and (3) develop a new firm-level framework to help shape effective regional policies for maximizing the regional benefits from firm internationalization activities.