The starting point for this paper is a fundamental change currently occurring in the
way innovation is organised in the developed countries: it tended to be centralised
at or near headquarters but is now much more decentralised within the company.
Equally if not more significant, innovation activities that used to be carried out inhouse by innovating firms themselves are carried out by independent suppliers of
knowledge intensive business services, or are transferred to key suppliers. The
question driving this paper is how this ‘organisational decomposition of the
innovation process’ changes the global distribution of innovation of activities. Does
it contribute to their global dispersal to the developing world or does it strengthen
the existing concentration? Since this is uncharted territory the paper seeks
guidance from theory and lays out an agenda for empirical research.
Keywords: innovation; outsourcing; global; knowledge; innovation system; global
value chain.