Critically discuss the forces that can lead to centralization and decentralization of R&D in multinational enterprises (MNEs).

Centripetal forces (geographical concentration of R&D) • Economies of scale and scope in R&D • Embeddedness in home innovation systems • Coordination costs, complexity and managerial bandwidth Centrifugal forces (geographical dispersion of R&D) • Need to adapt products to local demand conditions • Tap into host innovation systems and access to a portfolio of knowledge pockets around the globe • Growing complexity and interdependence of technologies requires to widen the scope of knowledge search by building linkages to other locations