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Globalization, corporate identity and European technology policy

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The globalization of competition in key high technology sectors has confronted European policy-makers with a dilemma. While the promotion of high technology sectors has become a major priority of European policy in recent years, the growing physical presence of subsidiaries of foreign multinational companies (MNCs) in the European Union (EU) has complicated the issue of what the promotion of 'European high technology industry' means. In practice, a large number of 'foreign' subsidiaries from EFTA and the US gain access to important European technology programmes such as ESPRIT, RACE, BRITE and EUREKA, as well as some national programmes. However, this has not been true for most subsidiaries of Japanese firms, despite the increasingly large presence they have in the European economy. This article asks what can explain this outcome. Two important cases which have brought issues of foreign firm access to the fore of European technology policy-making, IBM and ICL-Fujitsu, are examined. Both European corporate and state preferences need to be understood in order to explain outcomes in these cases. The argument is that a 'technological Fortress Europe' has not been a real policy option because European national champions have been unable to agree, and because certain governments, such as the UK, have perceived an interest in promoting foreign MNCs. European governments and institutions have moved towards a policy based more upon the location of economic activity rather than the ownership of assets. The article also suggests that theorists seeking to understand the consequences of globalization must consider not only how foreign investment, local production and alliances with local partners affect host state and corporate preferences, but also why broader cultural and historical factors also affect outcomes.

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