The purpose of this paper is to investigate important impediments to knowledge creation within newly‐established foreign invested R&D centers in China and India.
The paper presents a framework based on knowledge creation theory in order to understand the barriers for transfer and the creation of innovation‐related knowledge within newly‐established foreign invested R&D units in China and India. The paper utilizes extensive empirical data collected from a case study in three Scandinavian multinational companies (MNCs).
Examples of innovations in China and India within Scandinavian MNCs are presented. Impediments to these innovations are identified with regard to socialization and knowledge creation. Particular skills of R&D employees in China and India are relevant for process innovations, e.g. competencies in codification of knowledge.
A synthesis of existing knowledge creation theory is applied to compare R&D knowledge creation skills of Chinese, Indian, and Scandinavian engineers, within MNCs. The new framework explains knowledge creation in China and India, and can be used in other foreign invested R&D units in these countries. Implications for managers working with newly established foreign invested R&D units in emerging markets are offered.
