The Pros & Cons of In-House Versus Outsourced R&D Activity for Assignment

The Pros & Cons of In-House Versus Outsourced R&D Activity for Technology Firms - Assignment Example This research will begin with the statement that there is recent evidence showing that firms no longer depend entirely on in-house R&D to maintain their technological competitiveness. This development, in as much as it has been contended, in portions reflects technological and economical globalization, whereby there is an increasing correspondence in categories of technologies across countries of harmony. Consequently, cross border competition is growing which has resulted in fewer opportunities for profits despite higher costs in retaining technological resources to remain internationally competitive. On the other hand, there is evidence that outsourcing research and development (R&D) activities are on the increase too, for instance in the R&D Magazine January 2001 Issue reports according to a survey of the people reading, a significant portion of the total R&D would be outsourced. The term non – internal is a premeditated one and is proposed to comprise of both outer activit ies (arms-length relationships that include licensing, R&D contracts, outsourcing and other customer supplier relationships) and quasi-external activity like strategic alliances which is said to involve a good number of organizational methods. Non- internal activities are advantageous as they are a ‘reversible’ asset as well as benefits of exploring new areas prompting radical transformation. The funds needed are smaller and the dangers are to a great extent reduced and, in case of the organizational predicament of failure, the limited damage is imposed on primary operations of the firm.