The global network of product-embodied R&D flows: Have national boundaries really faded away?

Abstract

We investigate the extent to which national boundaries still matter in the diffusion of innovation globally. By combining the World Input-Output Dataset with OECD data on Analytical Business Enterprise R&D, we built a longitudinal network of 690 nodes (23 industries in 30 countries) between 2009 and 2013, mapping product-embodied R&D flows between industries within and across countries worldwide. Our complex network analysis examines the characteristics of the network and the relevance of national boundaries. It suggests that, while, over time, the diffusion of product-embodied R&D has extended to include more countries and more industries, the importance of exchanges amongst national industries persists. Industries in specific countries are responsible for essential discontinuities in terms of their centrality in the global network, while industries tend to gather in within national boundaries. It would seem that, despite some cross-country variability, within-country flows are more relevant than international flows in relation to the structural features of the global network nodes. These findings suggest the continued significance of national innovation systems for the development and diffusion of innovation.