The Implications of Globalization on the Innovative Activities of Firms in United Kingdom (Research Paper Sample)

The Implications of Globalization on the Innovative Activities of Firms in United Kingdom
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Abstract
The face of the world economy is shaped by the globalization process. This report points out the implication of globalization on the innovative activities of firms in the United Kingdom. It entails the process of shaping the economy of the United Kingdom in response to innovation and globalization. The report also identifies the factors promoting innovation as well as those impeding the process in the United Kingdom. The UK government has concentrated on assisting firms to lawfully face the challenges of innovation. The reasons behind the investment of firms in the United Kingdom; their effectiveness based on the government policies to leverage the peculiarities of national innovation are also discussed in this report. Generally, the innovation system of the sUnited Kingdom has improved the global business. The UK firms have also implemented the strategies to improve the national innovation system.
Key words: Economy, globalization, innovation, national innovation system and investment.
Table of Contents TOC \o "1-3" \h \z \u Abstract PAGEREF _Toc372606687 \h 21.0 Introduction PAGEREF _Toc372606689 \h 41.1 Factors Promoting Innovation Activities in the United Kingdom PAGEREF _Toc372606690 \h 41.2 Factors Affecting Innovation Process in the United Kingdom PAGEREF _Toc372606691 \h 51.3 Concepts and Theory in Innovation PAGEREF _Toc372606692 \h 51.4 Sources of Innovation in the United Kingdom PAGEREF _Toc372606693 \h 61.5 Strategies for Leveraging the Peculiarities of National Innovation PAGEREF _Toc372606694 \h 71.6 Conclusion PAGEREF _Toc372606695 \h 71.7 Reference List PAGEREF _Toc372606696 \h 8
1.0 Introduction
Innovation is a significant concept in the transformation of knowledge based economy for further reformation and development of the world economy. Generally, the face of universal economy is shaped by the globalization process, which refers to the growth of interdependence of nations due to the rising integration of commerce, people, finance and ideas in one universal marketplace (Altruistic, 2008). Through a critical examination of globalization, the report is going to investigate the implication of the globalization on the innovative activities of firms in the United Kingdom. This will be done by highlighting the factors which promote the innovative activities of businesses in the UK, and those impeding the process. The report will also identify the major firms contributing to the innovation process in the UK. A critical analysis of reasons for investing in innovation will then be presented with possible strategies for leveraging the peculiarities of national innovation.
1 Factors Promoting Innovation Activities in the United Kingdom
Globalization has been considered imperative for the development of the economies for a long time irrespective of the perception people hold towards it. United Kingdom has demonstrated an innovative attitude by opening its markets, particularly the manufacturing sectors. High processes of innovations are rampant due to the knowledge oriented services where business is not covered by the research and development intensive. Besides, the nation has numerous successful industries in the energy sector, which are technologically oriented; promoting invention and innovation in the country. The country has a well established FDI (Foreign Direct Investment) and exports, which has constantly invested innovative activities in the UK economy. This foreign development investment financed the innovative processes of firms and also introduced new innovative techniques to the nation. More importantly, there have been favorable political and legal environments for business activities and innovation. The UK government has formulated and implemented favorable rules and regulations to promote the national innovation system. This has increased the levels of innovation.
1.2 Factors Affecting Innovation Process in the United Kingdom
Though the UK economy has been shaped by the increased openness to trade services, goods, changing migration patterns and capital flows, the innovation processes have been impeded by several factors. As revealed by Tandon (2008), indigenous firms with technological capabilities constantly pose innovative threats to the firms in the UK. Entry of other firms to the UK market provides competitive and vital spur for local firms particularly in regions where a small market has a chance for the aforementioned firms to carry out their activities efficiently. Besides, the export orientation of external affiliates with respect to information externalities has imbedded the innovation systems of UK firms. Altruistic (2008), stated that in the United Kingdom, the foreign owned industries export more compared to local firms. They further posited that foreign affiliate firms sell the products with specific information in the oversea markets; this information is leaked making the domestic firms to also export the goods. However, Bertschek (2009) reached the inconsistent results and stated that the share of export and exporting are rising in the foreign index.
1.3 Concepts and Theory in Innovation
Economic theory shows a connection between improved trade, prosperity and hazards of moving away from protectionism. Generally, globalization has some adverse impacts on the UK firms and employees since it promotes rivalry between foreign and local innovative firms to provide high quality goods and better services. The UK economy has been shaped towards the structural transformations due to the rise in employment opportunities and shares. As asserted by Criscuolo, Haskel and Slaughter (2010), UK has benefited from the export in the universal trade and other sectors due to globalization of innovation. They further noted that other nations have also benefited from the innovation processes but the performance of the UK has remained strong. Global value chain has allowed goods to be sourced from outside, importation of more raw materials and exporting of finished products. Because of innovation, UK has become the largest exporter of services like business, financial, computing and communication of off shored more frequently.
1.4 Sources of Innovation in the United Kingdom
Science and technology are the most common factors for establishing knowledge oriented and competitive economies. The main process of improving the economic growth and productivity is the exploitation of the scientific and technological knowledge that contribute to the firm competitiveness. Technology and R&D (Research and Development) are among the sectors in the UK which have indicated best performance in the global market especially in aerospace and pharmaceutical industries. According to Altruistic (2008), a positive balanced of payment was made by the pharmaceutical sector. These firms on their own realized export of $12 billion during 2005 and created a valued employment (Bertschek, 2009). The aforementioned firms are the major sources of innovation in the UK since they r...